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Leek United improves key lending policy criteria

15 July 2019

Leek United has made enhancements to key aspects of its lending policy that responds to both a changing mortgage market and the Society’s own lending strategy. The policy updates will open up further avenues for customers and for brokers to assist more customers.

The main policy changes are:

Where a borrower’s retirement is over 10 years away, and we have evidence that a pension is in place then Leek United will use the borrower’s current income for affordability purposes rather than the projected pension income
We now accept income from self-invested personal pensions (SIPPs)
Affordability assessment has been removed for non-homeowner Buy to Let’s (BTL), we just need £20k income and normal interest rate coverage
The interest rate to be used for affordability assessment for a like-for-like re-mortgage has been reduced to the Society’s Standard Variable Rate

The acceptance of SIPP income to be taken into account caters for lending to an ageing population and to those customers who have this type of pension investment as part of their overall asset portfolio.

With the continuing evolution of the buy to let market, Leek United’s removal of an affordability assessment demonstrates a responsive approach to non-homeowner buy to let investors seeking to boost capital appreciation on a property or plan further ahead for their retirement.

John Kelly, Operations Director at Leek United, said: “These updates are designed to ensure our lending policies are in line with our current assessment when considering pension and SIPP incomes as well as improving affordability requirements for non-homeowner buy to let borrowers. We constantly review and respond to the prevailing market demands and our own lending strategy which these improvements take account of in a dynamic mortgage market.”

Lisa Buckley, the Society’s Head of Sales and Marketing, said: “I’m confident the changes to lending policy will be welcomed by our broker partners and provide further opportunities for them when it comes to assessing income and affordability for older borrowers and new buy to let customers.”