In partnership with the Financial Services National College (FSNC).
Our finances are becoming more complicated.
From the rise in the number of people who are self-employed to the popularity of having a multiplicity of income sources, the financial habits of consumers are changing. And change brings with it lots of challenges.
The lending landscape: then and now
Take the mortgage market as an example. In 1952, there were just 1.65 million borrowers. Now, there are nearly 11 million mortgages held by owner-occupiers. Before the financial crash in 2008, lenders approved loans which did not require verification to confirm the borrower’s affordability. Now, proof of regular income and assets to repay a loan must be evidenced.
As the mortgage market adjusted to the new world post-financial crisis, the wants and needs of consumers diversified rapidly. What once may have once been considered as an ‘unusual’ or ‘risky’ mortgage application – main source of income paid in as Euros, for example – started to become commonplace, and many lenders started to fall behind.
Some lenders rejected viable mortgage applications which sit outside of the typical high-street tick boxes – and it’s still happening today.
There are lenders who automatically assess an applicant’s affordability based on income and expenditure via a computer algorithm. By doing so, viable and responsible customers are unfairly labelled as ‘risky’, and therefore, rejected. This is not so at Newbury Building Society.
We don’t believe computers should have the final say when it comes to lending. For us, it’s the personal touch. Call us old-fashioned, but we like to talk to our customers! We think it's important to understand their unique circumstances to try and help them fulfil their homeownership ambitions. This attitude has helped us support lots of different mortgage cases. From an applicant wanting her pension value to assist affordability, a professional receiving payment from an organisation whilst in training to many applicants who are self-employed or contracting.
We understand a ‘one-size-fits-all' lending approach is no longer relevant. We believe those with ‘nontraditional’ income streams should no longer be overlooked when looking for a mortgage and buying a home.
Our qualified underwriters manually asses each application holistically based on the customer’s needs. Our lending decisions are made by people, not computers; every application is considered on its own merit.
So, our approach to mortgage lending is simple: we use common sense.
Ultimately the workforce will continue to evolve, so too will the mortgage market, and we’re moving along with it.
If you'd like to talk to a qualified mortgage adviser about your options, contact us today. We offer face-to-face, telephone and video advice mortgage appointments for those who cannot make it to a branch.
*all figures and data correct as of January 2020.
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.