Significant demand for mortgages post-lockdown combined with enhanced support for first time buyers has led Nationwide to make necessary changes to ensure it maintains its service levels at a difficult time.
Since the easing of lockdown restrictions and the implementation of the Stamp Duty changes, Nationwide Building Society is processing around a third more mortgage applications per day than it was doing before lockdown and is currently helping one in four of the UK’s first time buyers.
Due to the high volumes, the Society is having to take measures, including amending our rates, to ensure that it is able to maintain its high levels of service, while continuing to lend and process as many applications as possible as it supports the wider housing market.
As a result of the extra complexity of underwriting self-employed applications in these uncertain times, and given each application is reviewed individually, Nationwide will, from Wednesday 5 August, temporarily limit lending to all self-employed borrowers to a maximum 75% Loan-to-Value.
The impact of Covid-19 and the uncertainty surrounding employment status and future affordability has meant underwriting one self-employed application is currently taking two or three times as long to complete.
However, the Society hopes this will be a short term measure and aims to return to higher LTVs for self-employed borrowers as volumes stabilise.
Support to the wider housing market
Nationwide has a history of supporting the housing market through tough economic times. That was evidenced during the last financial crisis when the building society sector accounted for 50% of net mortgage lending, with Nationwide contributing 80% of that.
That history of support has continued during the Covid-19 pandemic, with the Society continuing to support the wider market in the following ways:
- First-time buyers: One of the only major lenders lending at 90% LTV; the only mainstream lender to have no restrictions on the volume of mortgages available
- Gifted deposits: Accept full gifted deposits up to 85% LTV; 25% permitted for 90% LTV mortgages
- Existing mortgage members: Supporting them with lending above 85% on a like-for-like basis
- Home Support Package: Range of options for those in financial difficulty, including secondary payment breaks and pledge to stop any repossessions until May 2021
- New build properties: Continuing to lend on new builds via the Help to Buy scheme
- Shared ownership: Options available for those who need extra support getting onto the housing ladder
Henry Jordan, Director of Mortgages at Nationwide Building Society, said: “Nationwide has worked tirelessly to keep the mortgage sector moving at this challenging time. We are processing around a third more mortgages per day than before lockdown, and helping one in four first time buyers, something we expect to grow as we remain one of the only mainstream lenders lending at 90 per cent LTV.
“As a responsible lender, we need to ensure that members can afford their mortgage payments both now and in the future. The impact of Covid-19 has meant that underwriting self-employed mortgage applications has become far more complex. Rather than stay in the market but with poor service standards and high decline rates, we want to give clarity to brokers and applicants by announcing we are temporarily restricting the maximum LTV for self-employed cases to 75 per cent. We will still do all we can to support existing mortgage members looking to move home by supporting up to 95 per cent on a like-for-like LTV basis.
“We will continue to keep our policy under review and hope to return to higher LTVs for self-employed borrowers in the near future.”
