Leeds Building Society

Changes to UK Residential Lending Policy

With immediate effect, Leeds Building Society will be making the following changes to the UK Residential Lending Policy.

Self Certification
The Society will no longer accept Self Certification applications.

Definition of Income
The sources of primary income will include: Employment, Self-employment, Pension and Investment. Any other forms of income will be reviewed.

Loan to Value
The maximum Loan to Value for applications will be 90%. Applications with a Loan to Value between 90% and 95% where appropriate collateral is in place. e.g. a guarantor.

Credit and Other Commitments
Self Building mortgages - any existing mortgage commitments will be deducted from useable income prior to applying the income multiplier.

Proof of Payment / Guarantors

Guarantors will not be accepted for Buy to Let applications
When a guarantor is present on a case, the Society's maximum age of 85 at the end of the mortgage term will apply to the guarantor.
Where the guarantor is over 85 at the end of the mortgage term, cases with an LTV of up to 80% will be considered subject to a full assessment of income and evidence that this will be sustainable beyond retirement.

Self Build
The maximum loan to value will be 80%. The maximum LTV for each stage of construction is 75%.

New Build
The maximum LTV for new build properties will be 80%. The LTV is to be calculated using the second hand value - i.e. property price less incentives.

Shared Ownership
Where there is a builders/vendors deposit for Shared Ownership properties, the applicant must still put down a deposit of 10% out of their own income

Scottish Homestake / Lift
The Society has agreed terms with this scheme and will only accept shared ownership applications from this or similarly approved schemes.

100% Lending
The Society will no longer offer 100% lending.

Sub Prime Lending
The Society will no longer offer Sub Prime lending.

Buy to Let

Maximum loan to value will be 70%.
Maximum number of properties in landlords portfolio will be 4.
Buy to Let is usually not applicable for first time buyers.
Maximum loan of £500k.
Buy to Let applicants in receipt of benefit income will not usually be accepted.

Family Purchase
Gifted family deposits will be accepted for standard lending from the following family members, as defined by the FSA: Spouse, Parent, Grandparent, Sibling, Child and Grandchild.

Prime Lending
Prime lending will be defined as follows: -

No arrears on a previous (or current) mortgage or other secured loan or unsecured loan (including credit / store cards, mail order credit and mobile phone contracts) within the last 12 months.
No arrears on any loan (unsecured or secured including credit / store cards, mail order credit and mobile phone contracts) within the last three years, where the cumulative amount overdue at any point reached more than two monthly payments.
No more than one county court judgement (CCJ) or default, which must have been satisfied within three months of issue, with a total value greater than £500, within the last four years.
Not being subject to an Individual Involuntary Arrangement (IVA) at any time within the last four years.
Not being subject to a bankruptcy order at any time within the last four years.
Not being subject to a previous property possession within the last six years.
Please note, Technical arrears (circumstances where the borrower has been the victim of banking error giving rise to late payment and the credit file has been updated accordingly) are to be excluded.
In the case of loans involving two or more borrowers, the impaired credit test is whether any one of the borrowers individually meets any of the six listed impaired credit conditions.
The Society reserves the right to reject any applications at its discretion for any adverse credit that may exist. If any adverse credit is identified in the previous 12 months, the application may be declined.

<< Return to Homepage