The financial press looked this weekend at the impact of new affordability rules coming into force next month in response to the FCA’s Mortgage Market Review. Experts warn that stricter criteria could hamper borrowers’ chances of securing a mortgage, with the Financial Times revealing that some lenders are already reducing borrowing levels for those who have monthly commitments including pension and life assurance contributions. Evidence of payday loans or regular payments to gambling websites will could also lead to a decline, reported the Observer, whereas paying off as much unsecured debt as possible, registering on the electoral roll and avoiding major lifestyle changes prior to applying will all increase the chances of being accepted.
Criteria has also tightened in areas other than affordability. Mortgage brokers warned in the Sunday Telegraph that, like the self-employed, workers on increasingly popular zero-hour contracts will find their options extremely limited. Lenders are cautious as hours are not guaranteed and income often fluctuates.
Elsewhere the Mail on Sunday looked at the effect of tougher lending criteria on second-steppers. With low-equity mortgages becoming more widely available, financially strong home owners could finally be able to take the next step on the property ladder, however experts say the self-employed, those with an interest only mortgage or a large loan could find that they are turned down despite no change in circumstance since they last bought.