Weekly Overview for 12th December 2020

A quick look at the highlights of the week affecting the adverse credit specialist lending. Bad news for RTB and HTB shared ownership. However, good news coming from the Bank of England with acknowledgement that the affordability rules as set by them may well be outdated.

Bank of England to review their mortgage affordability test

Back in 2014 the Bank of England introduced a tougher mortgage affordability test with the aim of reducing the prospect that borrowers would found themselves in a position where they can no longer service their mortgage payments because interest rates rise by 3%. The assumption that interest rates would jump by 3% gets more and more remote as base rates here and around the globe remain stubbornly low leading to lender reversion rates beiong far lowere now than they have been in the past.

The Bank have said they will review the underlying calibration of their mortgage affordability test and report its findings next year.

Kensington Mortgages withdraws its Right to Buy products for the forseeable future.

This leaves ever fewer options for applicants with a history of adverse credit wanting to exercise their right to purchase their home from their local authority.

The lender has no firm date when they will offer lending on Right to Buy purchases again but the withdrawal has been put down the shear volume of business they are currently trying to work through.

Kent Reliance withdrawing 100% and 95% mortgages on HTB shared ownership

This was a great product for applicants with historic adverse credit wanting to purchase a property on a shared ownership Help to Buy (HTB) scheme with little or no deposit. Like Kensington Mortgages above, the lender has no firm date when they will offer lending on HTB shared ownership again at these loan to values but the withdrawal has been put down the shear volume of business they are currently trying to work through.

What now?

Simple, get in touch. Before you do you may want to enquire about your credit file as your mortgage adviser will more than likely ask you for it as it will form part of his research in finding your best mortgage choice. As with all mortgages there is no guarantee you will be accepted for mortgage following application but going through Lawrie Mortgages and letting us help you make the best mortgage choice will greatly increase your chances. Any successful mortgage application will rely on your own personal circumstances which will include your income and affordability as assessed by the respective lender underwriting.

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