London Daily

Focus on the big picture.
Saturday, Feb 22, 2025

"Can I get a mortgage if I'm only on 80% pay?"

"Can I get a mortgage if I'm only on 80% pay?"

"I have to laugh about this whole situation because if I didn't I'd cry instead."

Sophie Hockin, 29, was due to exchange on her first home on 6 April before the world changed and the deal fell through.

"The seller had financial concerns because of coronavirus and so pulled out".

Sophie's now on the look-out for a new home but is worried she won't be able to get the same mortgage as before the pandemic, because her salary's been cut.

"I still need to buy somewhere because I moved out of my rented accommodation in February, and am now house-sitting for a friend - only because he's stuck in lockdown at his parents' house though.

"But since lockdown, my salary was cut to 80% of what it should be, so I just don't know what's going to happen.

"My employer says 'salary reductions will be reversed when deemed safe to return to a normal routine which is hoped to be in approximately three months'.

"But we just don't know what's going to happen - whenever are we going to 'get back to normal?'"


Pay cut for millions

Sophie added; "I don't want to go back to renting. It's nearly impossible to save and I'd also have to get tied into at least a six-month or probably more likely a 12-month contract, which I really don't want to do."

Sophie is not alone. At least six million people have been 'furloughed' by their employer on the government's Job Retention Scheme (JRS), which means for many their pay has been cut to 80% of their salary - up to £2,500 per month - which the government is paying.

But many others, who are still working, have also seen employers cut their wages, all of which could affect a person's ability not only to get a mortgage, but also how much they could borrow.

UK Finance, the trade association for the banking industry, told Radio 4's Money Box: "It will be a matter for each individual lender to determine exactly what approach to take, but under FCA rules lenders must lend responsibly and consider the affordability of the mortgage in the long term.

"It would not be in the customer's interest to lend [them] more than they can reasonably afford. That is why a detailed income and expenditure assessment is undertaken before a mortgage is granted."

For anyone wanting an answer about their own specific circumstances, the only way to find out is by contacting any potential mortgage lender, talk them through their finances and see what the lender says.


Mortgage relief

Around two million people are thought to have made the most of the offer to take a three-month mortgage holiday from lenders.

Mortgage providers are also offering home-buyers who had exchanged contracts - but have not been able to complete the deal and move in - the option of extending their mortgage offer by up to three months, to allow the deal to take place after restrictions are eased.

That doesn't help in Sophie's case, as her previous mortgage offer was tied to the property she wanted to buy, which is no longer on the market.

Martin Stewart, founder and director of independent mortgage brokers, London Money, says most lenders are even more risk-averse than normal at the moment. "I would suggest if Sophie has had a 20% pay cut, lenders will be working off of her new lower figure and not her previous pre-crisis income. "If her employer is guaranteeing a return to full salary within a short period of time, it may be that some lenders can take a commercial view, but then a lot will depend on the other factors affecting the case - loan size, affordability, loan to value, credit score etc. They will also insist on written confirmation of when she may be returning to her full income. "Lenders are also paying much closer attention to the sectors that mortgage borrowers are working in. If they believe the at-risk industries such as tourism, aviation, hospitality etc are likely to take longer to return to any sense of normality, then they may well decide the risk is too high and ratchet back the lending or just simply not lend at all."

Newsletter

Related Articles

0:00
0:00
Close
Good News: Senate Confirms Kash Patel as FBI Director
Officials from the U.S. and Hungary Engage in Talks on Economic Collaboration and Sanctions Strategy
James Bond Franchise Transitions to Amazon MGM Studios
Technology Giants Ramp Up Lobbying Initiatives Against Strict EU Regulations
Alibaba Exceeds Quarterly Projections Fueled by Growth in Cloud and AI
Tequila Sector Faces Surplus Crisis as Agave Prices Dive Sharply
Residents of Flintshire Mobile Home Park Grapple with Maintenance Issues and Uncertain Future
Ronan Keating Criticizes Irish Justice System Following Fatal Crash Involving His Brother
Gordon Ramsay's Lucky Cat Restaurant Faces Unprecedented Theft
Israeli Family Mourns Loss of Peace Advocate Oded Lifschitz as Body Returned from Gaza
Former UK Defense Chief Calls for Enhanced European Support for Ukraine
Pope Francis Admitted to Hospital in Rome Amid Rising Succession Speculation
Senate Republican Leader Mitch McConnell, at the age of 83, Declares His Retirement.
Whistleblower Reveals Whitehall’s Focus on Kabul Animal Airlift Amid Crisis
Politicians Who Deliberately Lie Could Face Removal from Office in Wales
Scottish Labour Faces Challenges Ahead of 2026 Holyrood Elections
Leftwing Activists Less Likely to Work with Political Rivals, Study Finds
Boris Johnson to Host 'An Evening with Boris Johnson' at Edinburgh's Usher Hall
Planned Change in British Citizenship Rules Faces First Legal Challenge
Northumberland Postal Worker Sentenced for Sexual Assaults During Deliveries
British Journalist Missing in Brazil for 11 Days
Tesco Fixes Website Glitch That Disrupted Online Grocery Orders
Amnesty International Critiques UK's Predictive Policing Practices
Burglar Jailed After Falling into Home-Made Trap in Blyth
Sellafield Nuclear Site Exits Special Measures for Physical Security Amid Ongoing Cybersecurity Concerns
Avian Influenza Impact on Seals in Norfolk: Four Deaths Confirmed
First Arrest Under Scotland's Abortion Clinic Buffer Zone Law Amidst International Controversy
Meghan Markle Rebrands Lifestyle Venture as 'As Ever' Ahead of Netflix Series Launch
Inter-Island Ferry Services Between Guernsey and Jersey Set to Expand
Significant Proportion of Cancer Patients in England and Wales Not Receiving Recommended Treatments
Final Consultation Launched for Vyrnwy Frankton Power Line Project
Drug Misuse Deaths in Scotland Rise by 12% in 2023
Failed £100 Million Cocaine Smuggling Operation in the Scottish Highlands
Central Cee Equals MOBO Awards Record; Bashy and Ayra Starr Among Top Honorees
EastEnders: Four Decades of Challenging Social Norms
Jonathan Bailey Channels 'Succession' in Bold Richard II Performance
Northern Ireland's First Astronaut Engages in Rigorous Spacewalk Training
Former Postman Sentenced for Series of Sexual Offences in Northumberland
Record Surge in Anti-Muslim Hate Crimes Across the UK in 2024
Omagh Bombing Inquiry Concludes Commemorative Hearings with Survivor Testimonies
UK Government Introduces 'Ronan's Law' to Combat Online Knife Sales to Minors
Metal Detectorists Unearth 15th-Century Coin Hoard in Scottish Borders
Woman Charged in 1978 Death of Five-Year-Old Girl in South London
Expanding Sinkhole in Godstone, Surrey, Forces Evacuations and Road Closures
Bangor University Announces Plans to Cut 200 Jobs Amid £15 Million Savings Target
British Journalist Charlotte Peet Reported Missing in Brazil
UK Inflation Rises to 3% in January Amid Higher Food Prices and School Fees
Starmer Defends Zelensky Amidst Trump's 'Dictator' Allegation
Zelensky Calls on World Leaders to Back Peace Efforts in Light of Strains with Trump
UK Prime minister, Mr. Keir Starmer, has stated that any peace agreement aimed at ending the conflict in Ukraine "MUST" include a US security guarantee to deter Russian aggression
×