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Recent world events have accelerated changes to our financial habits and the way we live, earn, and work. Consumers financial habits are continuing to change, and with these changes come new challenges for lenders to navigate.
The mortgage market, then and now
In 1952, there were just 1.65 million borrowers, but in March 2022 the amount of owner-occupier homes in the UK was the highest it’s been since 2002, at 16.1 million. Before the financial crash of 2008, lenders approved loans which didn’t require verification to confirm the borrower’s affordability. Now, things are vastly different, with evidence or proof of regular income and assets required.
Whilst the market adjusted post-financial crisis, the needs of customers diversified rapidly. Previously ‘unusual’ cases - the main source of income paid in Euros, for example – started to become commonplace.
Today, things have evolved even further, particularly in light of the COVID-19 pandemic. The lockdowns of recent years have supercharged the ‘side hustle’ culture, encouraging many people to become self-employed or top up their income through multiple income streams, which don’t always fall easily into the typical high-street lending parameters.
Many lenders automatically assess an applicant’s affordability based on income and expenditure via an algorithm. By doing so, viable customers are sometimes unfairly labelled as a risk, and rejected. This is not so at Newbury Building Society. We don’t believe computers should have the final say – for us, it’s all about the personal touch. Call us old-fashioned, but we like to talk to our customers, learning about their unique circumstances and doing what we can to help them fulfil their home ownership ambitions.
This approach to lending has helped us to support a variety of different mortgage cases. From retirees wanting their pension value to assist with affordability, the couple converting an old horse stable into an eco-friendly home with a self-build mortgage, to applicants who are self-employed, contracting, or receiving income in foreign currency.
We understand that a one size fits all approach to lending no longer has a place in the market. The rising popularity of later-life mortgages, families purchasing homes together through schemes such as joint-borrower sole proprietor and the continued popularity of remote work means that we strongly believe those with ‘non-traditional’ income streams should no longer be overlooked when buying a home.
Our qualified underwriters manually assess every application, reviewing each holistically based on the customer's needs. Our lending decisions are made by people, not by technology, and every application is considered on its own merit.
Our approach to mortgage lending can be summed up in two simple words: common sense. The last few years have shown us that we never know what is on the horizon. The workforce will continue to evolve, so too will the mortgage market, and we are moving along with it.
To find out more about our mortgages and our approach, click here.
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*Figures correct as of August 2023.
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGANST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.