Legal and General Retail reshuffles executive team

Legal and General Retail reshuffles executive team

The retail division at Legal and General covers its pensions, retirement, mortgages and protection business. 

Craig Brown, currently chief executive of home finance, has been made chief operating officer (COO) of the retail division. 

Brown joined Legal and General in 2012 and has held several roles including director, intermediary and key account director. He will be responsible for operations across retail protection, annuities, workplace savings and home finance. 

Lorna Shah, managing director for retail retirement, will now also lead the home finance department alongside her existing duty of leading the annuities business. 

She has worked for the company for 20 years, and was previously CFO of Legal and General Retail Retirement. She was also a member of the home finance board. 

Shah will see the home finance division through its plan to transition later life mortgages into mainstream retirement planning, as well as encourage integration between the annuities and home finance businesses. 

Paula Llewellyn, retail chief marketing officer and direct managing director, will take on the additional responsibility of driving the strategy of the retail division. 

Bernie Hickman, chief executive of Legal and General Retail, said: “As a leading provider of savings, protection, and retirement products, we remain focused on helping our customers manage their assets and income to achieve their life goals, whether that is helping to protect their income when life gets tough, grow their savings to enjoy retirement or accessing housing equity to supplement retirement savings. Joining up our businesses to create a single customer service and engagement platform is a key part of our customer-centric vision for the retail division.

“The changes I have announced today set us up to accelerate the growth of our business and deliver the best outcomes for our retail customers, helping them navigate through challenging economic times and providing them with peace of mind that they are being looked after by a trusted brand.” 

Gove warns Mayor Khan that housebuilding plan is ‘letting down’ Londoners

Gove warns Mayor Khan that housebuilding plan is ‘letting down’ Londoners

Gove wrote to Khan with concerns that the London Plan was restricting housebuilding and asked him to review the plan, which lays out how homes in the capital will be delivered. 

The housebuilding plan review is expected to focus on the use of industrial land in London and potential areas of opportunity. 

Gove said 736 hectares of land could be turned into housing developments in London, but were held up by planning that developers described as “too restrictive”. 

He also said there were 47 areas in London that could deliver at least 2,500 homes, 5,000 jobs, or a combination of both, but no progress had been made. 

Khan has been asked to make sure these areas are targeted and consider any policies that could be holding development back. The mayor has also been asked if it would be necessary to introduce a single planning framework to speed up the delivery of housing. 

 

‘Let down’ Londoners 

Gove said: “Londoners are being let down by the mayor’s chronic under-delivery of new homes in the capital. We have already taken comprehensive action to reverse this trend – investing billions of pounds to build affordable homes and unlocking brownfield developments as part of our Long-Term Plan for Housing.

“However, that alone will not build the homes we need, which is why I am now directing the mayor to review aspects of the London Plan and announcing specialist support on planning to help unlock thousands of homes. 

“I look forward to continuing to work with the Greater London Authority, councils and the sector so we can get spades in the ground and deliver the homes the capital needs.”

Greg Hands, minister for London, added: “It is unacceptable that Londoners don’t have access to the homes they need due to persistent under-delivery of homebuilding, which is why we’re directing the mayor to review London Plan policies. 

“This action comes on top of millions of pounds in government investment to regenerate estates, unlock major brownfield sites, and build thousands of new homes. But government cannot act in isolation – we need the Greater London Authority to step up and work with us, so we can provide affordable housing for all.” 

The government has brought in a “super-squad” of planners to speed up planning decisions in London, and they will prioritise cases where developments have been held up in the planning system. 

They will focus on Newham and Greenwich first, with a fund of £500,000 to help with planning applications, which is set to unlock more than 7,000 homes. 

The government said the rate of the delivery of homes in London needed to rise from an average of 37,200 per year to 62,300 to meet the London Plan’s targets. 

Bank of England expected to hold base rate this week

Bank of England expected to hold base rate this week

At its last meeting on 1 February, the MPC had a three-way split: six members voted to hold the base rate at 5.25 per cent, two voted for a rise and one for a cut. A split vote indicates that rates may be held in March as well.

Steve Matthews, investment director at Canada Life Asset Management, said: “With the Bank of England expected to hold interest rates later this week, all eyes will be on the committee’s remaining two hawks – Jonathan Haskel and Catherine Mann – who voted for a rate hike in February.

“If both Haskel and Mann shift to hold, it could signal that a June cut is potentially on the cards. However, they retain ongoing concerns, repeated by Mann last week, over the tight labour market and UK wage growth settlements still outpacing inflation, despite it slowing again in the three months to January. The surprising inflation data from the US last week will also be front of mind.

“In turn, the market will also be looking to see if more committee members decide to join Swati Dhingra, who was the first to call for an immediate cut last month. Unless we see something seismic in Wednesday’s inflation data, we still expect Dhingra to remain an outlier, with the majority of the committee wanting to see the data get very close to and stabilise around two per cent before they join the ‘cut’ party.”

The UK inflation rate has fallen significantly from the record inflation rate recorded in October 2022, when it hit a 12-year high of 11.1 per cent.

In the 12 months up to January, the Consumer Price Index (CPI) measure of inflation was four per cent; on a monthly basis, the CPI fell by 0.6 per cent in January 2024, the same rate as a year ago.

Experts generally expect February’s figure to be lower than in January. Capital Economics has predicted that the inflation rate could fall to about 3.3 per cent, while S&P Global Market Intelligence forecasts a rate of about 3.6 per cent.

In its Monetary Policy Report in February, the BoE said inflation would hit its two per cent target in April, but then could rise again.

Andrew Bailey, the bank’s governor, said there had been “good news” on inflation in recent months, but that the committee needed to see more evidence that inflation will fall “all the way to the two per cent target, and stay there” before it can reduce interest rates.

Kent Reliance launches resi range and cuts BTL rates

Kent Reliance launches resi range and cuts BTL rates

Within the residential range from Kent Reliance, its income flexibility range for customers who need flexibility around income multipliers is available up to 95 per cent loan to value (LTV) up to £1.5m.

Its extra flexibility range, for borrowers who need flexibility due to the credit profile, is available up to 85 per cent LTV.

Core residential fixed rates at 85 and 90 per cent LTV have fallen.

In the shared ownership range from Kent Reliance, all product fees have been removed and rates on 95 and 100 per cent mortgage share value (MSV).

In its BTL range, 80 per cent LTV fixed rates have dropped by 0.5 per cent.

Full range rates from 4.59 per cent are suitable for any property type, including houses of multiple occupancy (HMOs) with up to 20 lettable rooms.

Adrian Moloney (pictured), group intermediary director at OSB Group, said: “With the current economic backdrop, we were keen to provide some positive product options for brokers, as we understand the challenges they are facing across the board.

“At the end of the day, there are always clients wanting to transact, whether it’s for the next step towards a family home or an investment property, so it’s important as a lender that we listen and adapt accordingly. For example, our income flexibility products were designed to help newly qualified professionals looking to purchase their first home but needing flexibility around income multipliers.”

Wayne Gray, managing director of DMI Finance, said: “KRFI are a key lending partner and these products and reduced rates will certainly be welcome news, especially for our residential clients who need just a little more flexibility in order to secure their dream property.

“Alongside this positive news, we really value the support of KRFI’s award-winning BDM team, as they take the time to talk through case complexities, which can make a real difference towards securing a positive outcome.”

Property developer slapped with bankruptcy restriction of 12 years

Property developer slapped with bankruptcy restriction of 12 years

Glenn Armstrong was given a bankruptcy restrictions order (BRO) for 12 years at the High Court last week, following an investigation by the Insolvency Service.

This will mean that he is unable to borrow over £500 without informing the lender that he is subject to extended restrictions or cannot act as a company director without the court’s permission for 12 years under the order.

Bankruptcy proceedings began against Armstrong in 2018 following a creditor petition.

The proceedings found that Armstrong had offered false and misleading information to four individuals to allow him to secure £273,000.

Armstrong signed an undertaking with the Financial Conduct Authority (FCA) in December 2018, where he said he would not enter into any further loan agreements directly or through his companies.

He was declared bankrupt in February 2021, and the 64-year-old had been subject to an 18-month interim BRO secured in August 2022.

Joe Sullivan, official receiver at the Insolvency Service, said: “Glenn Armstrong’s conduct in misleading investors was unacceptable and we are pleased to have secured stringent bankruptcy restrictions against him.

“The 12-year bankruptcy restrictions order, which follows on from an interim 18-month BRO, reflects the seriousness of the case and misconduct identified by the Insolvency Service.

“We will not hesitate to take robust action when financial wrongdoing is uncovered.”

The Cambridge adds JBSP deal; MPowered Mortgages cuts rates – round-up

The Cambridge adds JBSP deal; MPowered Mortgages cuts rates – round-up

The JBSP product will allow up to two occupiers to use the additional income of up to two close family members.

The JBSP deal accepts up to four applicants in total, and the combined income will allow customers to borrow more.

Supporting family members will be named on the mortgage and will be jointly responsible for monthly mortgage payments being met.

Family members will not be on the title of the property, and the occupiers have legal ownership of the purchased property.

Kathy Bowes, intermediary manager at The Cambridge – which opened up to foreign nationals in January – said: “We appreciate that getting a foot on the property ladder is not without its challenges, and that many borrowers rely on family members to support them purchasing their own home.

“We’re a building society built on a foundation of finding new ways to help people have a home. In addition to our shared ownership products and 95 per cent lending, we hope that this JBSP initiative will help brokers find additional solutions for borrowers trying to buy a home.”

 

MPowered Mortgages lowers rates across all fixed rates

Prime residential mortgage lender MPowered Mortgages has lowered rates across its entire fixed rate mortgage range.

Two-year purchase rates at 60 per cent loan to value (LTV) with a £999 arrangement fee have fallen from 4.9 per cent to 4.52 per cent.

Two-year remortgage rates at 60 per cent LTV with £999 arrangement fees have decreased from 5.19 per cent to 4.57 per cent.

Fee-free two-year purchase rates have gone down from 5.14 per cent to 4.69 per cent, and for remortgage, the rate has decreased from 5.34 per cent to 4.84 per cent.

The lender has cut three-year fixed rates, with purchase rates beginning from 4.42 per cent with a £1,999 arrangements fee, and remortgage rates starting from 4.49 per cent with a £999 fee. This is down from 4.47 percent, 4.57 per cent and 4.77 per cent respectively.

Products without an arrangement fee are at 4.67 per cent for purchases, formerly 4.77 per cent.

For five-year fixed rate deals, purchase rates with a £1,999 fee start at 4.42 per cent, and remortgage deals are priced from 4.44 per cent with a £999 fee. Fee-free purchase rates begin from 4.44 per cent and 4.64 per cent for remortgages.

Remortgage cashback deals come with a choice of either £500 cashback or a legal assist feature, which goes towards legal fees.

Matt Surridge, sales director at MPowered Mortgages, said: “We are delighted to be able to reduce our fixed rate mortgage range at a time when most other lenders are raising mortgage interest rates.

“The decision reflects our optimistic outlook for the housing market over the next few months and our determination to support homeowners at this challenging time to purchase a home or remortgage.

“As always, borrowers looking to take advantage of these new rates should seek independent professional advice to ensure a comprehensive understanding of the products on offer and how they match up to their requirements.”

BSLS2024: AI will not replace ‘divergent or creative’ thinking

BSLS2024: AI will not replace ‘divergent or creative’ thinking

Speaking at The British Specialist Lending Senate, senior policy adviser at the Association of Mortgage Intermediaries (AMI) Chloe Timperley (pictured) said that there is a bit of a dilemma with AI, as it is “fraught with risks”.

She explained: “It’s so new, it’s exploded onto the scene and a lot of people don’t really know how it works. There’s this race to get it embedded and be an early adopter, but it also feels like you can’t ignore it and you can’t be left behind.”

Timperley said that AI “is not thinking for itself”, so it couldn’t write a piece of content in the same way that a human can.

“So, if you want to write a piece of content, you might have your concepts floating around in your head and then you try and put words to that and hang those words on the idea.

“AI has a data training set of 300 billion words, and to put that into context, the oldest estimate of the known age of the universe is about 27 billion years, so we’re talking about a number that is 11 times bigger than that,” she noted.

Timperley said that AI was taking all of its training data, then the prompt, and predicting word-by-word “what is the most probable word to come next, so it’s flying blind”.

“It’s working on probabilities. When you do your prompt, you have to bear in mind that you are fighting against the weight of all the biases baked into that training data,” she added.

As an example, she said that if you put a mortgage-related question into ChatGPT, but do not qualify in the UK, the answers will tend to be more US-centric, which may not be relevant.

 

AI will come up with ‘most mainstream option’

Timperley continued on to say that as AI is “based on probabilities and averages”, it was “convergent thinking”, therefore it was “going to come up with the most generic, the most mainstream option”.

Consequently, she said that AI would “not replace divergent or creative thinking”.

However, she said that it did have certain uses, with one being that if you have a lot of thoughts, put them down in a “brain dump”, and then want them to be organised, then AI can do that and “structure it for you”.

“So, it can help you to overcome that blank page syndrome. Another thing it can do is it’s very good at condensing, so ChatGPT can compress that down for you and edit things,” she added.

Housing benefit pays over a third of rents in towns with poor-quality rental stock, JRF says

Housing benefit pays over a third of rents in towns with poor-quality rental stock, JRF says

According to a Joseph Rowntree Foundation (JRF) report, around 70 per cent of local authorities with below-average private rents have a bigger share of private rented homes that are non-decent than average, at 23 per cent.

Non-decent housing means that it does not have basic legal health and safety standards, is not in a reasonable state of repair, does not have reasonably modern facilities and services and does not have insulation or heating that is effective.

The JRF said that more than £1 in every £3 of private rent in Blackpool and Hartlepool is paid for with housing benefit.

It added that around £1 in every £4 of private rent is paid for with housing benefit in Hull, Great Yarmouth, Hastings, Oldham, Wolverhampton, Bradford and Sunderland.

The report explained that there had been a “rapid expansion” of the private rented sector (PRS) in coastal and ex-industrial towns in England, and with lower house prices and higher rental yields, private landlords had purchased homes, some of which are being let out to tenants in poor condition.

The JRF said that housing benefit, which is paid to low-income tenants to assist with housing costs, is being used to subsidise poor-quality housing, noting that this was “poor value for money for taxpayers”.

The report said that a shortage of social housing left low-income households little choice but to live in non-decent rental properties.

The JRF said that in more than one in 10 local authorities, over £1 in every £20 spent in total was spent on temporary accommodation.

The growing demand for temporary accommodation means there is a rise in private companies renting poor-quality homes to local authorities with a “significant premium”.

The JRF said that this can cost up to five times more than similar homes that are owned by local authorities and puts increased financial pressure on councils.

Last year, a report from Resolution Foundation found that roughly 10 per cent of people surveyed lived in poor-quality housing.

 

‘We need to get this dysfunctional system working again’

The JRF said that moving private homes into social ownership could make expensive temporary accommodation cheaper, improve housing standards and make local housing markets more equal overall.

It is calling for local councils to be supported to buy existing homes to let, as they are better quality and less expensive than temporary accommodation. This could be done by extending the Local Authority Housing Fund.

The community rented sector should be grown in lower-cost housing markets where homes are in poor condition, and Right to Buy should be reformed to stop social housing being sold off and to keep subsidies in the system.

Darren Baxter, principal policy adviser at JRF, said: “Taxpayers and local councils shouldn’t be footing the bill for poor-quality properties owned by private landlords. Tenants on low incomes and homeless people living in temporary accommodation are also paying the price by being forced to live in poor-quality and even downright dangerous homes.

“We need to get this dysfunctional system working again. Strategically bringing private homes back into social ownership is a rapid way to fix this crisis. Doing so would stop vast sums of public money paying for poor-quality homes and rebalance local housing markets towards more affordable homes.”

Santander accepts Universal Credit as second income; Clydesdale refreshes rates – round-up

Santander accepts Universal Credit as second income; Clydesdale refreshes rates – round-up

The change from Santander will apply from 18 March and borrowers must be receiving another source of earned income either as an employed or self-employed worker. 

This primary source of income must be evidenced on the Universal Credit statement. 

Proof of the last six months of Universal Credit payments are required for an assessment, along with a breakdown of payments and deductions.

Santander will not accept bank statements as proof of Universal Credit income. 

It will calculate affordability using an average of the last six months of Universal Credit payments minus the latest month’s housing benefit. 

 

Clydesdale Bank increases mortgage rates 

Clydesdale Bank will be increasing rates across select mortgages from 19 March. 

Its residential two- and five-year fixed rates at 65 and 75 per cent loan to value (LTV) will rise by as much as 0.13 per cent, while two-year fixes for professional borrowers at 75 per cent LTV will go up by 0.05 per cent. 

Its exclusive residential two- and five-year fixed rates will be increased by up to 0.1 per cent. 

Clydesdale Bank is reducing select buy-to-let (BTL) and interest-only mortgage rates. 

Its two- and five-year fixed BTL rates will be cut by 0.3 per cent, while select two- and five-year fixed interest-only deals at 80 per cent LTV will be reduced by 0.05 per cent. 

This is the second time this month it has amended its mortgage rates. Earlier in March, Clydesdale Bank made increases across select products for new and existing borrowers.

FCA to review firms’ treatment of vulnerable customers

FCA to review firms’ treatment of vulnerable customers

The Financial Conduct Authority (FCA) will publish its findings before the end of the year, and this follows a commitment made by the regulator in 2021. 

At the time, the FCA said the fair treatment of vulnerable customers should be embedded in a firm’s culture, adding that the needs of such customers must be understood. It also expected employees to have the right skills to recognise the needs of vulnerable customers. 

The regulator said this year’s review would look at how firms understand consumer needs, the skills and capabilities of staff, product and service design, communications and customer service and whether customers are being treated fairly. 

The outcomes vulnerable customers receive will also be assessed to determine if they are as good as the outcomes received by other consumers. 

This review will be done using consumer research and information gathered from firms and consumer representatives. 

The FCA said this would enable it to understand if customers most susceptible to harm were receiving good outcomes. 

 

Vulnerability review ‘no surprise’ 

Andrew Gething, managing director of MorganAsh, said: “It is no surprise that the FCA has announced its plans for a review of how firms are managing customer vulnerability. The vulnerability guidance FG21/1 came in three years ago – although Consumer Duty FG22/5 gave it great impetus in July 2023. 

“A simple check firms can undertake themselves is the number of vulnerable customers they have recorded.” 

He added: “Many firms are still reporting the number of vulnerable customers in the single figures – so they are also falling well short. Some common errors include only being reactive to consumers volunteering information when the consumer contacts the firm, thus only assessing a subset of customers – firms need to be proactive and attempt to assess all customers. Also, relying on consumers to volunteer information, when they need to be asking questions of the consumers, or obtaining the data from elsewhere – and only assessing financial vulnerability, while ignoring health and lifestyle issues, as this is the only data that can be provided by data providers. Plus, relying on agent/adviser assessments, which generally underreport, and thinking that if they have overcome the vulnerability, then they don’t need to record it. Finally, only recording when they make an adjustment and ignoring the milder vulnerabilities that don’t have an impact on the immediate process.

“As part of Consumer Duty, firms need to report in July on outcomes and the comparison of the vulnerable cohorts (bereaved, divorced, cancer, debt, etc.) compared to the resilient. It is becoming obvious that few firms can actually do this, as they don’t have the data. As a result, firms should look to start the process so they can show evidence and plans to comply. Alongside good-quality data, firms must have necessary technology to provide a proactive and objective way to assess consumer vulnerability. With the right processes in place, compliance can start to feel like a competitive advantage, providing firms with a greater level of intelligence, which will strengthen client relationships and deliver a level of service that is far better-suited to their needs.” 

Gething said: “A wider challenge is the lack of monitoring over the lifetime of the product – which often requires some form of cooperation between manufacturer and broker. Some have questioned whether the responsibility falls on the intermediary or the manufacturer. As far as Consumer Duty is concerned, it doesn’t matter who undertakes the monitoring, just so long as it happens.”