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Gatehouse Bank temporarily withdraws BTL and home finance products

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  • 16/08/2022
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Shariah-compliant lender Gatehouse Bank has temporarily withdrawn its buy-to-let and home purchase plan products due to high demand.

The lender said it had experienced high demand for its home finance products. Consequently, it had taken the decision to temporarily withdraw all buy-to-let and home purchase plan finance products by 5pm today.

The lender added that valid decisions in principle with a client signature could be submitted by 11:59pm on 25 August.

Gatehouse Bank said submitted cases which are not fully packaged or are unsigned by this date would not be progressed.

Founded in 2008, the bank offers home finance and buy-to-let products as well as savings and is Shariah-compliant.

In the case of a mortgage this means the borrower buys the property jointly with the bank, with the deposit as a stake, and the bank funds the rest of the purchase. This means the bank is the owner of the property and holds the property for itself and the borrower is a beneficial owner.

Borrowers lease part of the property and pays a monthly rental payment over the term, rather than interest. Each payment increases the borrowers’ stake and then full ownership is transferred to the borrower.

Roger Evans, director of distribution at Gatehouse Bank, said: “We have taken the decision to temporarily withdraw all buy-to-let and home purchase plan finance products due to an unprecedented level of demand.

“Whilst we understand that this will unfortunately cause some inconvenience for our brokers and customers in the short-term, we believe that these changes are the right thing to do in order to manage our service levels and continue to process all existing cases as quickly as possible.”

Over the past few weeks several lenders have had to temporarily pause new business in order to maintain service levels. This includes Coventry Building Society, Cambridge Building Society, Suffolk Building Society and Saffron Building Society.

Coventry Building Society has since reopened for new business.

Brokers have mooted that more lenders could follow suit and have said pausing for new business is on the whole better than constant repricing. They added that investment in technology and targeted product exits could be a solution.

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