Loan to income limit change to help homebuyers
14 February 2018 • Products & Services
The Cambridge Building Society has announced it will now accept residential lending applications from borrowers looking to borrow 5 times their income.
This is the latest criteria change to be made by the lender and is designed to support homebuyers with a minimum income of £60k who are purchasing a property up to 80% loan to value and have no unsecured debt except student and car loans. Although valid across all purchase products it will particularly support those wishing to move up the housing ladder.
So called ‘Second Steppers’ are quickly developing distinct needs and require specific help with the difficulties they face. The costs of moving, stamp duty and rising house prices are all putting pressure on families looking for that all important extra space and bigger family home. This change will help this group to navigate their way through this process. The Lloyds Bank Second Steppers report from August 2017 found that a quarter of first time home owners looking to move up the property ladder were finding it harder than buying their first home.
Tracy Simpson, Head of Lending at The Cambridge comments; “We recognise the challenges homebuyers looking to move up the housing ladder are facing and have been looking at ways to help them. Their needs are different to those of first time buyers and their often higher income combined with previous experience of running a home and maintaining a mortgage means we can be more flexible with how much we can lend to them.
The latest UK House Price Index from the Office of National Statistics (UK HPI – December 2017) shows that the average property price in the East of England is currently £290,341 and prices have seen an annual increase of 5.2%, outstripping growth seen in London and the South East.
Tracy continues; “House price growth in our core lending area of the East of England remains strong and family homes in particular command a premium. Our flexible underwriting approach alongside changes such as this one announced today gives intermediaries and their clients another reason to consider us. We’re constantly looking at ways to improve what we can offer and my team are ready to discuss cases and take feedback.”