Principality has agreed to accept a three-year lease with its BTL borrowers who let their property through Cardiff-based Cadwyn Housing Association, to help address difficulties faced by homeless people.
Helen Armstrong, director of housing and community services at Cadwyn Housing Association, said: “There are a number of schemes that enable people to get hold of temporary accommodation but when people are housed in temporary accommodation, they are in some sort of limbo. This scheme allows people to enter into a more permanent housing arrangement because we know that getting a permanent home is key to actually starting to rebuild lives.”
She added: “One of the hurdles in getting this scheme off the ground was attracting the support of a mortgage lender.”
Mick McGuire, director of business development at Principality, added: “We are delighted to support this enterprising scheme from Cadwyn. We were impressed by this scheme because it has the weight and authority of a good quality housing association behind it, which helps to mitigate the risk for landlords and lenders. We hope this will pave the way for other housing associations and other lenders to follow suit.”
Paul Hearnden, managing director of brokerage My Mortgage Direct, welcomed the move. He said: “If Principality is altering its lending criteria – more the merrier. If the scheme is backed by a local housing association, then it sounds like a good deal all round. Really it is the lenders taking the main risk, though someone purchasing one of these properties should be aware that the reason mortgages usually include a one-year lease agreement is for if they needed to sell and move the tenants out.”
