Santander has laid out changes to its mortgage lending criteria ahead of the Brexit transition period ending on 31 December.
From 6 December, borrowers who are citizens of the European Economic Area (EEA) and applying for a mortgage over 75 per cent loan to value (LTV) will need to prove their permanent right to reside in the UK with the lender.
This rule excludes citizens from the republic of Ireland but will also apply to buy-to-let applications where income is required to meet the minimum £25,000 for eligibility purposes.
All residential and buy-to-let applicants must be a UK resident, although there are a few select scenarios where the lender will consider new lending to non-UK residents.
Pipeline applications made by 9pm on 5 December will not be affected by the changes, unless certain alterations are made to the case.
The lender said that from 6 December, substitute properties and re-submitted cases will not be treated as pipeline applications.
FCA reminds firms to be Brexit-ready
Santander’s changes come as the regulator urges firms to prepare for changes ahead of the end of the Brexit transition.
When the period ends at 11pm on 31 December, EU laws will no longer apply and passporting will end.
The Financial Conduct Authority (FCA) said firms should be aware that:
- The FCA is making use of the Temporary Transitional Power to provide them with more time to comply with a large number of the changes
- However, there are also key requirements that firms need to comply with by 1 January 2021
- Firms that intend to carry on providing services currently covered by a passport will need to ensure they will be able to do so after the end of the transition period
The FCA added that if a firm currently relies on a passport to provide services to or from the UK, and intends to withdraw those services at the end of the transition period, they are expected to ensure the right outcomes for their customers, with communications to enable them to make appropriate decisions.
Nausicaa Delfas, executive director of International at the FCA, said: “With just a month to go until the end of the transition period, firms need to make sure they are prepared for the end of passporting, and for the new financial services landscape after the end of the transition period.
‘To help minimise disruption, we have onshored EU legislation and established temporary regimes to allow non-UK firms and funds to operate in the UK after 31 December 2020.
“We remain committed to open markets, international co-operation and high international standards of regulation.”