To be honest, it’s difficult to say at this stage.
At the time of writing, some lenders have confirmed they will accept it, whereas others have confirmed they won’t.
Moving forward, our feeling is that given the unprecedented circumstances, lenders will take a compassionate and common sense point of view, but only time will tell.
Lenders will probably look more favourably on PAYE employees (as always tends to be the case). If they are aware of furlough income, they may look more closely at the occupation / industry as well as a person’s credit search/score and loan to value before making a decision.
For Business Owners who have furloughed staff, if a lender is made aware of this, in addition to the above they may also want extra reassurances around profitability and sustainability. Again, Lenders may approach Accountants for their professional opinion on this.
In summary, although Furloughing can be viewed be a positive thing for sustaining both small businesses and therefore employment, how lenders will view this in the future is unknown.
We believe that as things improve, lenders will take a common sense and compassionate approach. However, if not, what we do know is that one of the great things about the UK mortgage market is choice. There will always be lenders who take a common sense approach and lend to good borrowers. During tougher times, you just have to work a little harder to find them.
If you have any questions that this blog may have got you thinking about, just drop us an email or call. We’re here to help.