BSOCS 2
Lending
BSOCS 2.1
Introduction
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BSOCS 2.1.1
See Notes
(1)
This chapter sets out
FSA
guidance on the management by societies of their lending, using the three approaches to lending set out in BSOCS 1, in order to enable them to comply with the requirements in SYSC 4 to SYSC 7. The chapter outlines factors the
FSA
will consider when assessing whether a society meets these requirements in relation to lending risk management.
(2) A list of the types of lending suitable for societies managing risk according to each of the three levels of lending risk management, together with appropriate controls, is set out in the tables at BSOCS 2.5.2 G and BSOCS 2.6.3 G.
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BSOCS 2.2
Risks of mortgage lending
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Affordability
BSOCS 2.2.1
See Notes
The primary risk associated with mortgage lending is that the borrower will be unable or unwilling to service the loan. In this respect, some types of mortgage will present greater risks than others. In particular, risks are likely to be increased for lenders (and in some cases also for consumers):
(1) where repayment commitments represent an unusually high percentage of disposable income; or
(2) where an unusually large proportion of the borrower's income is variable; or
(3) where the borrower has an impaired credit history.
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BSOCS 2.2.2
See Notes
Societies should ensure that they consider the risk profile of the different types of lending that they undertake, put sub-limits and other mitigating controls in place where they consider it appropriate and price their lending to reflect the perceived residual risks.
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BSOCS 2.2.3
See Notes
(1)
Societies should also consider when product features such as fixed mortgage rates expire and whether to set a maturity profile. If large numbers of mortgage loans revert to, for example, another base rate or a standard variable rate (SVR) simultaneously the society may experience operational strain dealing with the associated administration and customer queries.
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BSOCS 2.2.4
See Notes
Whilst non-sterling mortgages expose a society to foreign exchange risks (covered further within BSOCS 3 to BSOCS 5) as well as all other risks which normally attach to mortgage lending, it may also expose the borrower to exchange rate risk which, if it crystallises, impacts on their ability to afford the loan. Societies (other than those with the most sophisticated lending risk management controls) should therefore set very conservative limits for such business, and confine such loans to borrowers with income denominated in the relevant currency.
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BSOCS 2.2.5
See Notes
Societies must also comply with the general law and other regulatory requirements, including those in MCOB and the Principles for Businesses, relating to affordability and other aspects of granting a mortgage.
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Valuation of security
BSOCS 2.2.6
See Notes
If a mortgage fails to perform, a society ultimately relies upon the value of its security to safeguard its interests, so the reliability of the value is important. The integrity, competence and expertise of the valuer are important, particularly where experience in more complex valuation areas (for example, related to commercial lending) is needed.
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BSOCS 2.2.7
See Notes
In addition to general property price movements, significant local price variations can occur. Therefore lending outside a society's home area (or for larger societies lending on overseas property) can have an increased risk if local price drivers are not fully appreciated. Societies should consider this in setting their lending policy, balancing the potential risks against the advantages of lowering the concentration risk to which they might be exposed.
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Automatic valuation models (AVMs)
BSOCS 2.2.8
See Notes
If a society proposes to use an automatic valuation model (AVM), either as part of its loan origination process or subsequent revaluation for credit decision purposes, it should do so within the terms of clear and well-considered policies. In doing so it should note that, in the calculation of the credit risk capital component, in relation to risk weights assigned to exposures secured by mortgages on residential property, BIPRU 3.4.77 R requires that the "property shall be valued by an independent valuer at or less than market value" and that an independent valuer is defined in BIPRU 3.4.66 R as a "person who possesses the necessary qualifications, ability and experience to execute a valuation and who is independent from the credit decision process." This means that, for those purposes, the use of AVM output must always fall within a process leading to a valuation that can be ascribed to an independent valuer.
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BSOCS 2.2.9
See Notes
The society should also consider the limitations of AVMs before making a decision regarding whether an AVM is appropriate, particularly when the valuation plays an important role in the calculation of capital requirements. In determining a reasonable approach to AVMs a society should consider that:
(1) all AVMs have estimation errors;
(2) there are strengths and weaknesses of various AVMs. For example, many AVMs could be well suited to urban areas with many similar properties, but most will find it difficult accurately to value a property with little in common to those close by, for example in rural areas;
(3) AVMs should not be used to value non-domestic properties.
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BSOCS 2.2.10
See Notes
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BSOCS 2.2.11
See Notes
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BSOCS 2.2.12
See Notes
Statistical methods, such as house price indices or AVMs, can also be used to monitor the value of a property, identify property that needs revaluation and amend valuations assigned to a property. The detailed rules concerning monitoring of property values for the purposes of calculating the credit risk capital component are contained in BIPRU 3.4.66R to BIPRU 3.4.71G. If AVMs are used in this way, the principles of AVM use are the same as for loan origination and societies should consider the appropriateness of AVMs to obtain a prudent value.
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Non-traditional lending
BSOCS 2.2.13
See Notes
(1) Non-traditional lending can present additional risks, when compared with the more conventional prime owner-occupied lending model. Societies should recognise this within their risk assessment and management processes, procedures and lending policy.
(2)
BSOCS 2.2.14 G to BSOCS 2.2.21 G describe factors that societies should take into account in managing the risks associated with non-traditional lending; these are not exhaustive and not all points will be relevant to all societies.
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Sub-prime lending
BSOCS 2.2.14
See Notes
Whilst the risk of default on sub-prime owner-occupied lending is initially greater than that for prime (all other things being equal) the FSA recognises that sub-prime borrowers may demonstrate affordability over time. In these circumstances, the FSA is content for societies to reclassify seasoned sub-prime lending as prime after five years (at the LTV at origination), if they wish to do so.
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Buy-to-let
BSOCS 2.2.15
See Notes
(1) Whilst buy-to-let (BTL) lending is secured on residential property and therefore falls within the Building Societies Act nature limit (the statutory requirement that 75% of lending should be secured on residential property), it presents different risks to those of conventional residential mortgages to owner-occupiers.
(2) The
FSA
expects Boards and Management to recognise that existing experience and skills in residential mortgage lending do not simply transfer to buy-to-let and that the potentially significant differences in risk profile mean that different post-completion administration arrangements will be appropriate.
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BSOCS 2.2.16
See Notes
A society undertaking BTL lending should, when determining its risk appetite, have regard to the underlying commercial nature of this type of business. Relevant factors which societies should consider and address within their lending policy include:
(1) the degree to which the investor borrower is dependent on the cashflow performance of the investment property to service the loan;
(2) the basis on which the security is valued and rental income is assessed for underwriting purposes (including how rental voids are treated);
(3) what tenancy basis and kinds of BTL are acceptable;
(4) information required to assess the extent of the investor-borrower's broader exposure to the BTL sector (e.g. total number of properties in portfolio and whether encumbered or unencumbered);
(5) the maximum permitted exposure to an investor-borrower or connected investor-borrowers (which may be based on value and/or number of investment properties held); and
(6) what post-completion loan administration is required (and the extent to which this is appropriate and proportionate to the underlying commercial nature of BTL lending) including:
(a) monitoring of exposures on a scheduled basis (e.g. annual review);
(b) requirements for the investor-borrower to provide financial information on a periodic basis which enables the lender to have an appropriate understanding of their overall exposure.
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Equity release: Lifetime Mortgages and Home Reversion Plans
BSOCS 2.2.17
See Notes
(1)
Lifetime mortgages create a residential mortgage exposure (and fall within the nature limit) and also carry a morbidity risk associated with the potential deterioration of health of the borrower. In addition, those with interest roll-up features carry a mortality risk associated with the longevity of the loan, so their risks differ from conventional lending risks. Because of these risk characteristics the
FSA
would not expect limited approach societies to offer such products where any applicant is under 65, nor to extend loans greater than 25% LTV for borrowers of 65. If they wish to offer larger LTV advances to older borrowers they should ensure that they have appropriate actuarial expertise to enable them to assess the associated risks.
(2)
Home reversion plans are likely to carry even more complex risks, since they not only have an actuarial risk but also expose lenders directly to variations in the market value of the property with which the individual plan is associated. As such, societies should enter those markets only if they have more sophisticated lending management control structures. In these circumstances, societies should set very conservative limits on the amount of such business that can be done.
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Commercial lending
BSOCS 2.2.18
See Notes
(1) Commercial property may require different valuation skills to domestic property, and historically has a higher default rate than conventional owner-occupied lending. It may or may not fall within the nature limits, depending on whether the business of the commercial enterprise is to provide residential property.
(2) Commercial lending can be divided into three broad types, owner occupied, commercial developments and investments. Each of these broad types typically has different associated risk profiles and is likely to require different risk management capabilities.
(3) Societies on different lending approaches are likely to have different risk management capabilities with respect to the three types. Societies on the traditional approach should restrict themselves to owner-occupied commercial lending. The FSA would expect that societies on the limited approach might have the risk management capabilities to undertake small scale residential development (ten properties or less) or small scale commercial investments.
(4) Commercial lending may be "lumpy" in character, particularly that falling into the commercial investments category. When considering the risks associated with any commercial lending, societies should be mindful of the absolute size of individual loans, their absolute total exposure to commercial lending and the extent to which they are exposed to concentration risk, whether geographic concentration, concentration to particular counterparties or particular sectors of the economy.
(5) Societies should also be mindful of the additional complexity that may attach where commercial property is owned by a special purpose vehicle or where it is financed by a syndicated loan. Societies on either the traditional or limited approach should not undertake any syndicated lending.
(6) Societies should also ensure that when undertaking commercial lending they establish that a realistic alternative use exists for the property, in case they later have to enforce the security.
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Social landlords (including Registered Social Landlords)
BSOCS 2.2.19
See Notes
(1) Lending to housing associations can be difficult to evaluate and for smaller societies these can represent significant sized loans. Whilst loans may be low LTV, the saleability of underlying properties varies and would usually not be with vacant possession. As such, societies considering such lending should consider not only the portfolio valuation but also the financial management record of the landlord, including arrears management and losses through voids. The skills necessary to undertake such assessments are those of underwriting commercial lending rather than residential lending, combined with a good understanding of the sector and its risk profile.
(2) As such, societies should ensure that they have appropriate underwriting skills for this type of lending and that they set a maximum proportion of their lending book for these loans, to ensure that they retain a balanced portfolio.
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Shared ownership lending
BSOCS 2.2.20
See Notes
Shared ownership lending can be more complex than mainstream mortgage lending. Societies will need to assess the borrower's ability to afford the loan, which may be more complicated than for traditional lending. In addition, the value of collateral may be affected by conditions imposed by the social landlord on resale, for example to market the property only to those groups identified as a priority by the local authority. Also, administering such lending is likely to be more resource-intensive than conventional lending, since the mortgage agreement is three-way and relationships with both the borrower and social landlord need to be maintained. Particular matters that societies should consider include (but are not necessarily restricted to) the following.
(1) In the event of default, if monies raised by repossession and sale of the share purchase are insufficient to cover the debt the society has protections allowing it to recoup certain losses from the social landlord's share of the property so long as they have complied with required procedures at the time of extending the original and any subsequent amounts, and before taking action for arrears. Societies should ensure that they understand what protection is available and have procedures to ensure compliance with procedural requirements.
(2) Security is held over the leasehold on the owned portion of the property, not the freehold. If the borrower fails to pay rent to the social landlord, the lease may be terminated by the landlord; if terminated then security for the loan would be lost. Whilst a social landlord must inform a society and give it time to remedy the breach to retain the security (costs recoverable under the mortgage protection scheme) societies should consider how they will manage such risk situations and decide as a matter of policy which if any costs they will consider paying.
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BSOCS 2.2.21
See Notes
Given the added complexity and costs of administering such lending, societies should set a maximum proportion of their lending book for such loans, to ensure that they retain a balanced portfolio.
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BSOCS 2.3
Board and management responsibilities
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BSOCS 2.3.1
See Notes
To comply with SYSC 4.1.1 R and SYSC 7.1.2 R, societies should have a lending policy. This should be agreed and formally approved by the board and be consistent with the society's strategic plan and its financial risk management policy statement.
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BSOCS 2.3.2
See Notes
The board and management should take steps to ensure that staff involved in all aspects of lending are aware of the lending policy, both on an ongoing basis and particularly where the lending policy has been changed. What steps would be most appropriate to achieve this will depend on the number of staff concerned and the complexity of the lending policy.
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BSOCS 2.3.3
See Notes
To comply with SYSC 4.1.10R (Regular monitoring), societies should check, on a regular basis, that staff are complying with this lending policy.
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BSOCS 2.4
Lending policy
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BSOCS 2.4.1
See Notes
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Contents of policy
BSOCS 2.4.2
See Notes
The introduction section should include:
(1) background to the society's approach to the management of credit risk, including its high-level lending strategy and its risk appetite expressed in a clear and numeric way that can be easily understood by all staff;
(2) ratification process for obtaining board approval, including amendments to the policy statement as well as complete revisions; and
(3) arrangements for, and frequency of, review (which should be conducted at least on an annual basis).
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BSOCS 2.4.3
See Notes
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BSOCS 2.4.4
See Notes
The policy should set out the society's business and operational characteristics, including:
(1) board controls and organisational structure/reporting lines;
(2) high level framework for ensuring compliance with MCOB and other regulatory requirements;
(3) delegation process and authorities;
(4) new product development process and approved sources of new lending business;
(5) marketing and administration controls; and
(6) processes for ensuring compliance with policy (including arrangements for internal audit review etc).
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BSOCS 2.4.5
See Notes
The risk management section should include a description of:
(1) the risk management structure and reporting lines;
(2) controls over underwriting quality and adherence to delegated limits;
(3) how risks associated with untypical cash flow characteristics (including interest roll-up and payment holidays) are to be managed;
(4) training and competence requirements for underwriters and mortgage sales staff;
(5) the process for developing internal risk scoring systems and procedures for risk categorisation including monitoring of manual overrides;
(6) large exposure limits for connected counterparties, by loan and borrower type;
(7) exposure limits for individual portfolios, including BTL portfolios;
(8) concentration risk exposure limits by product type, borrower type, security type, introducer and geographical area (expressed both in terms of the overall lending book and as a proportion of new lending in a given period);
(9) limits on the acquisition of individual loans or portfolios of loans, either by way of sub-participation or syndication;
(10) the processes for ensuring how the success of risk management is to be assessed and potential lessons captured and used to amend underwriting policy as necessary; and
(11) the management information to be reported to the board.
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BSOCS 2.4.6
See Notes
The lending permitted section should include details of the lending which the society intends to undertake by borrower and property/security type and origination source, including (as applicable):
(1) prime residential mortgage lending to individuals;
(2) near/sub-prime residential mortgage lending to individuals;
(3) buy-to-let mortgage lending to individuals and corporate bodies;
(4) shared-ownership residential lending to individuals;
(5) second-charge residential lending to individuals;
(6)
lifetime mortgage lending to individuals;
(7)
home reversion plans for individuals;
(8) commercial mortgages for owner-occupiers;
(9) commercial mortgages for investors (both individuals and corporate bodies);
(10) commercial property development loans, both on residential and commercial real estate;
(11) lending to registered social landlords; and
(12)
unsecured lending to individuals (by way of personal loan, overdraft, credit card or otherwise).
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BSOCS 2.4.7
See Notes
The policy should also set out the acceptable types of security, including:
(1) which types of security are acceptable (title, tenure, construction, location etc);
(2) the maximum original loan to value ratio permitted for each lending type;
(3) requirements for additional security such as guarantees, charges over other assets, life cover, accident/sickness/unemployment cover or for additional credit insurance (mortgage indemnity guarantee or similar) (including procedures for checking that such cover can be relied upon and is effective and checking the credit worthiness of the provider);
(4) requirements for buildings insurance cover; and
(5) arrangements for obtaining a reliable security valuation (including procedures for appointing valuers, use of automated valuation models).
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BSOCS 2.4.8
See Notes
The underwriting requirements for each type of loan should be specified in the policy, including:
(1) minimum required levels of income (or rent) to confirm affordability of the loan for the borrower (including at higher rates of interest);
(2) information requirements for verifying stated income/outgoings levels (for both individuals and corporate borrowers);
(3) credit checks, credit scoring requirements, manual override flexibility arrangements;
(4) requirements for face-to-face interviews, site visits, use of specialist advisers;
(5) evidential requirements to establish the previous track record of the borrower; and
(6) any requirements for third party references.
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BSOCS 2.4.9
See Notes
The policy should set out the basis for pricing new lending, including:
(1) the required hurdle rate of return for new lending products;
(2) requirements for adjusting pricing to reflect risk;
(3) the approach to setting fees, routine charges and early repayment charges, etc; and
(4) the methodology for setting and collecting early repayment charges.
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BSOCS 2.4.10
See Notes
The policy should be consistent with the provisions relating to conduct of business that apply to the society under the Handbook and the general law, including those in MCOB and the Unfair Terms Regulations.
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Lending approach
BSOCS 2.4.11
See Notes
Having developed its lending policy statement, each society will be able to classify itself against one of the approaches set out in the table in BSOCS 2.5.1G and assess its lending types and lending limits against the guidance in BSOCS 2.6.1 G.
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BSOCS 2.5
Lending risk management structures
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BSOCS 2.5.1
See Notes
The table in BSOCS 2.5.2 G describes the type of controls that the management of societies should put in place (and where appropriate clearly document within their lending policy documentation) in each of the three lending models to manage lending risk.
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BSOCS 2.5.2
See Notes
This table belongs to BSOCS 2.5.1G. It sets out guidance on credit risk management processes and procedures in accordance with the three lending approaches referred to in BSOCS 1.1.2 G and dealt with in detail at BSOCS 1.11 to 1.14. It shows the criteria which societies should use in assessing the controls over their lending book, as detailed in BSOCS 1.15. It is designed to draw management and supervisory attention to areas of a society's credit risk management which are different from the FSA's general expectation for societies on their respective lending approach. Societies should expect their supervisors to focus in greater detail on those areas of difference, to identify whether business risks and controls are aligned and if not to develop plans to address the mis-alignment. As such, these expectations should not be interpreted as hard limits but as input into establishing appropriate policies and the basis for supervisory dialogue
| Traditional | Limited | Mitigated | |
| Asset characteristics - high level | Mainly restricted to high quality lending to individuals, secured on residential property for owner-occupation purposes:
• LTV <= 80% or with external insurance cover on higher LTV exposures or other recognised collateral • Fully underwritten • Restricted affordability criteria
|
A minimum of 50% of total loan assets to comprise high quality lending to individuals, secured on residential property for owner-occupation purposes:
• LTV <= 80% or with external insurance cover on higher LTV exposures or other recognised collateral • Fully underwritten • Restricted affordability criteria
Other lending controlled through structure of board-approved limits set at levels comfortably within statutory maxima. |
Exposures to non-traditional lending allowed up to statutory maxima but controlled through: |
| Lending policy statement | Approved by board and reviewed at least annually | ||
| Pricing model | Board to set clear hurdle return on new lending and articulate this through key operational plans Clear delegated responsibility for monitoring actual return achieved v hurdle on regular periodic basis |
Board or appropriate committee to set clear hurdle return required on loan book as minimum approach - use of economic capital and risk-based return modelling encouraged | |
| Risk appetite statement | Approved by board at least annually Reviewed to consider continued applicability at least semi-annually |
Approved by board at least annually Reviewed to consider continued applicability quarterly |
Approved by board or credit risk committee (or similar) at least annually Reviewed to consider continued applicability at least quarterly |
| Risk management structure | If no dedicated risk management function, CEO/FD will fulfil this role | Risk management function (fully independent of lending and sales functions) reporting direct to CEO | Head of Risk function (senior executive) supported by risk management team, reporting to credit risk committee (or similar) |
| Loan exposure restrictions | Lending policy restricts exposure to connected counterparties to <= 10% of capital resources | Lending policy restricts exposure to connected counterparties absolutely to <= 15% of capital resources | Lending policy does not restrict exposures within statutory or regulatory limits |
| Underwriting | Cases fully underwritten on an individual basis Limited delegation under mandates Board to approve all loans where aggregate exposure to borrower and/or connected clients => 2.5% of capital resources |
Independent underwriting function Cases underwritten individually or systematically credit scored Hierarchy of fully delegated mandates (with exception reporting to senior management) Appropriate specialist expertise for all categories of non-residential lending May use specialist anti-fraud systems |
Independent underwriting function Cases systematically credit scored (with manual over-ride where appropriate) Hierarchy of fully delegated mandates PD/LGD modelling Portfolio underwriting Appropriate specialist expertise for all categories of non-residential lending Use specialist anti-fraud systems |
| Risk mitigation | Risks mitigated by combination of: • conservative LTV or external insurance on exposures > 80% LTV • other recognised collateral • restricted affordability criteria
|
Risks mitigated by combination of: • conservative LTV or external insurance on exposures > 80% LTV • other recognised collateral • stop-loss/excess of loss insurance
|
Risks mitigated by combination of: • external insurance (where used) • other recognised collateral • stop-loss/excess of loss insurance (or similar) at pool or portfolio level • credit default swaps • loan book sales
|
| Valuations | Undertaken by independent valuer AVMs within parameters recorded in policy statement |
Undertaken by external or staff valuer AVMs within parameters recorded in policy statement |
Undertaken by external or staff valuer AVMs within parameters recorded in policy statement |
| Segregation of duty between: | |||
| Underwriting function and mortgage sales function (providing "four-eyes" check over lending) | Segregation at executive manager level | Segregation at an operational level | Full segregation |
| Underwriting function and the lending review/audit/ compliance functions which check (1) compliance with underwriting and fraud policy and legislation; and (2) lending/ underwriting quality (by review of MI, live fraud cases, bad debt cases etc).
|
Segregation at executive manager level | Segregation at an operational level | Full segregation |
| Stress testing | Simple stress testing (changes in security values based on appropriate HPI movements) undertaken on annual basis, or more frequently if market conditions warrant | Stress testing and scenario analysis (at level of individual asset pools) on semi-annual basis | Econometric analysis and full stress testing/scenario analysis on at least quarterly basis |
| In this table: AVMs = automated valuation models HPI = house price index LTV = loan to value |
Other recognised collateral = charge over acceptable assets, 3rd party guarantees etc | ||
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BSOCS 2.6
Lending types and lending limits
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BSOCS 2.6.1
See Notes
Given the lending risk management controls and processes set out in the table at BSOCS 2.5.2 G, the lending limits which societies following one of the three lending models have in their lending policy should resemble the table in BSOCS 2.6.3 G.
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BSOCS 2.6.2
See Notes
If a society plans to become exposed to mortgages of sub-types not covered in the table in BSOCS 2.6.3 G, they should speak to their supervisor before entering the market, and again if their exposure reaches an agreed threshold to be set by the supervisor based on the perceived risk characteristics of the sub-type.
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BSOCS 2.6.3
See Notes
This table belongs to BSOCS 2.6.1 G. It sets out the criteria which societies should use in assessing the controls over their lending book, as detailed in BSOCS 1.15. It is designed to draw management and supervisory attention to areas of a society's business model which are different from the FSA's general expectation for societies on their lending approach. Societies should expect their supervisors to focus in greater detail on those areas of difference, to identify whether business risks and controls are aligned and if not to develop plans to address the mis-alignment. As such, these expectations should not be interpreted as hard limits but as input into establishing appropriate policies and the basis for supervisory dialogue.
| Lending types | Normal loan to value at origination and other limits applying | Asset limits | ||
| as % total loan book | as lending in rolling 12 month period | |||
| Traditional | Prime owner-occupier | <= 80% LTV, or >80% to 95% LTV with external insurance | Min 85% | Min 80% |
| > 80% to <= 90% LTV without external insurance | Max 7.5% | Max 10% | ||
| Prime Buy to Let | <= 70% LTV (min rental cover 130%, calculated assuming no void periods) | Max 15% | Max 20% | |
| Shared ownership | <= 90% of share purchased by borrower | Max 10% | Max 15% | |
| Social Landlords | <= 80% | Max 7.5% | Max 7.5% | |
| Commercial/FSOL | <= 50% | Max 5% | Max 10% | |
| Limited | Prime owner-occupier | In total of which: |
Min 65% | Min 55% |
| <= 80% LTV, or >80% to 100% LTV with external insurance | Min 55% | Min 40% | ||
| > 80% to <= 95% LTV without external insurance | Max 10% | Max 15% | ||
| Prime Buy-to-Let | In total (min rental cover 125%, calculated assuming no void periods) Of which no lending > 80% LTV and |
Max 25% | ||
| LTV between 60% and 80% | Max 20% | Max 20% | ||
| Impaired credit history (all types) | <= 70% | Max 10% | Max 10% | |
| Lifetime mortgages | <= 25% (min age of youngest applicant => 65) | Max 10% | Max 15% | |
| Shared ownership | <= 95% of share purchased by borrower | Max 15% | Max 20% | |
| Social Landlords | <= 80% | Max 15% | Max 15% | |
| Commercial/FSOL | <= 60% | Max 10% | Max 15% | |
| Non-sterling mortgages | Only permitted where borrower also has income in relevant currency | Max 5% | Max 5% | |
| Mitigated | Any lending permitted subject to statutory constraints and to lending policy set by management. | |||
| In this table: FSOL = fully secured on land Shared ownership = part-owned by the occupier and part by a social housing provider. This does not include shared equity arrangements where the society takes part of the equity interest. LTV is based at loan to value at origination and should be calculated after taking into account any alternative recognised collateral. |
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