Tipton and Suffolk update criteria; West One adds discount trackers – round-up
Tipton and Coseley Building Society has updated its criteria for expat borrowers to consider income from overseas self-employment, where the applicant runs a business outside the UK.
This change will be subject to verification and the mutual’s standard lending assessments.
Applicants can reside in any Financial Action Task Force (FATF) approved country, and they must demonstrate a minimum of two years’ continuous trading history. They must also provide satisfactory evidence of income and business performance for the latest two years.
The Tipton said it made the change in response to the growing number of expats working on a self-employed basis seeking a residential base in the UK.
Jason Newsway, chief commercial officer at The Tipton, said: “We continue to build a strong reputation in the expat lending market by offering competitive residential and buy to let product ranges and consistently high levels of service.
“We listen closely to feedback received from our broker partners and use it to enhance our overall proposition.
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“This latest expansion to our lending criteria means greater flexibility for brokers and more opportunities to place cases for self-employed clients living overseas.”
Suffolk BS updates expat and landlord affordability criteria
Suffolk Building Society has enhanced its affordability criteria to introduce top slicing for UK and expat buy-to-let mortgages.
It has also updated how it assesses affordability for expat residential applicants living in seven tax-free countries.
From 28 October, the mutual will set its interest coverage ratio (ICR) at 125% for basic taxpayers and 145% for higher and additional rate taxpayers. An immediate change has been made to introduce top slicing when assessing affordability across two-year UK and expat BTL products. Where the income falls short, Suffolk Building Society will use some of the borrower’s personal disposable income as a top-up, where the rental income meets a minimum ICR of 125% at product rate.
Up to two applicants will be allowed with a minimum income of £40,000 for one applicant, or a combined income of £65,000. Top slicing is not available on holiday let mortgages.
Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “The buy-to-let market has evolved significantly, and many landlords now have diverse income streams in addition to rental.
“This provides greater flexibility for landlords who may otherwise be constrained by rental stress testing alone, whilst maintaining our responsible approach to lending. Ultimately, it’s about giving brokers more options and helping landlords continue to invest in the private rented sector at a time when demand for rental homes remains strong.”
The mutual has also updated how it assesses affordability for expat residential cases involving UK nationals living in tax-free countries.
This was previously calculated on their status as UK taxpayers, but has been changed to take into account the fact that no tax is deducted in some countries or territories, enabling them to borrow more.
Grimshaw added: “By taking into account the tax arrangements of individual countries when we’re assessing affordability, we will be able to make a significant difference to expats’ borrowing capacity. Many workers move to regions such as the UAE specifically because of the opportunity to earn tax-free, so it’s important that this is reflected in our affordability assessments.
“Expat remains an important lending area for us, and we’re keen to give brokers more options when supporting UK nationals living abroad.”
West One launches discounted trackers and cuts rates
West One has lowered residential mortgage rates by up to 0.41% and released two-year discount tracker mortgages to its core range.
The discounted tracker rates start from 5.6%, 1.85% above the base rate and early repayment charges only apply during the first year.
Its core and LTI Boost two-year fixed rates now start from 5.64%, following cuts of up to 0.35%, and five-year fixes now start from 6.03% following a headline rate reduction.
Its Fee Assist range now starts from 6.99% for a two-year fix and 6.53% for a five-year fix.
West One’s Extra and Right to Buy deals have been reduced by up to 0.24% and shared ownership rates by as much as 0.15%.
Paul Huxter, head of intermediary sales and distribution at West One, said: “In recent months, we’ve seen growing interest in tracker products from our broker partners, particularly while wider market rates remain unsettled. Our discounted two-year trackers give borrowers who are waiting strategically for the market to stabilise greater flexibility.”
