Key workers and mortgages

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 06. July 2022

Looking to speak to mortgage brokers about mortgages and key workers. 

Recent research from Vida Homeloans showed that nearly three quarters of key workers fear that they will never get on mortgage ladder as house prices continue to rise and cost of living continues to increase. 

  1. Have you had any cases recently with key workers and how did they progress? 
  2. Are there specific lender offerings aimed at key workers and how goo are they? 
  3. Should there be more key worker specific products?
  4. What should key worker borrowers keep in mind when applying for a mortgage/what advice would you give to key workers looking to buy?

5 responses from the Newspage community

There are many lenders now offering "Key Worker Mortgages" however we dont treat key workers any different to Joe Bloggs who works elsewhere. I am yet to struggle to place a key worker, in fact it is possibly easier as its usually regular income with a pension attached. The cost of living is hitting hard across all sectors, but the earlier someone engages a broker the easier the whole process will be for them.
A few lenders offer specific key worker products; often, it’s not the interest rate that’s different, it tends to be more about affordability. For example, Kensington mortgages offer mortgages for what they classed as heroes, NHS, police & fire service teachers etc where there is enhanced affordability allowing key workers the opportunity to purchase a higher value property and stretch their incomes further the most lenders would allow. However, in the main key workers have access to the same mortgage rules as everyone else. Mortgage options shouldn’t change, regardless of the job you do; positive discrimination is still discrimination.
Key workers are in the same boat as everyone else unfortunately and many struggle to achieve the borrowing amounts required to purchase suitable properties. There are a couple of lenders that have tried to support key workers by increasing the maximum loan to income multiple but this doesn't make a huge difference and those lenders tend to offer higher rates as well. Despite the fact working for the NHS is a very financially secure industry to work in, I recently had a client who started on a fixed term contract after finishing higher education but was only 9 months into the contract and because of that the majority of lenders wouldn't lend to him, which seems unfair in my opinion. There are however a few lenders such as Accord and Platform that have amended their criteria to accommodate this scenario.
Some lenders do offer slightly discounted mortgages for key workers. And there's the first homes scheme which offers a discount of up to 50% off a property. Some local authorities prioritise key workers for these discounts. But there's a limited amount of housing stock available for first homes. Given how important key workers are to the country, I don't know why the government don't heavily subsidise their mortgage rate. It could be a massive help with recruitment and keeping staff, and they could even vary the amount of subsidy depending on whether a geographical region is understaffed or not.
Whilst there are lenders such as Reliance Bank that offer reduced rates for key workers I think the biggest issue they face can often be around the fact that some lenders simply cannot understand their income. Many nurses (specifically bank nurses) might have very complex income structures and shift allowances. Doctors that do some NHS and some private work can also confuse some lenders. The biggest benefit to a key worker would be to have lenders that truly understand how their income works and use that income to give the best affordability they can to them.