How to overcome tighter lending restrictions

There’s plenty to be concerned about. The issues surrounding the new US President continues to have widespread ramifications. Brexit - and where the UK goes from here - is more uncertain than ever before and very few of us would want to even attempt to predict what the world will  look like a few years from now.

Yes despite the chaos surrounding us and the impact that is having on economic stability, when it comes to their businesses brokers say the biggest concern for them at present is lending restrictions, according to a study by Shawbrook.

This isn’t really surprising. Since 2014 the broker market has seen plenty of regulatory change thanks to the MMR and MCD and in that time we’ve also seen a change in government from a coalition to a Conservative majority. Lenders have had to deal with new rules and policy and have had to adjust their products accordingly and, indeed, lending restrictions have increased in many areas, particularly buy-to-let.

Unfortunately there is little brokers can do to get around this but there are steps they can take to make things easier.

If you know the lender is going to be more stringent, make sure you’re prepared. Gather as much information as possible from your client. Don’t delay the process further by having to go back and forth with requests for documents.

Become more flexible in your approach. There are many options available to a client seeking finance, make sure you’re aware of them and able to offer them where possible. Embrace second charge - it can be a life saver for the self employed or contract worker client who is struggling with high street lender criteria.

Make regular contact with lender BDMs. Make sure you fully understand any criteria changes or lending restrictions and if you are unsure ask for clarification. Your clients will want to know you’re fully up to speed.

Use technology wherever possible to make the mortgage process more efficient. If there are areas that will undoubtedly become more clumsy and time consuming, speed up other areas.

Finally, look at additional income streams. If tighter lending criteria will reduce the amount of mortgage business you can do, even slightly, supplement your income with GI and Life sales.