Traditionally, among South Asian communities, extended family living was the norm and everyone contributed to the household expenses. In North London, you never bought fruit and vegetables from the supermarkets it was always a trip to more cost-effective outlets in Wembley where your money took you further.
Lenders never really understood the mechanics of how families’ affordability actually worked.
For these families, when there is an average of four to six incomes coming into the household, why is it the norm to only take the two primary incomes into consideration? How do I make the underwriters understand reality?
In the last two decades, families who have come from India and East Africa, live in large numbers under one roof to help family members save up and then move on to purchase their own property. This same dynamic is now how the Eastern European families are functioning and moving into property ownership.
However, impediments remain along with language barriers and a banking system that doesn’t understand pooling of family finances.
Instead it is seen as potential money laundering which raises red flags when multiple transactions appear on bank statements.
How is this inclusive or offering lending access to all cultures?
As the NHS evolves and offers information in multiple languages, why can’t financial services, with technology at the forefront, do the same? Offering different language drop downs on a website tool bar to improve access is an obvious solution.
The industry has failed to evolve inclusively, when there is consistently less access to bank branch staff, which means it’s more difficult for people who don’t speak English as a first language.
Recognising familial wealth
It’s been a breath of fresh air to see one lender, Generation Home, pave the way using multiple family income streams harnessing the legal process through its ‘deposit booster’ mortgage to protect all deposit or income contributors without being on the property title deeds.
Coventry Building Society is another of the handful of lenders which have improved terms on the definition of who can gift a deposit. Where historically, it was just parents or grandparents, recently we have seen an extended shift to include stepparents, half-brothers and sisters, aunts and uncles, adopted children and so it goes on.
I would actually rename it a diversity and inclusivity mortgage.
However, I question the number of brokers that know it’s out there or truly understand how it works, but as a minority broker with clientele from the South Asian diaspora this is what we have been waiting for decades.
Given the cost-of-living crisis, I believe the UK will now have more extended families living together as they just cannot afford to live alone. Lenders will need to come up with more innovative ways to ensure buyers still know they are open to lend.
In turn, this means brokers’ roles become more complex to ensure their knowledge is up to date as they relay these complexities across to clients. If brokers are only operating in the vanilla lending space, then they will find it tough, they will need to re-educate themselves and advance into this specialised arena.
Dina Bhudia is a British Mortgage Awards Changemaker nominee – an award which recognises professionals in the sector who are delivering either diversity and inclusion or sustainability initiatives to make our industry fairer, more balanced, or more environmentally conscious.
