FINANCE
When one-size doesn’t fit
EXPERT COMMENT
The recent relaxation of limits on higher loan-to-income (LTI) lending by the regulators, was exactly what we have been campaigning for, to loosen the shackles and enable us to support even more borrowers – and particularly rst time buyers, in being able to buy homes. The simple fact is that there are customers, including rst time buyers, who can afford to borrow more than 4.5 times their income, who have been shut out of this market by the existing regime. We can now offer them a lifeline to borrow what they need for their dream home in line with our commitment to responsible lending. This is crucial in the current economic environment where house prices in many parts of the UK continue to rise at a faster rate than incomes. We have been preparing new offerings in anticipation, which will cater for the signi cant proportion of borrowers out there who are very creditworthy but, under previous rules, struggled to borrow enough to cover the cost of their desired homes. We will continue to campaign and work with regulators to ensure our borrowers’ needs are represented, while in the meantime doing everything we can to enhance their access to suitable solutions.
Borrowers with a secure job, buying an ordinary home with a decent deposit are spoilt for choice when it comes to lenders – but not everyone is in that position. Kay Hill looks at the wider mortgage market
90 lenders that accept freelancers, sole traders, contractors and small business owners.
If you are in permanent employment, want to borrow four times income, have a good credit rating and over a 10% deposit, then lenders will be falling over themselves to offer you a mortgage. If that’s not your position, then read on, because there may still be a lender out there willing to help. NON-STANDARD EMPLOYMENT The world of work has changed, with more people self-employed (around 12% of the UK workforce), working fixed term contracts or part of the gig economy – thankfully, the world of mortgages is catching up. If you have three years of business accounts, preferably certified by an accountant, you should have no problems with a mainstream lender. If that’s not the case, then look for a lender that uses manual underwriting to look at more complex cases, such as The Stafford Building Society, which will consider contractors, zero-hours workers and small business owners. Alternatively, try a mortgage broker that specialises in this area, such as CMME Contractor Mortgages. There’s a fee of £995, but it has a good reputation and works with over
NO OR LOW DEPOSIT First time buyers who are renting pay large amounts each month, but struggle to save for a deposit. Luckily, more and more lenders are offering 95% mortgages as part of their standard offering, and some will go further. If you have family members who could set aside savings for a few years to offset the loan, then look at Lloyds’ Lend a Hand (three-year fix, not available for new build, Shared Ownership or Right to Buy, 4.44%), Barclays Family Springboard (five-year fix, not available for new builds, zero fee, 5.29%) or similar products. If you have a guarantor, Bath Building Society 100% Rent A Room mortgage allows you to add the income of having a lodger to the calculations, up to six times income. Two-year discounted variable 5.09%; two-year fix 5.2%; five year fix 5.3% all with £999 fee. If you are doing it alone, don’t despair. Skipton Track Record mortgage lends 100% LTV, up to five times income, with monthly repayments of up to 120% of the amount that
Ben Merritt , Director of Mortgages,
Yorkshire Building Society
90 First Time Buyer February/March 2026
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