Daily Criteria Update
Over the last few weeks we’ve seen Mondays get us off to a quiet start…..but not this week!
We have news of 90% LTV deals on Residential, more details about the assessment of furloughed workers and news of physical valuations outside of England. Basically…it’s all going on tonight!
Let’s get going with your first daily criteria update of the new week……
Lenders who have paused accepting new mortgage applications:
Lenders who have reinstated lending:
Changes to income and affordability restrictions:
- TSB are making some temporary changes to their affordability assessment of furloughed workers from Tuesday 16th June. They have said that pipeline cases that have been submitted before Tuesday 16th June will be manually underwritten and assessed in line with current criteria. The changes are as follows:
- All applicants who have been furloughed must supply a letter from their employer confirming its intention to continue to offer them employment
- The letter must be dated within four weeks of the full mortgage application and specify the date at which the applicant is due to return to work
- It must also state whether the applicant will return as a full-time or part-time employee
- The letter must confirm the employer’s financial responsibility, under the Government Coronavirus Job Retention Scheme, to contribute towards national insurance, pension contributions and the applicant’s salary if returning to work after July 31st
- A coronavirus income impact form must be completed alongside the application and the salary entered must reflect the borrower’s earnings at the point of submission
- For applicants who are employed but have not been furloughed, applications must reflect any salary cuts that have been made as a result of the Covid crisis
Changes to occupation restrictions:
Physical Valuation Updates and associated criteria
- Bank of Ireland for Intermediaries have announced that as of today, their valuers will carry out physical valuations in Northern Ireland as long as it’s safe for them and the occupier. If a physical valuation isn’t possible, a desktop valuation can still be done up to 85% LTV so as not to delay the case. Desktop valuations remain the only option in Wales and Scotland currently
Property Restrictions Imposed
Property Restrictions Lifted
Buy to Let
- Monmouthshire Building Society have re-entered the market with a 90% LTV product for both Purchase and Remortgage and have both 2 and 5 Year Fixed Rate product options available. They have told us to ask you to ensure that applications are fully packaged and that these products could be withdrawn at short notice depending on their popularity. Also bear in mind that physical valuations are still only available in England and desktop valuations are still restricted by LTV in Wales
- Buckinghamshire Building Society have announced today that they will now accept Purchase and Remortgage applications on their Prime Range (including First Time Buyers) at 80% LTV with a maximum loan of up to £1m
Buy to Let
- Buckinghamshire Building Society have also increased the LTV on their Buy to Let range to 70% with a max loan size £750,000
- Coventry for Intermediaries will have a 90% LTV Product Transfer product available from 8am on Tuesday 16th June. This will be a 5 Year Fixed Rate at 2.90% with £0 product fee and will have ERC’s
Assessment of Payment Holidays for Future Borrowing
- In some cases, there have been additional restrictions placed on things like loan sizes and property values to enable the lender to do Desktop Valuations. You’ll find these have been amended by the lenders in the relevant criteria categories on Knowledge Bank. There are also the “lender announcements” under the lender’s logos in the search results to alert you to anything you need to be aware of before placing the case. To see these features and much more,
log in to Knowledge Bank here
Castle Trust been awarded a full banking licence without restrictions. Back in March, they had already been authorised ‘with restriction’ around savings but the work on this has now been completed and their customers voted to convert their investments into savings allowing the ‘without restrictions’ full banking licence to be granted. Martin Bischoff, their CEO, has said that they will be revealing details of their enhanced property lending position shortly which will focus on Buy to Let and High Net Worth offerings.
Our Lender Relationship Manager, Matthew Corker, comments:
“So kicking off from me today with a heads up on some product changes from Barclays to watch out for tomorrow (Tuesday 16th June) on Residential, Buy to Let and Reward. They’re introducing a reduced rate and new 60% and 75% LTV 2 Year Fixed rates, available for loans up to £5m. They’re also introducing new Help to Buy products to complement their existing offering. Finally, they’re launching a new Buy to Let Portfolio Landlord 75% LTV 2 Year Fixed product. Bear in mind that Barclays will only accept applications from Portfolio Landlords on their portfolio landlord products and that as per the PRA definition, Portfolio Landlords are those with four mortgaged rental properties or more across all lenders.
Some interesting criteria announced by TSB today about how they intend to deal with furloughed workers going forwards. We did say last week that we should expect to see more lenders showing their hand on this subject and we saw the first last week so we’re getting a feel for how this is going to look. When the furlough scheme was announced it was straight forward, but now there is an end date and employer contributions are in play from 1st August lenders will be reconsidering how they are going to assess these applicants. I dare say it’s causing a headache or two for the policy makers!
Finally, I’ve been speaking with Buckinghamshire Building Society today who still have a 100% LTV product for First Time Buyers. Their Family Assist fixed rate is available on property purchases via security taken on the applicants parents home so that the combined LTVs are 80% across both properties.”