Nationwide, the largest building society in the UK, has recently altered its lending criteria to allow more contractors to obtain a mortgage, the Association of Independent Professionals and the Self Employed (ipse) reports.
As the article notes, contractors and freelancers are expected to account for 50% of the full-time UK workforce by 2020; so it’s about time that banks and building societies made the effort to accommodate this rapidly growing demographic.
In the past, it has been difficult for contract workers to be granted a mortgage and their options have been fairly limited. In what marks a significant move for the industry, Nationwide has extended its criteria so that self-employed contractors and those working on fixed-term contracts have a better chance of being able to buy a home.
As part of the new conditions, individuals with less than 12 months’ experience in their field will now be considered for a mortgage. What’s more, there will be no minimum income requirement, meaning that those on lower incomes will stand a better chance.
The lender will also now consider contractors from all sectors, and contractors will be able to use their full daily or hourly rate as a guide for their affordability calculations.
Among Nationwide’s products are a range of two and 10-year fixed-rate packages, including a 1.49% two year fix to 60% loan to value. There will also be options to 75%, 80%, 85% and 90% LTV, which are likely to be popular with those with less money to put down as a deposit.
Commenting on the news, Taj Kang – from Contractor Mortgages Made Easy – said that with Nationwide’s combination of ‘Help to Buy,’ ‘Right to Buy,’ market-leading rates and high Loan-to-Value products now being offered to contract workers, “the financial future is looking very bright for Contractors.”
This positive outlook looks set to continue “as more and more lenders open their eyes to the security that is offered by the nation’s non-permanent professionals,” he added.