Violet*, an advertising manager from Oxfordshire in her mid-40s, had confidently enquired about mortgage options to buy a new property last August.
“We had found a property we liked and had a meeting with Barclays, who our current mortgage is with. After discussing options to port our mortgage [keeping an existing mortgage deal but buying a new property], and additional borrowing to buy the new house, the bank basically tick-boxed it all and even would have lent us considerably more than we needed,” she said.
But the following week, Kwasi Kwarteng’s mini-budget came, triggering a domestic financial crisis and higher mortgage costs for millions.
“Our chain collapsed because of it, we lost the property we wanted to buy. We found a new house in the new year, for a whole £100,000 less than the one we wanted previously. Hurrah, we thought!,” Violet said.
Despite the much lower mortgage request for the cheaper property, and although all the family’s other incomings and outgoings remained the same, their bank reduced the amount they were prepared to lend by £250,000.
When pressed, Barclays explained that the bank’s affordability algorithm had changed. “They said basically, ‘Because of everything that’s gone on in the economy, we’ve pretty much doubled the amount needed for the average cost of living per person’.
“The moment we confirmed our number of dependents – only two, we’re not the Baldwins! – a huge chunk of our monthly income was ringfenced to cover the cost of living: food, utilities, petrol.”
The couple are now hoping to secure a mortgage with a loan-to-value of 78% with a different provider. “But with the interest rates and affordability calculations changing constantly, the stress continues. It’s all become a bit of a
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