Nationwide blocking gifted deposits?

Vestraun

Has anyone come across or got more information on this? I think this will massively affect a lot of ftbs. 

https://www.dailymail.co.uk/news/article-8584933/Nationwide-cracks-mortgage-borrowers-relying-parents-deposit.html

LRmortgage

Nationwide have been very clear on this piece of criteria and it only applies to the recently launched 90% LTV products. 

leodis23

From here > https://www.nationwide-intermediary.co.uk/news/2020/July/90-ltv

No fully gifted deposits (maximum gift of 25% of the deposit amount)*

I had a mild panic when I saw it, as my broker never mentioned it, but my dad loaned me 20.5% towards my deposit.

davidmcn

leodis23 said:

I had a mild panic when I saw it, as my broker never mentioned it, but my dad loaned me 20.5% towards my deposit.

Loans wouldn't be accepted at all. It needs to be a no-strings-attached gift.

Chilli6

leodis23 said:

From here > https://www.nationwide-intermediary.co.uk/news/2020/July/90-ltv

No fully gifted deposits (maximum gift of 25% of the deposit amount)*

I had a mild panic when I saw it, as my broker never mentioned it, but my dad loaned me 20.5% towards my deposit.

As LRmortgage says, it's only on 90% LTV products too.
I had a gift of 30% however my LTV is 30% so it's been approved. 

silvercar

I wonder how they verify deposit sources. eg if parents have been drip feeding into a savings account in offspring's name for years will this show as a gifted deposit or as savings?

leodis23

davidmcn said:

leodis23 said:

I had a mild panic when I saw it, as my broker never mentioned it, but my dad loaned me 20.5% towards my deposit.

Loans wouldn't be accepted at all. It needs to be a no-strings-attached gift.

As far as him and my solicitor are concerned (and NW too I guess) it's a no-strings gift, however I hate being gifted money so I'll be spending the next few years slipping wads of £50s into his birthday and Christmas cards.

Mickey666

Obviously lenders can impose whatever conditions they want, but what is the actual point of requiring borrowers NOT to rely on a gifted deposit?  I can’t see there is any risk to the lender, so presumably am missing something here.
So what if the deposit is a gift?

Chilli6

Mickey666 said:

Obviously lenders can impose whatever conditions they want, but what is the actual point of requiring borrowers NOT to rely on a gifted deposit?  I can’t see there is any risk to the lender, so presumably am missing something here.
So what if the deposit is a gift?

I feel the same. If someone meets the criteria with regards to salary and credit history then surely the risk is low?
Saving a good deposit does show good money management but I feel this isn't fair for those that aren't living rent free with mum and dad and are regularly paying rent and bills

davidmcn

Mickey666 said:

Obviously lenders can impose whatever conditions they want, but what is the actual point of requiring borrowers NOT to rely on a gifted deposit?  I can’t see there is any risk to the lender, so presumably am missing something here.
So what if the deposit is a gift?

I guess borrowers who can demonstrate they have enough financial discipline to have accumulated their own funds are viewed as less of a risk.

Mickey666

Perhaps that’s their reasoning, though Chilli6 makes a good point -  if borrowers are living rent-free with mum and dad, how does that predict anything about their financial discipline?  Rent-free living is pretty much the same as a gift isn’t it?
Besides, don’t lenders manage their risk by controlling the LTV?  So even if their borrower defaults, they are still not going to lose anything are they?