When Rod Elston, a retired Baptist minister, tried to remortgage with his high street lender, his request was met with a definitive “no”.
Despite having been a customer with the mortgage provider for more than 15 years, Elston, 72, and his wife Susan, 70, were not offered the deal they wanted because of their ages.
“I was annoyed,” said Elston, who worked as a minister in north Devon and Peterborough. “It was a case of ‘rules are rules, and we cannot make exceptions’.”
The couple, who live in a two-bedroom flat in Exmouth, Devon, found a solution with the Family building society.
The small lender, which is run from a picture-perfect Georgian house in Epsom, Surrey, can apply a traditional individual underwriting approach — not the automated, one-size-fits-all policy common to high-street lenders. It also has no age limits.
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Elston secured a 1.9% deal with the building society, which will run until he is 87.
The introduction of stricter mortgage lending rules in recent years has led to a rise in such specialist lenders offering niche mortgages.
Older borrowers are not the only ones affected by stringent rules.“The credit crisis saw a rapid tightening of lending criteria, and the introduction of new regulation formalised this tougher approach,” said David Hollingworth of the mortgage broker London & Country.
This means specialist mortgages are thriving, according to Adrian Anderson of Anderson Harris, another broker. There is now a wide range of deals aimed at specific groups of people, some of them rather quirky.
Struggling to get a loan on your windmill? Holmesdale building society, based in Reigate, Surrey, has a mortgage designed for unusual homes such as old windmills and Martello towers. It promises to look at applications on an individual basis, so homeowners who would otherwise fall foul of “computer says no” have a better chance of getting a mortgage.
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Other lenders offer loans catering for certain “qualified” professionals — step forward vets, barristers and dentists.
Metro bank has a mortgage available only to “fully qualified” barristers, doctors, solicitors, accountants and actuaries. It can lend at a generous multiple of 5.5 times salary. Mainstream lenders typically use a 4.5 or 4.75 income multiple for first-time buyers and 5 for remortgagers, said Aaron Strutt of broker Trinity Financial.
Scottish Widows has a similarly exclusive mortgage, which is also open to vets and dentists. These deals come with preferential rates, such as 1.54% for a two-year fix that requires a 40% deposit and a £1,499 fee.
“A professional person such as a solicitor may benefit from one of these mortgages rather than a standard deal because they may get higher loan-to-values and more lenient requirements,” said Anderson.
Teachers are catered for by their very own lender — Teachers building society — which “understands the teaching profession and can demonstrate flexibility that a standard lender may not”, said Hollingworth. “It could offer help for a newly qualified teacher who has yet to take up their post, for example.”
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Barclays can offer flexibility for armed forces personnel. For example, if someone is deployed on operations (in the UK or abroad), the bank allows them to let their property without having to switch to a buy-to-let mortgage, as it would require for other borrowers.
In addition, Barclays can waive its usual requirement of two years’ proof of address and accept British Forces Post Office addresses instead.
The bank supports the government-backed Forces Help to Buy scheme, which lets servicemen and women borrow a sum of up to 50% of their salary to use as a deposit on a home.
What if you are recently divorced, and your finances are tangled? Market Harborough building society has a special “divorce” mortgage that factors in money you will get from the eventual sale of your marital home, even if it hasn’t happened yet.
Ipswich building society will take into account the full amount of court-ordered child maintenance payments, in addition to employment income, for divorced parents.
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The self-employed, classed as “complex” cases, can struggle to get a mortgage. Even though official statistics show 4.81m of us now work for ourselves, amounting to 15% of the workforce, big-name lenders often have tough requirements that many self-employed people fail to meet.
“Self-employed borrowers can have an issue when it comes to getting a mortgage, particularly if you are new to self-employment,” said Mark Harris of the mortgage broker SPF Private Clients. He says Precise Mortgages, Kensington Mortgages and regional building societies offer the best options.
This month, Newcastle building society launched a mortgage for the self-employed requiring only one year’s accounts. The deal is a competitive 2.2% two-year fix. However, as with many of these specialist deals, it requires a hefty 40% deposit — a box many, regardless of employment status, would struggle to tick.