Mortgage Lending Updates during Coronavirus

A new week and a whole host of criteria changes from mortgage lenders which have been forced upon us due to the coronavirus!


I am receiving email updates on an hourly basis from mortgage lenders and I will continue to pass on this information so that you are always kept informed and up to date.


Mortgage Lenders who have paused accepting new mortgage applications:

• Foundation Home Loans are not accepting new business on any product ranges at this time to allow them to focus on supporting existing customers with payment holidays. They have taken the decision to put all pre-valuation applications on hold until further notice
• Furness Building Society are not currently accepting new applications on Buy To Let
• Hodge Bank are not currently accepting new Purchase applications and are temporarily withdrawing their Portfolio Buy to Let mortgage
• InterBay Commercial are no longer accepting new applications on any product
• Kensington are not currently accepting any new applications on:
• New Build (including Help to Buy)
• Later Life
• HMO and MUB
• Residential and Buy to Let applications are still being accepted subject to the LTVs and property values detailed further on this page. There are also restricted maximum loans
• Kent Reliance are not currently accepting any new applications across any of their product ranges as they divert resource to existing borrower support
• Masthaven Bank are not currently accepting applications for:
• Second Charge Buy to Lets
• Specialist Property
• Specialist Landlord
• Tenant First Charge Buy to Let
• The Mortgage Works (TMW) are temporarily pausing all new business across their 80% LTV mortgages (excluding further advances) and HMO range. All other products (including switchers) remain unchanged.

Lenders who have put in place occupation or status restrictions:

• Accord Mortgages due to social distancing and the need for physical valuations, cannot for the time being lend on:
• New Build
• Flats
• Buy to Let Purchases
• Properties in Northern Ireland
• Non-standard methods of construction
• Properties valued at more than £1million
• Aldermore have put on hold cases for the following (because a physical valuation is needed):
• Properties adjacent to commercial premises
• Properties in a poor/derelict condition
• New Build properties
• HMO/MUF properties
• Properties with more than 2.5 acres
• Leasehold properties with less than 100 years remaining
• Portfolio applications with more than 5 properties in the same block or postcode area
• Bluestone Mortgages have made a number of changes as follows:
• Maximum loan of £500,000 on all products
• No longer accept overtime, commission and bonuses in affordability calculations unless the applicant is a key worker as defined by HM Government.
• Accept applicants employed in the leisure, hospitality & retail industries
• Capped the loan-to-income ration at 4.5x for all residential loans
• No longer accept Buy to Let applications from First Time Buyers
• Only accept Investment Buy to Let on a Clear product basis
• Only accept New Build constructions on Help to Buy applications
• Minimum remaining lease terms are now for Residential to 40 years and 50 years for Buy to Let
• Hodge Bank are only accepting like-for-like remortgage applications
• Kensington reduced the maximum property value to £1m, across both Residential and Buy to Let
• Masthaven Bank changes include:
• No longer lend to those on Zero Hours Contracts unless they are defined as “Key Workers” by the HM Government
• Do not now allow the use of Projected Income for Self-Employed applicants
• Restrict Employed applicant’s affordability to basic annual salary
• Now require contractors to have a minimum of 3 months remaining on their current contract or evidence of a renewal for at least 3 months

LTV (Loan to Value (Amount of borrowing vs property value)) Restrictions as of 30th March

Residential

• Bluestone Mortgages have capped at 75% LTV all Clear, AAA & AA products (excluding product fees which can be added)
• Buckinghamshire Building Society have reduced their maximum LTV to 70%
• Hodge Bank have reduced their maximum LTV to 60%
• Kensington have reduced their maximum LTV to 70% (they are aware that some sourcing systems currently are still showing 75% LTV products but they are only considering loans of 70% LTV or below at this time)
• Masthaven Bank have reduced their maximum LTV to 75%
• Nationwide Building Society have temporarily paused lending over 75% LTV on new customer Purchases, Remortgages and First Time Buyer Purchases

Buy to Let

• Buckinghamshire Building Society have reduced their maximum LTV to 70%
• Fleet Mortgages have capped all products at 60% LTV
• Hodge Bank have reduced their maximum LTV to 70%
• Kensington have reduced their maximum LTV to 70% (they are aware that some sourcing systems currently are still showing 75% LTV products but they are only considering loans of 70% LTV or below at this time)

In some cases, there have been additional restrictions placed on both loan sizes and property values to assist with allowing applications to proceed using AVM’s (Automated Valuation Model, a valuation automatically generated without a human writing a report).


From tomorrow, Tuesday 31st March, Halifax will re-introduce 80% LTV products. These may take a little time to complete due to the amount of business this will bring them.


From Monday 30th March at 6pm for Residential and 8pm for Buy to Let, Accord Mortgages will now accept AVM’s in place of a physical valuation on:

• Residential purchases, where the maximum loan-to-value (LTV) is 75% or below
• Residential re-mortgages, where the maximum LTV is 85% or below
• Buy to Let remortgages, where the maximum LTV is 65% or below

Hodge Bank will be extending mortgage offers for up to 3 months (if contracts have been exchanged) to enable borrowers to delay their move. They will also be extending remote valuations up to 60% LTV across all products, with a maximum valuation of £1m in London and the M25, and £750k elsewhere.


Following a recent temporary withdrawal from new purchase business, Skipton Building Society will be reinstating Purchase business for both Residential and Buy To Let lending up to 75% LTV. This will include both Remortgage and Purchase business, with new products launching imminently. The offering will for now exclude New Build, Shared Ownership, properties over £1million in value and Flats with cladding concerns. Where possible, Skipton will now try and use AVM’s and Desktop Valuations.


It has been an incredible day with plenty of changes from the mortgage lenders and it is refreshing to see the mortgage lenders coming up with solutions as a work around as surveyors are not able to visit properties due to the social distancing rules set out by the government.


Saffron Building Society announced today that they have temporarily suspended their direct to customer offerings. Currently their mortgages will only be offered via brokers. Clients will be able to go direct in the near future, they explained that this is not connected to the coronavirus situation but could be helpful to you in gaining new business at this time.


The Tipton Building Society have reduced their LTI (Loan to Income) cap on mortgages above 90% LTV. This is now 3.49 x joint applicant or 2.74 x single applicant. Again, they have expressed this is not due to the coronavirus and this is common amongst building societies when they reach their lending limits.


As the market is changing almost by the second, I haven’t been able to include every change seen today. Therefore, please contact me. Why not book 15 minutes with me? It won’t cost you!