The Bank of England has told UK mortgage lenders that they no longer need to run affordability tests for buyers. This was introduced in 2014 following the financial crash in 2007. The Bank of England said other strict rules such as how much can be borrowed based on your income will be sufficient.
The timing seems strange as the UK currently faces; a cost of living crisis, fuel crisis, food crisis and recent Bank of England rate increases. A lot of reporters and “TikTok financial experts” have been saying this will increase buyer demand and allow people to borrow more. However, I think the operative word the BOE have used is; “can” scrap affordability rules. With banks having been bitten fairly recently following the losses of the last financial crash and subsequent fines which were levied, I would think there is actually a good possibility that banks will retain the affordability rules for their underwriting of mortgages as an additional safety step.
Want to see more blog posts? Seem them all HERE