Leeds introduces guarantor policy

In a first for the building society sector, Leeds BS is requiring guarantors on all 100 per cent mortgage applications.

The lender has said this will be judged on a case-by-case basis and could be revoked if a borrower was able to prove their finances had increased. It has also stated that the move was part of an in-house softening of prices, and not a reflection of the credit crunch.

The move has been welcomed as sensible by organisations who have questioned some lenders’ choices on lending criteria, particularly with fast-track and self-cert mortgages being put under the microscope.

Gary Brook, PR manager at Leeds BS, said: “We have carried out 100 per cent lending on full house purchase for a number of years and enhanced our lending criteria earlier this year to allow guarantors to act on 100 per cent mortgage applications.

“We believe that this niche provides access to the market for some first-time buyers, who may otherwise have been unable to purchase a property.”

Bernard Clarke, communications manager at the Council of Mortgage Lenders, said: “There is a range of choices that lenders offer in their approach to risk. With these, they ensure that they have choices to suit everyone.”