Find out what's new for first-time buyers, foreign borrowers, and buy-to-let investors
Three UK building societies — Darlington, Nottingham, and Melton — have announced updates to their mortgage offerings, aimed at supporting first-time buyers, foreign borrowers, and buy-to-let investors in an increasingly challenging market.
Darlington Building Society revealed a series of changes designed to make homeownership more accessible for first-time buyers.
The mutual has extended its 95% loan-to-value (LTV) mortgages nationwide, excluding London, and increased the maximum loan size to £400,000 for 95% LTV mortgages and £500,000 for 90% LTV mortgages — up from previous limits by £100,000 each. In addition, Darlington has removed mortgage fees for first-time buyers and reduced rates by up to 0.35%.
“First-time buyers have been dealt some tough cards in recent years with rising interest rates, climbing house prices, and the wind-down of the government’s Help to Buy scheme,” said Chris Blewitt (pictured left), head of distribution at Darlington Building Society.
“We have always supported first-time buyers – as an early adopter of the Own New and Help to Build schemes – but even more innovation is needed in the current environment, which is why the Society has today announced a modified first-time buyer offering.”
Meanwhile, Nottingham Building Society has focused on enhancing flexibility for foreign nationals and returning expats by expanding its visa acceptance criteria and adjusting its mortgage rates.
New visa categories, including Global Talent, Pre-settlement, and Health and Care Worker, are now eligible, making it easier for skilled foreign workers and returning UK residents to access mortgages. The mutual has also reduced rates by up to 0.10% on its two-year mortgage range for foreign nationals.
Having introduced its mortgage proposition for foreign nationals last May, Nottingham has already received significant interest, with applications from over 30 different nationalities.
“Our goal is to ensure that we offer attractive and flexible products to meet the unique needs of our customers – from skilled foreign nationals and returning expats, to those looking for specific options like retirement interest only or buy-to-let,” said Alison Pallett (pictured centre), sales director at Nottingham Building Society.
“Expanding our visa acceptance criteria and adjusting rates and terms are important steps in continuing our commitment to making homeownership accessible for individuals with wide-ranging residency backgrounds, ensuring we can support anyone who aspires to own their own home.”
Melton Building Society has introduced a tiered interest coverage ratio (ICR) approach for buy-to-let applicants, which will apply across its buy-to-let products.
The new system sets an ICR of 125% for basic rate taxpayers and 145% for higher rate taxpayers, reducing the rental income requirement for lower tax band investors. For instance, a basic rate taxpayer seeking a £150,000 mortgage would now need a rental income of £1,186 per month, down from £1,376 under the previous rules.
“With these changes, we hope to offer landlords, particularly those in lower tax brackets, the flexibility to borrow the money needed to continue to invest in quality properties that offer tenants safe and secure homes for many years to come,” said Dan Atkinson (pictured right), head of intermediaries at Melton Building Society.
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