Skipton are the 4th largest building society in the country, and one of the oldest “mutual” building societies in the UK today. Skipton have traditionally been very good at fulfilling “niche” lending for mortgage applicants in addition to their core residential lending, such as buy to let and self-build projects.
Like most lenders, they have been reactive to what their competitors have been offering and have scaled back on flexible lending criteria since the onset of the credit crisis in 2008.
They are much more flexible than a lot of their competitors, but not quite in the “contractor friendly” category of lenders like Clydesdale Bank, Virgin Money and Halifax. Working on the contract value to define income can be an option in some cases.
Any individual looking to use their gross contract value to define income must have been contracting for at least two years, and have a minimum contract term of 6 months from outset on the existing contract. Half of this contract term must be unexpired as a minimum at point of application, or evidence of an extension is required. This can get around situations where the salary and dividend draw is minimal for tax purposes. Any agreement to proceed on this basis must be obtained directly from an underwriter, and we have direct communication channels with these individuals at head office.
At CMME, we have been using Skipton more and more in recent months, as they recognise that contractors do not necessarily present a higher risk. Their rates are competitive, and lending criteria is reasonably flexible. We are working with our contacts at the bank to get this lender into the same flexible category as traditional supporters of flexible underwriting of contractor income.