The Co-op Bank’s intermediary arm has loosened its affordability criteria to help first-time buyers who are struggling to get on the housing ladder.
Platform has raised the loan-to-income ratio to 4.85 where loan-to-value is less than or equal to 80 per cent including any fees added to the loan, subject to minimum disposable income.
The lower income multiple of 4.49 will continue to apply to any mortgage applications that do not meet the specified criteria.
Platform’s move follows an affordability squeeze on prospective homeowners, with house prices increasing faster than average earnings.
Paul Norcott, head of Platform, said: “We’re pleased to be able to offer this increased loan-to-income ratio to our brokers, helping them to find the best deal for their clients.
“We have included eligibility criteria for this more favourable loan to income ratio to ensure that we’re still maintaining a responsible stance on lending options.”
Daniel Bailey, principal at Derbyshire-based Middleton Finance, said the move was a welcome one for first-time buyers.
“It will help first-time buyers to borrow more, and Platform are competing with lenders that have bigger income stretches, so they are obviously looking to compete in that area,” he added.
“Often the client knows they can afford the amount because in many cases they are paying more rent than their monthly mortgage payments would be.
“First-time buyers still need to bear in mind that interest rates are likely to increase, so what their payments are now will potentially not be the same in two or three years’ time.”
simon.allin@ft.com
