Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Gen H Revises Affordability Model to Boost New Build Borrowing
Gen H has updated its affordability modelling for new build homes, enabling buyers to borrow more by taking into account the typically lower energy bills associated with these properties. The lender states that new build homes are generally more energy efficient than older properties, which results in reduced monthly energy costs for buyers.
According to Gen H, its revised model now factors these energy savings into affordability calculations. This adjustment allows new build mortgage applicants to access higher borrowing limits compared to the standard model.
For example, Gen H reports that an applicant earning £50,000, with a £50,000 deposit and £300 per month in existing loan repayments, would see their maximum borrowing on a two- or three-year fixed mortgage increase from £249,600 to £253,800 under the new model.
This change is relevant for UK letting agents and inventory clerks as it may increase demand for new build properties, potentially affecting rental markets and property management workloads. The update reflects a growing recognition of energy efficiency in lending criteria for new build homes.
Source: Mortgage Strategy