A source, who wished to remain anonymous, argued that Halifax was beginning to take a much more stringent test to assess borrowers’ affordability, and was attempting to cut out borrowers working from CIS contracts. He said: “It seems as if the market is going back to the way it was in the 1990s, with major lenders cautious about the building trade and lending to people in this market. It appears very short-sighted of Halifax, as it is usually quite flexible in its lending approach.”
He added: “Halifax won’t accept people on CIS because it can’t see the future earnings of the borrower, in some cases even after previous pay had been confirmed by a number of sources, so self-cert becomes even more prevalent.”
Rod Murdison, proprietor at Murdison & Browning, said: “With most people on short-term contracts or with CIS cards, most lenders will expect to see something like six months’ continuous work before they will look at the applications.”
Brian Murphy, head of lending at Mortgage Advice Bureau, added: “With the launch of affordability based models, it could be argued that lenders have in fact loosened their grip on what they ask for from borrowers, and it is not really an issue that we have seen, although for certain demographics, it may be the case.”
However Paul Fincham, senior media relations manager at Halifax, denied the lender was targeting the building industry. He said: “Halifax has made no specific policy changes relating to borrowers with CIS contracts.”
