MortgagesMar 2 2017

Housing association U-turn on lender ban

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Housing association U-turn on lender ban

A housing association that ruled out using a specialist lender due to long application turnaround times has backtracked on its hardline stance.

Centra Living had told Richard and Louise White it would not use Kent Reliance for shared ownership lending, dashing the couple's hopes of purchasing a three-bedroom semi-detached property for themselves and their three daughters.

The house, in Allington, near Maidstone, was on the market for £335,000, and Mr White had applied for a shared ownership mortgage with a 25-year term.

But the 38-year-old, who works as an accounts manager and compliance supervisor at financial services firm Cobdens, was left “devastated” when he was told Centra would not accept Kent Reliance mortgages.

He told FTAdviser: “The shared ownership housing association won’t use Kent Reliance even though they will lend us the money. It is so frustrating.

"They are saying Kent Reliance took up to three months to get a mortgage.

“They told me they had this problem before with Kent Reliance - they don’t complete in the time they should do. The housing association has given up using them.

“The housing association want the application done in six weeks - there are more costs if it goes on longer than it should do.”

The family had been private renting and were told they needed a 15 per cent deposit to open up the deal to other lenders.

A spokesperson for Kent Reliance said: “We are disappointed to learn that the gentleman in question was unable to buy his shared ownership property and surprised that the housing association should have acted in this way.   

“We are an active and experienced lender within the shared ownership sector and have been a long standing supporter of the market.”

When contacted by FTAdviser, a spokesperson for Centra Living said the housing association was keen to resolve this issue "as quickly as possible".

Mr White was later contacted by the housing association and told he could reapply for the property.

A spokesperson for Centra Living said: “Following discussions with our independent financial advisers and Kent Reliance, we are pleased to confirm that an agreement has been reached to suit all parties.”

Daniel Bailey, principal at Derbyshire-based Middleton Finance, said: “My experience when I have submitted business to Kent Reliance is they have not been the quickest but neither have they been the slowest, so I am surprised.

“It seems a bit tough on the lender but I guess they are going on their experience. It may be they have had quite a few cases that have taken some time, but generally I have found them a good lender.

“They could have gone through a period of being extremely busy - it could have been timing.”

simon.allin@ft.com