The Intermediary – August 2025 - Flipbook - Page 81
B RO K E R B U S I N E S S
Case clinic
BUCKINGHAMSHIRE BS
C AS E T WO
Applicant using
Universal Credit to
The society can consider benefit income; however,
the amount of benefit income is restricted to
25% and it would need to be evidenced that it is
payable for the term of the loan. A Joint Borrower
Sole Proprietor (JBSP) could be considered if
parents are able to support.
supplement income
WEST ONE LOANS
single parent is applying for a mortgage on
a £210,000 home with a 15% deposit. They
work part-time, earning £22,000 annually,
and receive around £700 per month in Universal
Credit and child benefit.
The buyer has faced some difficulty as some
lenders refuse to include benefit income in
affordability, while others cap it or exclude specific
elements like housing support.
Even where accepted, extra documentation is
required, and calculations vary.
A
UNITED TRUST BANK
Typically, in this scenario UTB would require the
applicant to have a minimum of £25,000 annual
earned income before considering the additional
benefit income to support affordability.
However, we would welcome a referral in this
instance to further assess the applicant’s credit
history, as there could be scope to approve the use
of benefits with their earned income of £22,000.
If approved, 100% child benefit can be
considered as well as the standard allowance and
child elements of the Universal Credit.
Furthermore, if the loan term is longer than the
receipt of child benefit and Universal Credit, we
would need a plausible explanation of how the
benefit income would be replaced.
For example, the applicant’s earned income may
be increased by returning to full-time employment.
This explanation would then be sense-checked
for approval.
TOGETHER
Together could help this applicant as we accept
all forms of benefit income, but it will need to be
shown to continue during the term of the loan.
If their housing benefit was to stop because they
are moving from rented to owned, then this would
not be included.
Likewise, if child benefit or tax credits were
due to stop during the term of the loan we would
ask for how the difference would be made up, for
example through picking up more hours at work.
We could support up to 75% LTV, assuming the
property was of standard build.
This is a case that would have to be referred to the
mandate holder to approve the Universal Credit
income. West One is able to take child benefit and
Universal Credit into account when calculating
affordability. We may be able to lend to the single
parent on our Extra range, which allows loan-toincome (LTI) up to 6.5-times income. We’ll just
need to have clear proof of consistency of their
non-salaried income.
C AS E T H R E E
First-time landlord
with personal income
shortfall
first-time landlord earning £28,000 per
year is applying for a 75% LTV buy-to-let
(BTL) mortgage on a £240,000 flat.
The expected rent is £950 a month, which meets
rental stress requirements with some lenders,
not all. Some lenders require a minimum personal
income of £30,000 to £40,000 for first-time
landlords, regardless of rent.
A
UNITED TRUST BANK
First, it is essential that a first-time landlord with
UTB owns their residential property as we do not
consider applications for first-time landlords who
are also first-time buyers.
There is no minimum income requirement
for BTL applications with UTB, other than for
an applicant wishing to purchase a holiday let for
the first time, in which case the applicant would
need to have a £50,000 personal income.
UTB would expect the rental income to
satisfy our affordability requirements as we
do not top-slice from the applicant’s personal
income to meet a shortfall on rental calculation.
TOGETHER
Together could help this client as we accept both
first-time buyers and first-time landlords on our →
August 2025 | The Intermediary
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