Lenders have amended their contractor mortgage policies according to new reports.
The changes are attributed to April’s IR35 reform in the Contractor Weekly article.
The article says the new policies mean that two banks will offer specialist contractor mortgages to those operating inside the rules.
Contractor Weekly says that each application will be assessed by an underwriter and considered on a case-by-case basis.
A spokesperson for one of the banks mentioned in the article is quoted as saying: ‘As a bank we understand that contractors need mortgage products that are flexible enough to accommodate their professional and financial situations and that is why we have made these positive amendments to our lending policy.’
In the article, Nick Morrey, of independent mortgage broker John Charcoal, adds: ‘Lenders would be well advised to consider what they need to do going forward, as some have buried their heads in the sand, but we will likely see a large drop off in perfectly robust self-employed mortgage applications.’
Morrey explains that IR35 reform will have an impact, but it is currently being compounded by the effect of the pandemic on earnings, meaning lenders will have to formulate how they assess applications.
To read the full article, visit Contractor Weekly.
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