Lenders deny discrimination against gay couples buying joint homes

THE days have now long gone when lenders discriminated against borrowers based on sex or marital status but still many people - and gay couples in particular - do not apply for joint mortgages.

All lenders now insist they simply look at the applicants' ability to repay. Martin Walshe, head of lending at EBS, says the only yardstick really worth looking at is the borrowers' ability to pay off the loan and how long that ability is likely to last. "One question a lender must ask is where is the repayment coming from."

In the past, it was assumed only married couples could be guaranteed to stay together and at that time they were the only people who could easily find a lender. But now, most lenders say non-married couples, gay couples or, indeed, simply friends are as likely to stay together as those in any other type of relationship.

An ICS spokeswoman says there is no difference between the way people are assessed and it is simply based on ability to repay. Under 3 per cent of ICS's first-time buyers are same-sex couples and the society has no idea what their relationship is to one another. The proportion of second-time and other buyers is far higher, although much of this would be made of consortia of investors.

But one difference for male gay couples is that they may be asked to do a HIV test to get insurance cover. But even the days of automatic exclusion from most life assurance books, at least at standard rates, is no longer as prevalent. But it is certainly still true that unmarried men are far more likely to get a lifestyle questionnaire than married men. But the life companies say they have changed their attitude to writing life policies for gay men as well as for people with HIV. According to Michael Kemp, chief executive of the Insurance Industry Federation, the proposal form now usually asks if the applicant has had treatment, is getting treatment or thinks they may have been exposed to a range of illnesses, including HIV and hepatitis.

However, he says because a couple is gay, it does not mean they have to tick the box which states they might have been exposed to HIV. But this is not commonly believed across the community. Karl Hayden, Out In the Open producer on Anna Livia 103.8 AM, says in most circumstances only one member of the couple applies for the mortgage and the other helps pay off the loan with both being tied in through a separate contract drawn up by a solicitor.

One way is to sign a trust deed which one partner can use to access the funds after the property is sold. However, one problem is that the Revenue could decide that this is a gift, in which case the proceeds could be liable for tax of up to 40 per cent, particularly if the two are so-called "strangers in blood".

The threshold in these circumstances is just £12,860, with the amount of tax owing increasing from 20 per cent to 40 per cent on everything above this. With many houses now selling for well over £100,000, these thresholds are commonly reached. Solicitors also say the Revenue is now tightening up on this and keeping track of the sale and purchase of all property through RSI numbers. Insurance companies will also ask some people to undergo an AIDS test. This is most frequently requested for single men and those taking out very large mortgages of over £500,000 in most cases.

ACCORDING to official figures from the Department of Health, some 41,355 people have been tested for insurance reasons since 1986 and of these just one tested positive. Mr Kemp also insists that some gay couples are written as normal risks. "Insurance companies are far more relaxed now than they were five years ago," he says.

But, as Mr Hayden points out, the life companies keep a register of all proposals which have either been turned down or have been offered at higher or non-standard rates and that register is available to all insurance companies. He says this is a considerable deterrent to many in the gay community.

"There is still a widespread fear that if they reveal they are gay, they will prejudice their mortgage or their insurance," he says.