The Top 5 challenges for NHS staff looking for a mortgage

We love our NHS workers and recognise their incredible value to our society in the UK. This is especially true now, as our nation fights against an unprecedented epidemic. From front-line nurses to mental health staff, we know these are the people who sacrifice a great deal to keep our population safe and well. 

In recognition of their integral nature to the fabric of the UK, many companies offer special discounts and benefits to those employed by our National Health Service. 

This largesse, however, is not unilaterally forthcoming from the mortgage sector. In fact, in a time when financial and property security is paramount in people’s minds, some mortgage lenders make obtaining a mortgage with them very difficult if you work for the NHS. 

The challenges outlined below give some indication as to some of the issues which can rear their heads when NHS staff look for mortgages. 

Challenge 1- Income to mortgage ratio

Sadly, for many NHS employees, despite the crucial work they do, the renumeration packages that they receive are fairly paltry.  This combined with the typical mortgage deposit in the UK hovering around 15%, means NHS staff are far less likely to be able to afford putting down a deposit (much less afford the subsequent interest payments).  NHS staff need not despair, however. CrowdToLive® offers NHS employees a much more affordable way to get onto the property ladder.

CrowdToLive® ask NHS employees for a minimum of 5% of the full purchase price, making owning a home a much easier prospect. This is possible because the house is paid for in full, without a mortgage. Instead of taking out a mortgage, you will be connected with a pool of funding partners who help buy your home. 

Therefore, you will own a portion of the house and then pay rent on the remainder. What’s more you are free to purchase more of the house as your financial situation changes. In this way you can fully own your house without the looming restraint of a mortgage. 

Challenge 2 – Zero Hours contracts

Last year some 30,000 NHS employees were on zero-hours contracts. This type of employment contract is looked at unfavourably by mortgage lenders, as consistent income is not guaranteed, as employers do not need to issue regular hours. 

Being employed on one of these contracts does make you a high-risk candidate for a mortgage. However, there are ways of increasing your chance of being accepted. One of the ways you can do this for some lenders is to provide a larger deposit. However, it can prove more effective in the long run to pick a lender who has a tailored zero hours contract mortgage plan in their range of offerings. 

These offers do vary from lender to lender though. Lloyds Bank for example, as part of their assessment of sustainability, require that applicants have been working on a zero-hour contract for at least 12 months.

Getting a zero-hours mortgage still means taking on the debt of a mortgage and what’s more a high interest one, in order to eventually own your home. With  CrowdToLive®,  buyers are offered a debt-free solution to the problem of property ownership. Not having a mortgage means not having the huge burden of interest payments piling up at your door. Instead you pay rent instead of interest payment on the part of the house you don’t own, thus avoiding the bank’s capricious interest rates. 

Challenge 3 – NHS salary pension contributions

Contracts for nurses, doctors and ambulance drivers, as well as other NHS staff often have high pension contributions.  When calculating the amount that they will lend, banks or building societies will often look at the amount that you are putting towards your pension before they will provide an offer. 

From one perspective, it is always good to have a high percentage of your salary being put away for your non-working years. On the other hand, if you have no control over how much is extracted, like many NHS contracts, it can put off some lenders, as they can see that less of your available salary is earmarked for repayments.  

Beyond tightening expenses elsewhere or getting a raise in salary, it can be difficult to offset the pension contribution element of your mortgage valuation. 

CrowdToLive® on the other hand have no interest in how you contribute to your pension. All we require is an initial small deposit and rent payments on the part that you do not own.  This leaves your pension contribution untouched, meaning a happy retirement in your dream home. 

Challenge 4 – Income complexity

It is common for doctors, surgeons as well as a range of other NHS staff to supplement their basic salary with other sources of income. These sources include shift allowances, overtime and bonuses. Doctors and other staff that can offer it, also work outside their normal practice performing consultancy work for other companies or private clients. 

The complicated and multi-stream income that some NHS employees command can sometimes prove quite confusing for mortgage lenders and can lead to them being deterred from lending. Indeed, if a lender can’t see you fitting nicely into one of their plans, the work involved may discourage them from beginning the process. 

One option is to try to work with your broker over a protracted period of time, slowly explaining that you can afford a mortgage. This though is tedious and time consuming, not to mention incredibly frustrating. 

It is simpler to find a much more innovative and straightforward way to owning a house. With CrowdToLive® you do not work with one tired broker but are connected to a network of experienced advisors. They will guide you through the process and are more than happy to answer any questions you may have.  

Challenge 5 – Income and the Covid-19 pandemic

Although this is a factor which (hopefully) is temporary, in the here and now, the effects of Covid-19 have been serious in affecting NHS staff who are seeking to get on the housing ladder.  According to research conducted by Rentplus, 38% of all NHS and key workers say they have less money as a result of the pandemic, putting home ownership further out of reach.

This is making generating enough capital to put down a deposit increasingly arduous. This is especially true for people who already see most of their incomes disappear on high rent expenditure.

Not only have incomes taken a hit during the pandemic but house prices have (on the whole) retained their value too. Making the equation even more unpalatable than before. This understandably has left some NHS staff deflated about their mortgage and home ownership prospects. 

Because CrowdToLive® only requires a very small deposit, it means that even in these difficult times, NHS workers are able to begin the process of owning their own home. In fact the necessary minimum share you have to invest is 20% lower than the Shared Ownership scheme, making CrowdToLive® a much brighter option for those looking to own their own home. 

At CrowdToLive®, we believe that NHS staff shouldn’t be limited to the pains and burdens of a mortgage and instead should be able to aim higher with their expectations. Providing that you have never defaulted on payments, been declared bankrupt or received a CCJ, the CrowdToLive® platform is highly accessible to you. This means that NHS employees can achieve what they truly deserve – owning their dream home.