"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"
- Charlotte Grimshaw - Suffolk Building Society
Suffolk Building Society has introduced a higher income multiple of 5.49 times for applicants with a proven rental history, marking the first time it has factored rent payments into affordability assessments.
First-time buyers who can demonstrate 12 months of paying rent within 10% of their anticipated monthly mortgage payments will now be eligible for the higher limit. For example, a couple currently paying £1,500 in rent per month could be considered for mortgage payments of up to £1,650.
The same enhanced multiplier also applies to cases where at least one applicant earns more than £75,000 a year, down from the previous £100,000 threshold.
“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,” said Charlotte Grimshaw, head of intermediaries at Suffolk Building Society (pictured). “Many renters have the means to meet sizeable monthly mortgage repayment, often paying more than they would on a mortgage, whilst renting. However, a multitude of factors, such as rising house prices and higher rents, have 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 announcement forms part of a wider set of criteria changes. Effective immediately:
Capital raising is permitted to purchase a property without simultaneous completion, up to a maximum of 80% LTV.
Capital raising can be used to purchase an onward property in a limited company.
Deposits for a property purchase can come from the applicant’s limited company (SPV).
According to the Society, the removal of the simultaneous completion requirement could benefit a range of scenarios, including enabling older borrowers to buy a property ahead of retirement, moving in when ready, and selling their previous home later. It could also be applied to the purchase of an investment property.
“We’re always reviewing our criteria and taking broker feedback on board to see what changes we could make to improve our overall proposition,” Grimshaw continued. “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.”
