- Other criteria updates include changes around capital raising and simultaneous completion.
To support first time buyers, Suffolk Building Society has announced that from today it will lend up to 5.49 times applicants’ income for those with a rental track record. This is the first time the Society has taken rental history into account to support affordability.
Applicants will need to demonstrate 12 months of paying a rental amount that is within 10% of their prospective new monthly mortgage payments. For example, if a couple pays £1,500 rent per month, they could be considered for a monthly mortgage payment up to £1,650.
The same enhanced multiplier of 5.49 also applies on applications where at least one applicant earns over £75,000. Previously this threshold was set at £100,000.
Suffolk Building Society’s Head of Intermediaries, Charlotte Grimshaw said: “We’re really excited to take rental history into account for the first time, as well as join a very small group of lenders who are offering meaningful support to first time buyers.
“Many renters have the means to meet sizeable monthly mortgage repayments – often paying more than they would on a mortgage, whilst renting. However, a multitude of factors, such as rising house prices and higher rents has meant customers can often afford to rent or save for a deposit, but rarely both.
“The current situation has put homeownership out of reach for many. The enhanced income multiples, when combined with other affordability-boosting tools, such as 5 year fixed rates, or longer terms to reduce monthly payments, should help some of our renters achieve their dream of buying a home. It feels great to be able to support brokers and their customers with a more generous loan to income ratio.”
The change comes as part of wider improvements to the Society’s criteria. The following criteria changes are also effective from today:
- The Society will allow capital raising to purchase a property without simultaneous completion, up to a maximum of 80% LTV. This may be useful in a variety of scenarios, including allowing older borrowers to purchase a property in preparation for retirement, moving in once they are ready, and then subsequently selling their previous home or when purchasing an investment property (BTL).
- The Society will allow capital raising to purchase an onward property in a limited company.
- The Society will allow applicants to purchase a property, where the deposit has come from the applicant’s limited company (SPV).
Charlotte Grimshaw continued: “We’re always reviewing our criteria and taking broker feedback on board to see what changes we could make to improve our overall proposition. Our focus is always on fulfilling the needs of those customers we’re trying to reach.
“As our regular brokers know, we’re able to assist with a wide range of cases. We understand that not every customer or application fits neatly into a box, so we consider each one individually and with understanding.”
