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Thought leadership


Skipton Intermediaries

Skipton’s view on Shared Ownership

Shared Ownership is an affordable home ownership scheme available for both purchases and remortgages, and may be a more affordable option for eligible first time buyers to get on to the property ladder.

You can find out more about Shared Ownership in their exclusive guide here.

Alex Beavis, Head of Mortgage Products shares his thoughts on Shared Ownership:

‘Shared Ownership, perhaps more than any other scheme or initiative, best targets those first time buyers requiring support as it provides a much needed bridge between the private rented sector and the security of mortgaged home ownership.

Not only do shared owners benefit from lower deposit requirements, and more often than not, shiny new homes, but the rental caps on the unowned equity coupled with the typically lower loan sizes required mean that the total paid on rent and mortgage payments should be significantly less than rental payments for most shared owners.’

Full details of their policy can be found here.

Foundation Home Loans

It’s one of life’s ironies for consumers that often, in order to secure credit, you already need to have it.

Any article on improving credit scores, for example, will focus on the necessity of having a credit card, or a loan, or having had checks done in the first place by various utility companies, lenders, providers, and the like.

All well and good, but what happens as a consumer when you lose track of the credit you have? I recently read research from Comparethemarket.com, which looked at ‘Buy Now, Pay Later’ (BNPL) schemes, of which it estimates 10 million people across the UK have purchased goods/services through in the past year.

Two-fifths of those questioned didn’t know that a missed payment on a BNPL scheme would turn up on their credit report and be visible for six years, with all the potential impact you might expect. Indeed, as they know, customers could be turned down for future credit (including mortgages) because of this.

Sometimes, the nature of the debt they (and our clients) have, makes it difficult to keep track of when payments might have been missed. What happens if you’re a tenant, for example, and any arrears/missed payments are attached to the rental property? What happens if a debt you did pay off, continues to show up on a report?

Of course, there are ways and means of ensuring this does not have an impact, but Foundation also know that (according to money.co.uk) five million people carried more than £10k in loans and credit into 2020 in the UK alone. How many of those five million might miss a payment? How many of the entire UK population might be unaware of issues on their credit record which have not been sorted?

They hear a lot about clients coming to advisers, outlining their financial situation, only for the adviser to find out later down the line about their debts/arrears/CCJs/missed payments, etc. The common response is to suggest that the client was being duplicitous, attempting to hide their financial background and thinking they could pull the wool over the eyes of lenders in order to secure credit.

That may be the case for some, but far from all, and I have some sympathy for those who may simply have lost track of debts, or indeed, be completely unaware that their credit report has been blotted in such a manner.

That’s where Open Banking and the like, can be incredibly useful to advisers, providing a much clearer view on the true state of their client’s finances and any potential issues that may not actually be known by the client themselves.

In a way, they have a two-prong educational message to push here to consumers, especially when it comes to mortgage access for those who may have CCJs/arrears/missed payments, etc – whether they know about them or not.

Firstly, it’s the catch-all message that, regardless of what they have in their past, there is a very strong chance that a mortgage can be secured for them. Especially, when it comes to the smaller debts that might have been accumulated.

Secondly, it’s to those who know exactly what their financial situation is and have concluded that they have no chance of securing a mortgage to purchase or to remortgage.

Here, they need to educate that taking themselves to a mortgage adviser who can access the product ranges of lenders like Foundation, might give them an almighty surprise. Foundation are a long way from the Credit Crunch now and they have product options that are likely to fit many types of clients, especially if they have been turned down by the high-street lenders. Flexibility is far greater, debts are reviewed differently, and the paper trail required may not be as onerous.

Debt, of one kind or another, tends to be a fact of life for most people. Some people are good at keeping track, others not so, and some are often completely unaware of their situation.

Helping clients understand their credit record, their credit score and the mortgage options available to them can be a real eye-opener, and with many lenders offering options to these very individuals, it makes sense to target such clients and to ensure you’re there to help those who might not know how to help themselves.