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Private Finance, the independent mortgage broker, has said that it is now able to accommodate borrowers who have been unable to gain access to finance since the introduction of MMR (Mortgage Market Review) by working with a number of smaller lenders who have been able to adapt their products and lending criteria to suit applicants with less conventional circumstances.
Since the introduction of the regulator’s new affordability rules as part of the Mortgage Market Review, almost half of those who planned to buy a property have failed, according to Experian. Private Finance has said that many of these would-be buyers are ‘mortgage misfits’; borrowers with unique circumstances in need of bespoke products and specialist financial guidance.
These borrowers are typically retired or near retirement, self-employed, contract workers, expatriates or first time buyers looking for higher loan to value mortgages. As a result of this innovative, market-driven response from both lenders and brokers, such applicants are now increasingly well catered for by new products from lenders such as Ipswich Building Society and Market Harborough Building Society, the broker has said.
Simon Checkley, Managing Director of Private Finance said;
“The unintended consequences of Mortgage Market Review have left thousands of borrowers trapped in their homes and unable to move or paying higher Standard Variable Rates, when they could be moving home or accessing some exceptional deals by remortgaging whilst we remain in a low interest rate environment. The good news is that we are in a much better position to help, as a number of small regional building societies have now tailored their criteria to accommodate specific groups such as the retired, expatriates and self-employed.”
“We applaud the work of these lenders who have responded positively to market conditions, supporting brokers in their mission to cater for these niche areas of the market. We hope that with increasing understanding of the impact of current guidelines regulators might further support more lenders who will be able to follow suit.”
Louise Bunce, Head of Sales and Marketing at Market Harborough Building Society said:
“The Mortgage Market Review has instigated our move towards bespoke and specialist lending. In particular, we have considerably enhanced our lending and services to expatriate residential applicants who are often not catered for by the majority of High Street lenders. We have developed our expatriate offering to meet the needs of the market, having identified a growing trend in people becoming increasingly mobile; often working overseas, or being based overseas and planning to return to a permanent UK home in the future.”
Paul Winter, CEO of Ipswich Building Society said:
“Ipswich Building Society is standing up for mortgage misfits which include the self-employed, older borrowers, self-builders, first-time buyers, and those who have experienced a lifestyle change, all of which are often overlooked by lenders who insist on machine-only application processes. In order to ensure these applicants are not unnecessarily excluded from the market, we are advocating a more inclusive approach to mortgage lending in general which means those approaching the end of a deal are not forced to continue on a more expensive SVR rate and denied choice or entry to an otherwise competitive market.”