শুক্রবার, ১৩ ডিসেম্বর ২০২৪, ০৪:৪৪

Pregnant women unfairly denied mortgages over child costs

Pregnant women unfairly denied mortgages over child costs

 

 

Banks are unfairly blocking mortgage applications made by pregnant women or couples planning on staring a family, Britain’s most senior complaints official has said.

Caroline Wayman, the chief executive of the financial ombudsman service, said young families faced “blanket assumptions” that they could not be trusted to keep up mortgage repayments after they had children.

She said a rising number of women had made formal complaints about discrimination. Evidence is also beginning to emerge that young couples applying for mortgages are concealing pregnancies or family plans in case lenders decide their incomes would become too stretched.

Mrs Wayman’s comments come as regulators initiate an inquiry exploring whether lenders have exploited new “affordability” rules to block mortgage applications from responsible borrowers.

“It is not fair to just make blanket assumptions about people, based on certain characteristics – age or maternity,” she told The Sunday Times. “It certainly wouldn’t be fair just to say, because you I think you’re pregnant, I can’t lend to you.” 

Since the so-called mortgage market review (MMR) was introduced last April, lenders have been required to undertake more thorough checks of customers’ incomes to ensure the repayments are affordable.

Under the stress tests, applicants are asked detailed questions about their lifestyles, including how much they spend on eating out, holidays and childcare.

The new rules were supposed to prevent a repeat of the 2008 financial crisis but critics have accused banks of adopting a “computer says no” style approach to lending.

Older borrowers and those on interest-only loans complain that they are being turned away from loans despite impeccable repayment records and sufficient money to maintain the mortgage.

Mrs Wayman’s comments are the first official acknowledgement that lenders are also making it difficult for pregnant women – and their partners – to get on to or move up the property ladder.

The Financial Conduct Authority, the financial regulator, is monitoring the impact of its new affordability rules and is this summer understood to be visiting banks and asking for copies of the paperwork for mortgage rejections.

It could issue new guidelines if it finds lenders have used the new rules wrongly to reject applicants.

David Hollingworth, of mortgage broker London & Country, said: “Lenders now put much greater focus on things such as family plans and the impact that maternity leave and childcare costs might have on someone’s budget.

“They are most interested if someone is well on their way with a pregnancy, and less interested in plans to have children in three years time, for example.”

He said it was “understandable” that people became frustrated, but added that there were “two sides to the coin”.

“The whole reason for these new rules is to make sure people can afford their mortgages tomorrow, not just today, and many lenders will take into account plans to return to work,” he said. 




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