News
YBS improves new-build and affordability criteria
Yorkshire Building Society (YBS) has upped its new-build loan to value (LTV) and increased borrowing criteria for households earning at least £50,000 per year.
YBS’ decision to increase its LTV for new-build properties from 85% to 90% follows a spate of LTV improvements from high street mortgage lenders.
At the same time, the bank has improved its affordability criteria. Households with a minimum annual income of £50,000 can borrow up to five times their earnings to buy a home, which includes new builds. Previously, only households with a minimum income of £60,000 would be offered the enhanced income multiple.
Research from YBS highlighted that 58% of non-homeowners aged 35-54 and 21% of those aged 18-34 could be giving up on buying their own home, leaving lifetime renters with a potential wealth gap of £2.6m.
Helping hand to buy a home
Ben Merritt, director of mortgages for YBS, said: “Increasing lending on new-build properties is a positive step [that] will help borrowers with a smaller deposit, including first-time buyers, who have their hearts set on a brand-new home.
Aldermore Insights with Jon Cooper: Edition 5 – Feeling enthusiastic about next year’s run-of-the-mill market
Sponsored by Aldermore
“The affordability changes are designed to build on the work we started with the launch of our £5k Deposit Mortgage in March, and the latest example of our commitment to supporting borrowers in finding a place to call home. They follow our research and analysis [that] recognised the challenges faced by so many trying to get onto, or move up, the property ladder.”
Renewed lending appetite
Mortgage lenders have increased their appetite for new-build lending. Santander upped its LTV for houses and flats to 95% in February, and in recent weeks, lenders such as HSBC, Nationwide, and NatWest have all made changes to their LTVs.
Brokers say price resilience in the new-build market along with a need to chase market share and signs of growing demand this year have encouraged lenders to be bolder with their criteria in this area of the market.
A Mortgage Solutions poll has revealed that almost a third of brokers say they are seeing more new-build incentives from housebuilders.