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Coventry changes affordability rules for zero hours and furloughed workers

  • 09/04/2020
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Coventry changes affordability rules for zero hours and furloughed workers
Coventry Building Society has amended its income and affordability assessment for new applications submitted during the coronavirus pandemic.


The society will now only accept borrowers who work on a zero hours contract if they are a key worker. Key worker jobs are NHS bank nurses and locums, non-NHS bank nurses, care home workers, supermarket workers, including delivery drivers, retained/on-call firefighters and armed forces reservists using zero hours income criteria.

If a borrower has been furloughed the mortgage loan to value will be restricted to 65 per cent loan to value (LTV).

Furloughing means to put staff on temporary leave.

Employers who take this measure can claim and pay out 80 per cent of the employees monthly wage under the government’s job retention scheme, up to £2,500 a month.

Companies can choose if they want to top up the remaining 20 per cent of the salary.

A letter from the borrower’s employer must be submitted with the case detailing the arrangement and whether the employer is topping up the remaining 20 per cent income.

Bonus payment, overtime, shift allowances and commission will no longer be accepted for affordability purposes.

Capital raising remortgages on residential properties are restricted to 65 per cent LTV.

Buy-to-let remortgages will only be accepted on a pound for pound basis. Further advances will only be considered if they are for essential repairs to the mortgaged property.

The changes take place from 8pm 9 April.

Applications that have been received before 10 April but not yet reached offer stage will be progressed using the normal underwriting process the broker tells the society of a change in the borrower’s circumstances.

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