LandlordZONE has been shown paperwork that indicates leading mortgage provider NatWest has stopped approving buy-to-let or residential mortgages for anyone who took a Self-Employment Income Support Scheme (SEISS) grant.

This scheme is now closed but was a vital financial lifeline for many freelancers who had temporarily or permanently lost contracts during the Covid lockdown. The decision by NatWest shows that there will be consequences for landlords who took out Covid loans and grants when applying for mortgages.

The move by NatWest covers any freelancer including landlords who received an SEISS grant on or after July 14th, LandlordZONE understands.

Although the government has asked lenders not to downgrade the credit ratings of borrowers who have been in receipt of its various Covid loans during the pandemic, banks appear to be dodging this by building loan and grant decisions into their lending criteria.

NatWest tells LandlordZONE: “We look to understand an individual customer’s circumstances so we can lend responsively and within that we apply different maximum limits to different customer groups based on their individual risk profile.”

We asked leading buy-to-let mortgage broker Dan Lee (pictured) of Total Landlord Mortgages, to comment.

“It is a lender’s duty to assess affordability now and in the future and ultimately if you have taken help from the government be it grants, loans or payment holidays, this is a red flag to a lender that you have been negatively financially impacted by the effects of COVID,” he says.

“Ultimately lending has to be responsible and sustainable for the future.

“Potentially thousands of homebuyers and landlords looking to expand as well as wannabe landlords will not be able to access mortgages that were previously available.

“The question therefore arises how long will the effect of these grants, payment holidays or government loans have a negative impact? We will have to wait and see.”

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