NatWest & Lloyds cap on loans over £500,000

Enable Independent Financial advisors are not surprised to note that NatWest has followed Lloyds Banking Group in capping mortgage income multiples to 4 x income where customers are borrowing more than £500,000. And from 6th June, the lender will also apply a maximum term of 30 years to loans worth more than £500,000.

Clearly this has been introduced to “address the inflationary pressures being seen in London” a spokesperson said: “NatWest Intermediary Solutions places a strong focus on affordability and already has measures in place to safeguard customers borrowing large amounts, for instance, reducing loan-to-values for larger loans. “This measure adds to those safeguards and is targeted particularly at customers interested in the upper end of the London market, where there has been the most inflationary pressure.” This follows on the heels of Lloyds last month announcing it was capping income multiples to four times income for borrowing above £500,000 as wages were not keeping pace with house price growth in London.

Without doubt this new policy will spread, mortgages from RBS Intermediary Partners and to RBS and NatWest mortgages for direct customers are set to change later this month.

There is still the option that the  Bank of England governor Mark Carney could be forced to intervene in the market and change the terms of Help to Buy. Striking the balance is clearly not easy and it is even harder to make individual choices along the way.  If you want to talk through your housing options with Enables IFAs we are here to help.

Your home will be at risk if you do not keep up your mortgage payments.

Issued by: Enable Independent Financial Life Planners
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Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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Getting the technology right

In the wake of the IT meltdown at the RBS group on 19 June during routine maintenance of the RBS computer system,  the Treasury Select Committee is calling on banks to check their IT systems.
The error caused automated batch processing software to malfunction and although this was quickly fixed, the bank was left with a backlog of data to process. Many RBS, NatWest and Ulster Bank customers found that their account balances had failed to update and some customers were unable to access funds, including wages, while payments failed to go through. RBS and NatWest customers experienced difficulties for around two weeks, while the problems took even longer to be resolved at Ulster Bank.

Every bank should be checking its IT systems. The whole system needs to have confidence that such a failure cannot happen again. RBS has launched an investigation into the problems and will look at risk management, contingency planning and the impact of cost-saving measures.

RBS has set aside £125m to compensate customers for the problems they experienced as a result of the meltdown.  Ulster Bank has said all customers who visited the bank between 19 June and 18 July and made a transaction will receive £20 to compensate them and is also refunding charges placed on people’s accounts in error and will reimburse “reasonable out-of-pocket expenses” incurred by its customers as a result of the disruption.

Independent Financial Advisors Enable of Bishop’s Stortford are glad to see government requiring action getting the technology right is vital in banking.