Shawbrook limits all LTVs to 75 per cent; adds further assessments

In communication to brokers, the lender also highlighted the importance of ensuring that advice previously given to clients remained valid in the current circumstances.

The changes have come in response to the restrictions in place around the coronavirus crisis and have forced the specialist lending industry to make significant adjustments.

Shawbrook acknowledged the additional assessments would mean applications would take more time and said it has also increased rates and margins on certain products and LTVs.

However, in a communication sent to brokers, the lender added that all full mortgage offers already in place would be honoured, regardless of LTV.

All other pipeline cases will be assessed based on the new 75 per cent LTV maximum and the additional assessment over 65 per cent LTV.

Check bridging advice

In its short-term offering, the lender has withdrawn its heavy refurbishment products noting that: “The pandemic has substantially impacted the construction industry and supply chains. We are unable therefore to consider lending for this purpose until further notice,” it said.

Developer exit applications will be assessed on a case-by-case basis and will assume that the assets will be held for term, rather than sold.

Standard buy-to-let term affordability criteria will apply and market rent will therefore be a key consideration in applications, the lender noted.

And it added that changes to regulated bridging products may impact the initial advice provided. “Please ensure that all new and pipeline cases remain compliant with your advice process and MCOB rules prior to completion,” it added.

For commercial loan borrowers, it has added in a requirement for a minimum personal guarantee of 25 per cent of the loan amount.

Sustainable lending approach

Emma Cox, sales director for property finance at Shawbrook Bank commented: “As we are all fully aware, these are unprecedented times and at Shawbrook, we are constantly reviewing how to best support our brokers and customers.

“We have been following the impact of Covid-19 closely and have been considering Shawbrook’s response very carefully.

“Continuing to support our brokers and customers is one of our main priorities, and these changes to the commercial offering enable us to do just that.

“The product alterations ensure we safeguard the interests of our customers and maintain a sustainable approach to lending in a changing and challenging environment.”