This week’s top comment came from Paul Adamson with his reply to the article: Lenders ‘ignoring’ small CCJs and looking to lend, say brokers.
He said: “The situation will continue to worsen. In the past three weeks two clients have been declined for mortgages. Having dealt with both for some considerable years, I was surprised at the automatic declines, especially when told by the lenders they were due to adverse credit on both occasions.
“Having now reviewed both clients credit reports, both were anomalies, one client thanks to a gas provider showing four missed payments in a row and for the other client, a utility company showing status four then five without status one, two and three first.
“The utility companies are providing incorrect information to the credit agencies, to fix can take months. It is ok saying small CCJ’s are been ignored by some lenders, however if you want the best rates or solutions and need to borrow more than 65 per cent then you could be facing hardship for something not even guilty of.
“If you see a county court judgement and were never aware of it, apply to set it aside and have the entry removed from your credit report and force the alleged creditor to full disclosure in the county court.
“I’ve helped three or four clients remove erroneous judgements to gain them much better mortgage solutions. Of course this only helps if they are in no major rush, but it’s a sign of the times and things will undoubtedly worsen once landlord records and such are passed to credit agencies.
“Surely the agencies must take some responsibility for the data record.”
Smaller mutuals are far ahead
Another contribution came from Lisa Peach-Hill to the article: Buying with friends and family a growing option for first-timers – Sedgwick.
She said: “I am just advising four people who wish to buy together as we speak, and at first I was surprised how many lenders would consider this – initially I was quite pleased about the result until I started drilling down into the criteria.
“Many of the 21 lenders will allow four applicants, but only use the income of two. That was quite disappointing. Metro and Virgin do this well, but most of the smaller building societies are head and shoulders above mainstream lenders for this.
“I had 21 lenders on my list, including three specialist lenders who I didn’t look at due to rates. By the time I’d gone through each of them I had four lenders left to work with. Not a lot for a very straightforward prime case.
“I’d like to see more mainstream lenders review policy on this, as its a great way to help non-homeowners onto the property ladder. Of course there are dangers of people being unable to pay the mortgage if the living arrangements fail, but is this not the same risk as couples who buy together splitting up?”
Tenants on benefits
The subject of landlords letting to tenants on benefits also provoked several comments.
One such contribution came from Paul Barrett, with his response to the article: Metro Bank latest lender to remove landlord restriction for tenants on benefits.
He said: “Still not interested. I don’t care whether my mortgage lender will now allow housing benefit (HB) tenants or not. The business proposition is still unviable.
“The eviction process would need to be changed to facilitate removal of a HB tenant after two months of rent default. Which is one month and one day. Then the following day the HB tenant booted out.
“As this will never occur I will never take on a HB tenant at the outset of a tenancy. Then there is the not so minor issue that HB is rarely keeping up with market rents. So why would I let to HB tenants when I could make more profit out of non-HB tenants. Then there is the issue that councils require a signed assured shorthold tenancy before they will consider whether the tenant applicant qualifies for HB.
“So what happens when the HB application is rejected? I would be left with a tenant with no means to pay any rent. So then I would have to evict the tenant as if the tenant vacated then they would be deemed to be intentionally homeless and therefore the council would have no housing duty towards the tenant.
“Then there is the issue that after eviction there would be no chance of civil recovery of unpaid rent from the evicted tenant. HB tenants generally don’t have two pennies to rub together.
“Then there is the problem of Universal Credit and tenants witholding the full contractual rent from the landlord (LL). Then there is the problem of claw back if rent is paid directly to the landlord.
“If the general public actually understood why landlords are rejecting HB tenants they would appreciate that a mortgage lender now allowing HB tenants is a minor issue in the overall scheme of things.”
Changes will make no difference
In the end, the last contribution to the same article came from Dougie.
He said: “All valid points and that’s why lenders allowing tenants on benefits will make no difference to the rental landscape.
“I noticed some letting agents in the North East seek out these types of tenants, but watching on TV how much time and effort these poor agents spend on being social workers rather than letting agents.”