What is ONS data and how is it used by lenders?

At the end of each year, usually in December, the Office of National Statistics (ONS) produce ONS data in the form of a publication called Family Spending. The publication provides a wealth of information on a wide range of spending categories and is based on nationwide surveys carried out during the year.

The publication is made available for anyone to download and many mortgage lenders use ONS data as part of their lending decisions, specifically in relation to verifying loan affordability. For example, the customer’s declared household food expenditure can be checked against the ONS statistics. If the ONS number is lower, the lender may choose to take a ‘worst-case scenario’ approach and go with the higher value. 

The ONS data represents a particular sample of the population and includes information on the average household size and composition in each segment of the survey. In some cases, the data does not cater for every adult, so additional processing steps need to be introduced as part of the lending decision which scales the ONS data up or down depending on the case being considered.

The ONS data is on hand to be used in new and more advanced ways by lenders. As affordability calculations become more sophisticated and the rate of change increases, it is more important than ever to have the tools and expertise at hand to adapt and extend the logic easily.

For more information about how mortgage lenders use your data or to discuss your mortgage or remortgage, please get in touch.

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