Natwest is one of the most recognisable High Street banking brands, and is part of the Royal Bank of Scotland (RBS) group. Royal Bank of Scotland now channel most of their UK mortgage lending via the Natwest brand, due to the tarnished reputation of the RBS brand after the deepening credit crisis in 2008. Many contractors currently have business relationships with Natwest.
Are Natwest 'contractor-friendly'?
The Natwest brand of mortgage lending has never been one that has offered flexible income assessment for contractors, but the previous RBS brand did have a flexible offering via income referencing with bank statements and contracts for a period. This ended in 2008 when banks were looking to curb their lending.
Today, a Natwest contractor mortgage is assessed under either “employed” or “self-employed” criteria. If the individual is using any type of umbrella or payroll service, problems are very likely, as Natwest will revert to asking for evidence of employed earnings, which need to be proven via payslips or P60s.
If the individual is working via their own limited company, income is assessed via the latest two years trading figures, with an average of salary and dividend draw being used to define earnings. Accountant's references can also be provided in some cases instead of trading accounts, as can HMRC SA302 documents.
Would CMME recommend Natwest to contractors looking for a mortgage?
A lack of competitive rates at higher loan to value ratios, i.e. deposits of less than 25%, mean that this lender is rarely the first choice when looking at mortgage options. There are other lenders in the High Street who can better cater for those who are able to prove income in a conventional manner, and there are certainly better options for those contractors who need flexible criteria.