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NatWest to unveil self-employed criteria change in August

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  • 16/07/2021
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NatWest to unveil self-employed criteria change in August
NatWest has confirmed it will launch a new proposition for self-employed borrowers in the first week of August following reports regarding the treatment of these customers.

 

The bank does not currently lend to those who have applied for a Self-Employment Income Support Scheme (SEISS) grant on or after 14 July 2020, which was the second round of the initiative.

In an update today, a spokesperson for NatWest said a change to its self-employed offering would be coming next month which would require borrowers to have been back in work for at least three months before applying. 

This comes after the bank told Mortgage Solutions it would look at its criteria.

A spokesperson said: “We are currently reviewing our policy and we expect to launch a new proposition in the first week of August to help more self-employed people, whose existing businesses have been impacted, to be eligible to apply for a mortgage.

We will require that they have now been operating for at least three months leading up to application, to enable an appropriate assessment of affordability. We are committed to helping customers to meet their financial goals and enabling them to achieve home ownership, particularly for segments of the market for whom home ownership has felt far out of reach in recent months. 

 

Self-employed woes

A report from the BBC yesterday highlighted that a number of high street banks were excluding self-employed borrowers from taking out mortgages because they had received a government grant. 

This report followed articles from Mortgage Solutions which found brokers were dissatisfied with the options that have been available to these clients over the past year. 

Santander and Bluestone are two of the few lenders willing to overlook the challenges self-employed workers faced during the pandemic, by disregarding accounts for the 2020/21 financial year. 

Steve Seal, managing director of Bluestone Mortgages said: “It sadly is little surprise that at the times people need mainstream lenders most, they are let down by them. It has been clear to us for many months that a post pandemic world would see more potential homeowners unable to fulfil their dreams because furlough and self-employment would mean traditional lenders would say no.  

Seal urged the market to “think more holistically” about the self-employed. 

He added: “We recently updated our lending criteria to support self-employed borrowers impacted by Covid-19 and those returning to work from furlough as we believe we all have a moral duty to do what is right by them.” 

Other lenders said while there was no policy-based exclusion of those who had taken grants, they were reviewing applications from the self-employed on a case-by-case basis. 

John Penberthy-Smith, chief commercial officer at Saffron Building Society said the mutual was assessing self-employed and contractor mortgages on their merits. 

He added: “Working closely with brokers, we have accepted many self-employed, contractor and furloughed employees as our underwriting and intermediary team work closely during the application to get as much detail about their individual situation as possible.” 

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