The Intermediary – October 2025 - Flipbook - Page 87
B RO K E R B U S I N E S S
Case clinic
C AS E T H R E E
C AS E T WO
Parental gift via equity
Zero-hour contract
release
with long service
nurse on a zero-hour contract is hoping to
purchase a £245,000 property with a 5%
deposit. They have worked continuously
with the same NHS Trust for four years, with
consistent monthly income of around £2,200.
Despite this consistency, the buyer has struggled
to find a lender willing to support in light of the
zero-hour contract.
A
first-time buyer is purchasing a £280,000
property with a 10% deposit gifted from
their parents. The parents have released
equity from their own mortgaged home. While the
funds are legitimate and traceable, lenders have
been hesitant due to concerns about financial
vulnerability, particularly with equity release.
UNITED TRUST BANK
The source of funds is legitimate and traceable
from UTB’s perspective, and we would expect
that the applicant’s parents have taken the
necessary advice before making a decision to gift
the funds. Our solicitors will complete anti-money
laundering and source of funds checks during their
conveyancing of the application. Any anomalies or
concerns will be raised accordingly.
A
UNITED TRUST BANK
UTB requires zero-hour contract applicants to be
in role for a minimum of 12 months, to give a true
reflection of the average income over that period
and assess for affordability.
Four years in the role is perfectly adequate to
evidence sustainability of income of around £2,200
per month. However, sadly in this example the
loan-to-income (LTI) exceeds the maximum UTB
would consider.
HARPENDEN BS
We can absolutely accept income from a zero-hour
contract as long as we have two years’ history.
Therefore, in this example, we could use all of the
income declared.
BUCKINGHAMSHIRE BS
The society may be willing to consider this
application, given the applicant’s strong and
consistent track record in their professional role,
both in terms of tenure and income level.
TOGETHER
Together could support this applicant with their
zero-hours contract, although we would not quite
be able to reach the 95% LTV needed.
The zero-hour contract worker would have to
have been in employment for at least six months
and have copies of their monthly payslips or three
months if they are paid weekly. They will need
to be provided to enable us to assess the hours
worked and income received.
If the property is of standard build, we can
support a mortgage of up to 75% LTV subject to
valuation and credit profile.
HARPENDEN BS
We can accept a gifted deposit from immediate
family, even where these funds have been raised
through further finance. Our maximum LTV is 85%.
BUCKINGHAMSHIRE BS
The society may be able to consider this
application, subject to our standard underwriting
criteria. As part of the assessment, we would
ensure that our vulnerability checks are completed
to confirm that the parents fully understand the
potential implications of increasing their own debt.
Alternatively, the society’s Deposit Lite offering
could be explored. This option does not involve
raising funds from the parents’ property but
instead places a charge on their property to
support the application. We would just require
consent for our change to be placed second from
the equity release company and would be subject
to lending criteria and LTV on the parents’ property.
TOGETHER
Together could support this applicant, although
at a maximum 75% LTV assuming standard build.
The gifted deposit will not be an issue as long as a
gifted deposit form is provided, though potentially
independent legal advice may be required. ●
October 2025 | The Intermediary
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