The volatility of the times we are currently living in makes it difficult to make any concrete predictions; nobody really knows what the autumn or winter months may bring, perhaps a return to life in lockdown, complete with homemade haircuts and bedraggled beards.
More lenders on and off the High Street are edging towards the relaxation or removal of many of their Covid related restrictions; at least in terms of marked changes to their borrowing criteria, enabling more applicants to qualify for their products than at any time over the past 18 months.
For example Buckinghamshire Building Society made a huge adjustment to its minimum income requirement for BTL commercial mortgages at the end of June, having previously demanded a minimum income from applicants of £35,000, this was reduced drastically to 25,000.
Around the same time, Chorley Building Society introduced its first 95% LTV product with just a 5% deposit requirement. Elsewhere, Virgin Money and The Mortgage Works both increased the maximum LTVs on their own BTL Mortgage Products.
The momentum carried through into July, when Bank of Ireland introduced its new ‘green’ BTL mortgages and YBS Commercial Mortgages loosened its lending criteria. Over at Kensington, restrictions were removed that had previously accounted many freelancers out of the running for a mortgage.
Later that month, Halifax rolled out an increase to its maximum loan size across all first-time buyer and home mover products with an LTV of 85% to 95%. It is now possible to borrow up to £750,000 with a low deposit requirement.
This was followed shortly by an announcement at Aldermore that restrictions would be relaxed on self-employed mortgage applicants for commercial purchases or BTL home investments. As prior to the pandemic, it would subsequently only be necessary for the applicant in question to have been operating as a sole-trader for just one year to qualify.
Does this mean that this positive momentum and collective liberal attitude is set to continue?
The answer as with most things right now, remains uncertain.
Banks’ lending decisions and general qualification criteria are based on a multitude of factors. Examples of which include the wider employment situation in the UK, Bank of England base rates, consumer spending and the immediate/long-term financial outlook. As it is currently impossible to predict what the next few months will bring, there are no certainties with regard to potential lending restrictions.
Anyone looking to apply for any mortgage or commercial product of any kind right now is strongly advised to consult with an independent broker like UK Property Finance; all major borrowing decisions should be carefully considered with emphasis on flexibility and guaranteed affordability.
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