Students now preferred over professionals by lender!

by Readers Question

8:57 AM, 14th October 2015
About 3 years ago

Students now preferred over professionals by lender!

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Students now preferred over professionals by lender!

Anyone else come across mortgage provider preferring student let to professionals?suit

I have a house of 4 that has been let as is for 8 years and always instructed to put them on one contract – I had previously done 4 separate as they come and go at different times, but got turned down by one for doing this and the question is always ‘any students’. This time I’ve all my ducks in a row 4 professionals on one contract, 4th renewal and been turned own because they (Godiva) don’t want 4 ‘professionals’ but would take 4 students.

I’m just stunned, likewise my broker. Insurers always want ‘professionals’ – I’ve never quite seen the sense of this as being in Central London I can have overseas students who pay 6 months in advance and pay higher rents, but would always compromise my insurance and mortgage.

I’d be interested to hear if anyone else has come across this, but it’s nice to know that finally the lenders are catching up – as they finally did with HMOs

Many thanks

Harlequin Garden



Comments

Howard Reuben CeMap CeRER

11:18 AM, 14th October 2015
About 3 years ago

Sorry to say this but what stuns me more is that your Broker did not do his research pre-application and put you through the whole process.

Godiva's online published criteria quite clearly states;

"The property must be let to either a:

sole occupant
single family unit
maximum of four students

or
let to a Corporate Body
Tenants must not hold any level of diplomatic immunity."

However, OTHER lenders would allow this for you.

Bottom line, with hundreds of lenders out there (and more coming on to the scene on a regular basis to further help BTL landlords) there will of course be a myriad of criteria and policy amongst them all. So the best route for you right now is to work with a professional BTL mortgage Broker who knows the wider market, who knows how to present a 'case study' to the lenders before putting the Client through the mill and who can secure the right Offer quickly for you.

There is simply no defence for the Broker to be "stunned" in this particular case, it's not like Godiva hides their very clearly presented criteria for intermediaries to follow.

Harlequin Garden

17:00 PM, 14th October 2015
About 3 years ago

Thanks for your comments - I have to back my broker, he's done sterling work for me and the last time we used Godiva was for this property and they insisted on 'professionals' and he has used them since for other clients without this coming to light, this was a slip on his part to not have familiarised himself with their new stance. However, my question out there really was to find if anyone else had come across this new bias towards students and away from 'professionals' (a term I've always hated) - I have plan 'B' - I always have plan B, so am fine just irritated by this swerve by the lender.

Mark Shine

18:19 PM, 14th October 2015
About 3 years ago

Hi HG, yes it’s a little bizarre that Coventry/Godiva apply these rules.

Part of an email sent to them in Feb 2014 when I questioned their policy included:

‘However due to the nature of rentals in many areas of London, a large part of the demand for rental property is from young professional sharers.

I can see why the single family unit only rule could apply in lower rental demand / rural areas, but in many areas in London, applying this rule would have a significant negative impact on the marketability in an area that has exceptionally high demand from young and high earning professionals. If for example Coventry lends on a rental property in this area, and the landlord is only allowed to let to a sole occupant or single family unit, then with the largest part of the market off limits, this would significantly expose the landlord and increase the lenders risk on the security.’

They replied ‘As per point 11.6 of our Lending Policy the property must be let to a sole occupant or a single family unit. The only exception is that we will accept a property let exclusively to students (maximum of 4 students)’. They offered no explanation as to why they preferred students to professionals.


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