Going forward, Gen H will exclude utilities and communications from its arrears rules and has increased the threshold for such defaults in the last three years from £300 to £500 combined.
This will apply as long as a “strong rationale” can be given.
Gen H said many potential homeowners were locked out of homeownership because they had experienced defaults. The lender said this was especially prevalent because of the cost-of-living crisis, but added that a missed then later satisfied utility bill did not make a borrower untrustworthy.
Gen H said this change reflected the lender’s aim to support the changing needs of buyers.
Pete Dockar (pictured), chief commercial officer at Gen H, said: “Until recent years, this type of lenience wouldn’t have been treated as common sense amongst the high street. Lenders worry about defaults because these can imply that a loan, if granted, could be at risk. But this perspective locks out too many aspiring homeowners who deserve to realise their dreams.
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“We want to support everyone – not just those borrowers who fit that very, very narrow definition of creditworthy. We’re still living through a difficult economic period, and sometimes, borrowers need unique support to help them reach their goals.”
Gen H has been tweaking its criteria in recent months to improve affordability and widen access to potential borrowers. Earlier this year, it broadened the eligibility of its income booster mortgage to accept nieces, nephews and friends as income boosters.
It also reduced its stress rates to boost affordability.
