The first comment was from Arron Bardoe, replying to the article: Barclays cuts LTI for all cases not at offer.
Bardoe said: “While many of us are beyond disappointed, there is only one reason Barclays will have taken this decision.
“About six years ago, larger lenders were limited to not have more than 15 per cent of the loans above 4.5x income. I suspect Barclays has just realised it is on the cusp or has exceeded this threshold.
“Historically, Barclays backbook was low loan to income (LTI), so it was able to freely continue above 4.5x since the rule change.”
He added: “Continuing lending would put it at risk of regulatory fines, which I guess is a great deal more expensive than paying customer complaints.
“Nonetheless, there should be an exceptions policy as it should also remember it must Treat Customers Fairly (TCF). Would the fines for breaching the lending limits exceed the fines for failing TCF?”
“An example is a client of mine where we have been trying to submit a further advance application for six weeks. Due to technical glitches and errors by Barclays, this case is still to be submitted. His case should have been offered but will now be declined.
“He will need to pursue a secured loan and register a complaint for the additional costs. As all the delays are due to Barclays, I would argue this should be an exception,” he continued.
He added: “Nonetheless, I bet I am going to have a better day than the Barclays’ business development managers (BDMs) today, so let us all try to remember it is not their fault when we call them today.”
Government help needed
The second comment came from John Azopardi, in response to the article: HSBC withdraws 90 per cent LTV mortgages for new customers.
He said: “We are in desperate need of a government-backed mortgage guarantee scheme. The stamp duty holiday has been a great help but access to higher loan to value mortgages is key to the market operating properly.
“Lenders are justifiably not prepared to take the risk they were a year ago.”
He added: “If the government assumed the liability for loans over 80 per cent it may not necessarily cost them anything, but at the same time give the lenders the assurance they need to continue to support the market.”