Firstly let’s take a moment to realise the truth. The current situation has nothing to do with the FSA leaning on banks (as has mischievously been claimed). The banks have decided to slow down lending.
Our clients want to move home. Since 2008 their children and families have got bigger, inflation has risen (how much does it cost to fill the car!?) but sadly neither their home nor income has expanded at a similar rate.
So we are having the same conversation week after week. Time to move – found the area, house on the market etc… Then we deliver the blow. It has to be on repayment from your current interest only.
Now we move into the realms of nonsense with the banks. For most people, their pension is their biggest financial asset.
Halifax agrees, and as long as your pension is currently worth a paltry £1million+ they are happy to include it. As if!
Woolwich are more lenient with their criteria, but somewhat irritatingly don’t seem to agree the value of a pension – pensions are ignored as repayment vehicles. The rest have various ideas, but hopeless loan-to-value ratios. Which brings me to NatWest.
I was given the information by them that if my client moved their banking and income to the group, after three months they might be offered 75% interest only. Imagine THAT conversation over the last few weeks with their terrible banking headlines. It’s bad enough losing a client for now, but to lose one forever…?
… and finally (and seriously) who is telling us to repay our debts? Incidentally, the clients are typically staying put.
Dominic Hennessy is principal at Just Us Mortgages