Nottingham Building Society has updated its residential mortgage criteria to include state benefits, including universal credit, personal independence payment (PIP) and disability living allowance (DLA).
The move comes as part of changes to affordability assessments aimed at better reflecting modern income patterns.
The lender will now also accept agency and zero-hours income, as well as drawdown pension income.
Matt Kingston, sales director at Nottingham Building Society, said: “Too many borrowers still find themselves treated as edge cases, even when they have a clear track record of earning and managing their money responsibly.
“These changes are about recognising that real life doesn’t always present as a single fixed salary.”
Nottingham Building Society says the changes will benefit people with sustainable finances who do not sit within a fixed-salary framework.
Other updates this year include:
· Recognising confirmed future income such as pay rises and new roles.
· Simplifying routes for self-employed applicants.
· Increasing maximum loan-to-value on new-build flats to 85 per cent.
· Removing the loan-to-value cap on lending into retirement.
Kingston said: “If someone is doing the work, building income, and demonstrating resilience, our role is to assess that properly. That’s what good underwriting is for.
“We remain focused on widening access in practical ways, supporting brokers with the clarity and flexibility they need, while maintaining responsible lending standards.”