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    Thank you for keeping us in the loop in these worrying times.
    Just thankful that I am sat on ~60% LTV before all this, hopefully Barclays wont have any issues giving me another deal (circa 6 months till its due)

    Comment


      Hi Sam-Cat
      Thanks for your kind comments.
      At 60% LtV I doubt that you will have too much difficulty in getting another deal even though it is Barclays , but that is for another day.

      Before leaping into a new deal , do explore what alternative facilities might be available to you from other lenders, do this at least three months before the current incentive expires thereby allowing sufficient time to have a new lender process the application and issue the formal offer and for solicitors to get ahead of the deadline.

      Comment


        Nat West have just announced that they have placed a maximum LtV 80% for all new residential house purchase applications.

        Comment


          Metro Bank have placed a maximum LtV of 80% across its residential mortgage range.

          Bank of Ireland have dropped the maximum LtV on itsresidential products to 85%.

          Comment


            To help clarify the changes relating to TMW & Nationwide I am detailing the new LtV’s across both brands.
            Nationwide for Intermediaries
            Max LTV Transaction type
            95% Product Transfer
            95% Purchase - Existing NBS borrowers
            80% Purchase Equity Share - Existing NBS borrowers
            75% New Purchase and Remortgage - new customers
            75% Purchase Equity Share - new customers
            The Mortgage Works
            Max LTV Transaction type
            80% Further Advances
            80% Product Transfer - Buy to Let
            75% Buy to Let - Purchase & Remortgage
            75% Let to Buy
            75% Ltd Co Purchase and Remortgage
            75% Product Transfer - HMO & Ltd Co

            Comment


              Barclays Finally Decide to help BtL Borrowers

              Barclays have now released a note confirming that they will assist BtL borrowers along with residential customers. Here is the link to go to and the form for application is at the end.

              "https://www.barclays.co.uk/coronavirus/mortgages/

              Comment


                Paragon Bank have released a briefing notes which to a greater extent is the most positive of all recent announcements from lenders but the change for the moment on Student Let properties is disappointing.

                What we will still do:
                • Lending up to 75% LTV
                • Lending to portfolio and professional landlords
                • Limited Company mortgages
                • Single self-contained properties up to 4 tenants with a remote valuation
                • Lending on HMOs and Multi-Unit-Blocks. These however will still require a physical valuation, so we will accept the case and underwrite, but book in the survey when possible.
                • Lending within 6 months of purchase
                • Lower ICR calculation for 5 year fixed rates
                • Large Loans up to £2m per property



                What we are temporarily halting:
                • Student Lets
                • Holiday Lets
                • Short Term Finance
                • Loans greater than 75% LTV

                Comment


                  Bluestone Mortgages , a relative new comer to the niche end of lending via the Intermediary channels have this morning withdrawn from accepting any new mortgage applications.

                  Any existing applications which are either in the course of being processed or pending completion will proceed to their conclusion but nothing new will be accepted with immediate effect.

                  Comment


                    Here is an extract from a briefing note on amended lending criteria from Nat West and Nationwide for those affected in employment terms ( Furloughed) and who are applying for a mortgage.

                    Nationwide and NatWest have outlined their affordability criteria for people impacted by the Covid-19 outbreak.

                    NatWest will use the borrower's new revised income for affordability assessments whether their employment income has changed permanently or temporarily, or if they are on the government's Coronavirus Job Retention Scheme.

                    Brokers will need to provide evidence of their client's new income and a letter from their employer if they have been furloughed.

                    If a borrower's basic salary is reducing and not being replaced by the Government scheme, the new revised income will be used for assessment and borrowers will need to provide a letter from their employer confirming what their new income will be if their most recent payslip does not confirm the revised salary.

                    Where it is certain or highly likely that one or more elements of the customer’s income will stop or reduce - including overtime, bonuses or commission - then this cannot be used for an affordability assessment.

                    Nationwide confirmed that it will accept 80% of income if a borrower has been furloughed, but will no longer accept bonuses, overtime or commission on new applications.

                    Nationwide is also unable to accept any additional income, such as shift work, and will only accept zero hour contract income from key workers such as nurses, care home workers, supermarket workers and delivery drivers. Zero hour workers will need to have been employed on this basis for at least 12 months, but Nationwide has removed the ‘same employer’ requirement.

                    If using the lower income means a borrower fails affordability, they can choose to reduce the loan amount, extend their term (subject to criteria) or pause their application.

                    Comment


                      HSBC have announced a system of restricting the daily acceptance of new mortgage applications and for the present have stopped the acceptance of maximum LtV applications ( 95%)

                      Comment


                        The market continues to change and not for the better judging from the following lender announcements.

                        Lenders who have paused accepting new mortgage applications:
                        • Clydesdale Bank are not currently accepting new Purchase applications on either Residential or Buy to Let
                        • Virgin Money are not currently accepting new Purchase applications on either Residential or Buy to Let

                        Lenders who have put in place occupation, status or property restrictions:
                        • Cambridge Building Society are currently not accepting applications on Buy to Let products where there is any element of Top Slicing. They are also not currently accepting Let to Buy applications
                        • West Brom for Intermediaries have today announced that as a temporary measure, they will not be accepting any non-guaranteed forms of income including (but not restricted to) overtime, bonus and commission. Additionally, they will not accept applicants who have been furloughed by their employers nor will they accept income from self-employed applicants who have lost trading profit due to COVID-19 and are receiving support under the SEISS (Self Employed Income Support Scheme)

                        LTV Restrictions as of 6th April

                        Residential
                        • Clydesdale Bank have temporarily restricted their LTV on Remortgages to 60%
                        • Kensington have restricted their LTV for all Residential applications to 70%
                        • Virgin Money have temporarily restricted their LTV on Remortgages to 60%
                        Buy to Let
                        • Clydesdale Bank have temporarily restricted their LTV on Remortgages to 55%
                        • Virgin Money have temporarily restricted their LTV on Remortgages to 55%

                        Comment


                          Here are the following changes announced today , in the main they relate to residential home loans, the criteria indicated by HSBC for those persons furloughed is being replicated by some other lenders so if remortgaging or purchasing , I would advocate speaking with your broker or trying to called your lender but be prepared for a reasonably long period , most staffworking are operating from home so quick responses may not always be possible.

                          Lenders who have paused accepting new mortgage applications:
                          • None

                          Lenders who have put in place occupation, status or property restrictions:
                          • Accord Mortgages have tightened their criteria on Residential lending with regards to how they underwrite adverse credit. The following will now apply:
                            • Missed Payments
                              • On secured loans, they will no longer accept missed payments on a single account within the last 24 months
                              • On unsecured credit, they will no longer accept consecutive missed payments within the last 24 months. This includes mobile phones, fixed term or mail order payments
                            • Defaults
                              • There must be no new defaults registered in the last 6 years
                            • CCJ’s
                              • All CCJ’s must be satisfied
                              • There must be no new CCJ’s in the last 6 years
                            • The following changes are applicable from Wednesday 8th April:
                            • Debt Consolidation
                              • The amount of debt that a customer can consolidate when Remortgaging will be capped at either £50,000 or 10 debts
                              • These criteria changes will be applied to AIP’s
                          • Barclays have announced that they are not currently accepting new Purchase applications for properties in Scotland or in Northern Ireland. They have also said that they will be capping maximum loan sizes on all products at £2million from Wednesday 8th April
                          • HSBC have made some changes to their Income Assessment for Residential Mortgages. With immediate effect, brokers need to ask applicants if their income is impacted by Covid-19 and based on the customer’s response, process the application in line with HSBC’s updated income assessment policy.
                            For pipeline applications (received before 7th April but have not yet reached offer stage), HSBC will proceed as stated unless the broker informs them of a change to the applicant’s financial situation – in which case the new application guidance will apply.
                            For post-offer applications, HSBC will proceed as stated unless the broker informs them of a change to the applicant’s financial situation in which case the new application guidance will apply:
                            • Employed income
                              • Where an applicant has been furloughed by their employer, HSBC will assess affordability based on 80 per cent of basic income up to a maximum of £30,000 per year gross. Brokers are asked to input the furloughed income in the application.
                              • Where top-up income is being paid by the employer, the affordability will be based on the level of income being received. Brokers are asked to input the actual income (i.e. including top-up salary) in the application.
                              • Evidence will be required to validate both furloughed and top-up income and all applications where furloughed income or top-up income is being used will be reviewed by an underwriter
                            • Variable Income
                              • Bonus, commission and overtime will no longer be an eligible source of income with the exception of NHS employees where variable pay/overtime will be acceptable based on pre-March 2020 levels.
                              • Brokers are asked not to complete this section of the application, unless the applicant is an NHS employee
                            • Zero-hours income
                              • Zero-hours income will be limited to certain professions and where the income has been received for a minimum of 12 months. Income can only be included in joint applications where the customer is not the primary earner and works in one of the following fields: NHS bank nurses and locums; non-NHS bank nurses; care home workers; supermarket workers (including delivery drivers).
                              • Brokers are asked not to complete this section of the application, unless the customer falls into one of the above professions
                            • Self-employed income
                              • For sole traders, partnerships and limited liability partnerships with less than 200 partners, the latest three months’ worth of business bank statements are required for all customers.
                                In line with the current process, brokers should input 100 per cent net profit amounts for the current and previous accounting years in the application. All self-employed applications will be reviewed by an underwriter
                              • In line with the current process, brokers should input 100 per cent net profit amounts for the current and previous accounting years in the application.
                          • Leek United Building Society have reduced their maximum loan amount to £500,000 on both Residential and Buy to Let. They have also announced that from today, they are unable to accept any applications on New Build properties or on Flats regardless of the LTV
                          • Metro Bank have made the following changes to their affordability assessments:
                            • They are still accepting applications from the self-employed, however self-employed applicants will now be required to demonstrate the “sustainability and profit” of the business
                            • For applicants with bonus, commission or overtime income, they will average this over the last 2 years and then take 50% of this for the affordability assessment. The last 2 years P60’s will be required as evidence earnings
                            • Investment income will only be accepted where the portfolio is valued at a minimum of £1million
                          • The Mortgage Works (TMW) are striving to do as many AVM’s or Desktop Valuations as they can, but for some properties this isn’t possible. Cases will be put on hold for these kinds of properties which include:
                            • House of Multiple Occupation
                            • Certain blocks of flats - for example where an EWS1 fire safety report is needed
                            • Homebuyers Reports and Full Building Surveys - If your client has requested a Homebuyers Report or Full Building Survey, they’ll be unable to complete a valuation and the case will be placed on hold. If, after discussion with your client, you want to change to a mortgage valuation, you can email tmw-updates@themortgageworks.co.uk to request this, with ‘Valuation’ as the subject line. After changing, they can’t guarantee the property will be suitable for a Desktop Valuation and if your client decides to cancel the Homebuyer Report or Full Building Survey, They will be unable to reinstate it at a later date
                            • New Build – They’ll only consider Desktop Valuations when the development has been visited in the past 12 weeks and the UK Finance Disclosure Form is available. You can email them the form quoting the case reference in the subject line to Panel.Maintenance@nationwide.co.uk. If this isn’t available or the site hasn’t been visited in the past 12 weeks, they must conduct a physical valuation

                          LTV Restrictions as of 7th April

                          Residential
                          • Accord Mortgages have announced that from Wednesday 8th April, they will be temporarily reducing their maximum LTV for Debt Consolidation cases to 80%
                          • Leek United Building Society has capped their maximum LTV to 80%
                          • NatWest have asked us to clarify that their recent product changes limited our new business LTV to 80%. However, any pipeline case that was in before these changes they will still look to proceed on a Desktop valuation where possible (excluded cases are BTL, New Build, Flats, +3m properties which all require physical valuations)
                          Buy to Let
                          • The Mortgage Lender have reduced their LTV to 80%
                          • Leek United Building Society has capped their maximum LTV to 65%

                          Comment


                            Updated correction re The Mortgage Lender
                            This lender has announced the withdrawal of the 80% LtV across its mortgage range limiting to 75%, additionally they have announced an increase of 0.3% across its entire mortgage product range. Before anyone questions the rationale of rates increasing when BoE rates are at their lowest might i reconfirm what I have written previously, lenders like TML are entirely dependent on institutional funding and the rate increase reflects the current risk assessment of lending.
                            Speaking with certain lenders over the last 48 hours it is clear that the appetite for lending is unlikely to return to its previous levels for some time , much as what happened in 2008 after the Credit Crunch. One lender ( whom I will respect their confidentiality) has expressed reservations over the viability of HMO properties where evidence is beginning to surface of Landlords experiencing tenants ( Not student tenants) doing runners, whilst this may not be a common feature throughout the country it is fair to say that such actions would have a significant adverse effect on the ability to meet mortgage payments even accepting the three month mortgage payment holiday. I will be posting anything further which might have an impact on both landlords raising mortgages and lenders willing to accommodate suitable levels of funding.
                            No lender wants to take adverse actions but in the current uncertain times which we all face , no one wants to be reporting the consequence of lending without taking all prudent checks.

                            Comment


                              The following is an extract of a brokers briefing note from Coventry / Godiva relating primarily to Remortgage but with a note on making an application where presently a payment holiday is being taken on a current property.

                              Changes to capital-raising remortgages
                              • For owner-occupied remortgage applications and for existing customers who want to raise capital from their property, we’ll apply a maximum LTV of 65%
                              • For Buy to let remortgages, we’ll only accept pound for pound applications. We’ll consider further advances on BTL properties but only for essential repairs to the mortgaged property.
                              If your client is taking a mortgage payment holiday with another lender because of Coronavirus and wants to take a new mortgage with us

                              We’ll only consider a new mortgage when the holiday period has ended, their payments have started again and they’ve made a minimum of three monthly mortgage payments.

                              Comment


                                I participated in a mortgage related webinar this afternoon , the key participants were the MD and Head of Sales of Foundation Home Loans and arranged by the editor of Mortgage Introducer, for anyone with either a Residential Mortgage or Buy to Let loan which was originated through lenders like FHL where the funding is entirely funded by Institutional investment I would encourage forum readers to key in the following link and listen/view what was being discussed and the questions raised with them: I raised at the beginning of the Q&A given my genuine concerns as to what may occur when things get back to relatively normal terms.https://www.youtube.com/watch?v=i47dIr3M_Pc

                                Having spent a fair amount of time speaking with lenders with whom I have developed good relationships with over a number of years, it is clear that there is a genuine nervousness within the lending market and things might get increasingly more difficult if the market takes several months to overcome the issues arising from Coronavirus 19 and the real probability that the number of lenders outside of the conventional banks and building societies might be much fewer than at present and those who have stopped lending because of funding and associated issues might never return.

                                Comment

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