Nationwide cuts select rates across higher LTVs
The largest cuts were applied to its first-time buyer range, with its two-year fixed rate at 85 per cent LTV going down by 0.17 per cent to 1.62 per cent. It comes with a £1,499 fee.
Its two-year fixed rate at 95 per cent LTV, also with a £1,499 fee, has been reduced by 0.05 per cent to 2.94 per cent, whilst its three-year fixed rate at 90 per cent LTV with a £999 fee has gone down by 0.1 per cent to 2.02 per cent.
For new customers moving home, the lender has cut rates by up to 0.11 per cent, including its two-year fixed rate at 85 per cent LTV, which has decreased by 0.05 per cent to 1.57 per cent.
Its three-year fixed rate at 90 per cent LTV has also fallen by 0.1 per cent to 1.94 per cent. Both come with a £1,499 fee.
Its two-year fixed rate at 95 per cent LTV has decreased by 0.1 per cent to 1.94 per cent. It is subject to a £999 fee.
Nationwide is also cutting rates by up to 0.11 per cent for existing members moving home for two and three-year fixed rates products between 75 per cent and 95 per cent LTV.
In addition, rate cuts of 0.11 per cent are being applied to some further advance, family deposit mortgage and switcher rates.
Henry Jordan, Nationwide’s director of mortgages, said: “By improving the competitiveness of our two and three-year fixed rate products, we are aiming to support those mortgage customers with smaller deposits who are looking for payment security.”
Bridging lender Vector Capital targets £100m loan book in two years
The lender, which listed on the Aim in December, reported a year end loan book of £36.4m at the end of 2020, and is predicting a year end loan book size of £40m by the end of this year.
Chief executive officer Agam Jain (pictured) said: “We are still quite small, but we have got an ambitious growth plan, so hopefully in the coming years we will be a bit more prominent.”
He added that there was no need to enter new segments. The lender is focusing on property developers, people buying properties mainly for refurbishment and commercial property.
“From our point of view, there’s lots of opportunities and it is competitive, but you know just by being better and more aggressive we’re going to get our share,” he said.
Jain said that listing was challenging due to the pandemic, adding that the process took around six months.
He said: “It’s not necessarily the easiest way of raising capital, and if people have got connections with private investors of a large enough scale that might not be a motivation for them. But for us, we wanted to go down this road because you know we want to build a brand as well, not just a loan book.”
He added that the pipeline for the business was “very good” and “higher than it has been ever”, but chancellor Rishi Sunak’s upcoming tax announcements on 27 October could have a dampening effect.
Jain said: “If you ask me today, it’s a very good pipeline but it only takes a bit of bad news, especially on taxes, for people that do these projects to feel it’s not worth it anymore. When that happens, then obviously things will change.”
He added: “I think everybody is very optimistic about the economy, particularly in our segment. But I think the next dampener will be when Rishi Sunak announces what he’s going to do about tax.
“We’re on this sort of optimistic gravy train at the moment. I don’t know whether we’ll be able to think, it doesn’t matter, we’re going to pay a bit more [in taxes], but we can still carry on as we are.”
During the pandemic Jain said that there was a “three-month pause” among bridging lenders during the initial lockdown. Most lenders, including Vector Capital, ceased new lending due to uncertainty. The firm restarted new lending at the end of June 2020.
Jain said: “Our industry was less affected than others…because we were lending against property and the property prices didn’t crash in three months. We still had a bit of equity, and then when our borrowers asked for a holiday we were able to be considerate the request and give that.
“We weren’t foregoing the interest, we were just deferring it, it didn’t affect our results that much. As a consequence, we also didn’t actually have any bad debts, which you could have expected.”
He said that the market was still growing but warned that a correction could be on the horizon, as loan to values (LTV) continue to climb.
He explained that twice in the past lenders had gone up to 90 per cent LTV or 100 per cent LTV, with some even going up to 105 per cent LTV as they expected property prices to rise.
Jain said: “We are still trying to play a safe 75 per cent LTV, and the reason for that is there will be a correction at some stage, and you don’t want to be that lender who, in order to grow its loan book and get a bigger market share, went out at 100 per cent or 105 per cent LTV.”
He added: “The market is expanding, there is a lot of opportunity there, but we still think that lenders should be responsible and safe and not over egg the pudding.”
Jain said that recently developers had been struggling with margin, as materials were taking 12 weeks or more to arrive and prices had gone up by between 20 to 30 per cent.
“This means that their project is taking longer to complete, they’ve got more costs and more interest being accrued. Assuming that their expectation that their sale price will hold up, a lot of them are getting very close or borderline.”
He said that to adjust to the changing environment it was important to be supportive, especially if you were working with someone on several projects.
“We have to be supportive for mutual interest. Trying to pull the rug isn’t going to help anybody.”
Some cases had begun to edge up to 90 per cent LTV, he added, but as these clients were doing multiple projects they could offer other security from their portfolio.
Clydesdale Bank ups max LTV for new-build homes to 90 per cent
The maximum LTV was previously 85 per cent, and the change comes into force from today.
The lender’s maximum LTV for new-build residential flats is still 80 per cent LTV, while its maximum LTV for buy-to-let (BTL) houses is 80 per cent LTV for houses and 70 per cent LTV for flats.
Offers on new builds are valid for 180 days from the issue date, and builder incentives can be available on a case-by-case basis.
The lender defines a new build as a property that has not been previously occupied, a property sold by the builder or developer, a property built within two years of the mortgage application or converted into a flat within two years before the mortgage application.
Letting professionals and tenants divided on benefit of repeal of Section 21 eviction notices
According to the State of the Lettings Industry report by Goodlord and Vouch, now in its fourth iteration, 38 per cent of tenants surveyed thought that the repeal would have a major and positive change to the private rented sector, as opposed to just eight per cent of agents.
This compared to 30 per cent of agents who think the change would be major and negative, compared to just five per cent of tenants.
The government said it would repeal Section 21 evictions in 2019 but is still yet to do so.
Earlier this year, it said it would be releasing a white paper on the private rented sector in the autumn, and it is also working on a Renters Reform Bill, which could lead to serious changes in the private rented sector.
The report also found that around 64 per cent of letting professionals said they expected landlords to leave the sector in the coming year.
Around 83 per cent of letting professionals surveyed said they have seen landlords leave the sector in the past year, with the majority seeing between one and 19 per cent exit over the past year.
Some buy-to-let brokers have said that smaller landlords had decided to sell their properties during the pandemic as property prices rose, but suggested these could be picked up by portfolio landlords looking to expand.
The most common reason for exits was legislation, followed by costs, tax changes, yields and return on investment.
Arrears stabilising but still high
Lettings professionals reporting an increase in rent arrears in September fell from 64 per cent last year to 32 per cent this year. Under half reported rent arrears had stayed the same, which the report said indicated that they were still high.
Just under a third of respondents said they had seen an increase in arrears over the past year, and of those 37 per cent said that it had increased by 10 per cent.
Around 22 per cent said arrears had risen by between 11 and 20 per cent, whereas 16 per cent said that arrears had increased by 30 per cent or more.
Fraudulent property scheme director handed nine-year ban by courts
The disqualification order, which is in effect from 31 July, means Roberts cannot promote, form or manage a company in this period without permission from the court.
The High Court wound up 13 companies owned by Roberts and his wife Charlotte Roberts in 2017 as it had scammed property investors out of £7.8m.
Between 2013 and 2015 the couple targeted high net worth individuals and investors to develop an entertainment complex on the site of a former convent at Woodchester, near Stroud. The complex would include a hotel, music venue, members club and spa.
BBH Property1 and BBH Property2, companies set up by the couple, raised money from investors that was allegedly going to be used to buy the convent’s properties.
BBH Property1 raised over £1.3m, which was going to be used to buy four of the convent’s properties, but only one property was bought for around £200,000. Nearly £880,000 was transferred to an unconnected company.
BBH Property2 raised around £4.3m and was supposed to be used to purchase three properties. However, none were purchased with £140,000 being transferred to an unconnected company and £300,000 paid to a third party.
Assistant official receiver John Matthews said: “Matthew Roberts used the two property companies as vehicles to raise millions of pounds that was claimed to be for the purchase of specified properties as part of a grand redevelopment project. The money raised, however, was not used for that specific purpose and this meant the investors did not have the security that they had been promised.
He added that nine years was a “significant period to be removed from the corporate arena” and it should be a warning to other directors operating investment schemes.
Virgin Money brings out 90 per cent LTV products
The lender said it was bringing back the exclusive two-year fixed rate from tomorrow. It was initially launched in February and withdrawn in May.
The product has a rate of 1.99 per cent and comes with £1,000 cashback.
It has also introduced a three-year fixed rate with the same rate and a £995 fee.
According to its intermediary website, there are 17 products at the 90 per cent LTV tier, which includes purchase and remortgage, shared ownership, green shared ownership, product transfer and tracker products.
Lenders pulled back from higher LTV lending during the pandemic as it was perceived as a greater risk.
Since then, lenders have re-entered the space, with 90 per cent LTV products rising from 62 in September to 579 this month.
Virgin Money came back into the 90 per cent LTV space in December with a five-year fixed rate and continued to add options to its range throughout the year.
Earlier this year the lender announced that it had broadened the eligibility of its 90 per cent LTV mortgages to movers and remortgagors.
HSBC cuts rates and adds sub-one per cent deals to range
The lender has decreased the rate on its five-year fixed rate remortgage at 60 per cent loan to value (LTV) from 0.99 per cent to 0.94 per cent. It has a fee of £999.
Its two-year fixed rate at 75 per cent LTV has fallen from 1.04 per cent to 0.99 per cent. It comes with a £999 fee.
HSBC brought out several sub-one per cent deals, including a two-year fixed rate at 60 per cent LTV at 0.94 per cent in July. It then brought out a 0.89 per cent deal in August, also a two-year fixed at 60 per cent LTV, which is its lowest ever fixed rate product.
In its remortgage range, the lender has also cut its no-fee two-year fixed rate at 75 per cent LTV by 1.39 per cent to 1.29 per cent. Its five-year fixed rate at 75 per cent LTV with a £999 fee has been cut from 1.19 per cent to 1.14 per cent.
On the purchase side, its two-year fixed rate at 85 per cent LTV has gone from 1.74 per cent to 1.59 per cent. Its two-year fixed rate at 90 per cent LTV has fallen from 1.99 per cent to 1.94 per cent. Both come with a £999 fee.
HSBC UK’s head of buying a home, Michelle Andrews, said: “Buying a home or remortgaging with us has never been cheaper. These cuts will make getting on to or moving up the property ladder more affordable, possibly being the difference in a home buyer being able to afford the property of their dreams.”
Castle Trust Bank removes loading for HMO and holiday lets and cuts rates
The lender has removed loading, where an increased cost or additional rate is applied to certain products, from its HMO and holiday let range.
Castle Trust Bank has also cut rates across its product offering, with rates now starting from 3.82 per cent.
It has also brought out a buy-to-let (BTL) exclusive at 3.95 per cent up to 70 per cent loan to value (LTV). The product is available via Brightstar Financial, Brilliant Solutions, Commercial Trust, Crystal Specialist Finance, First 4 Bridging, SPF, Sirius, Synergy Commercial, Watts Commercial and Vibe Financial Services.
The lender is continuing its exclusive five-year fixed rate product, which is priced at 4.5 per cent and comes with early repayment charges for the first two years.
This product is available through Brightstar Financial, Commercial Trust, Complete FS, Crystal Specialist Finance, First 4 Bridging, Positive Lending, Rangewell, SPF, Sirius, Synergy Commercial, The BTL Broker, Watts Commercial, Vibe Financial Services and Yellowstone Finance.
Castle Trust Bank’s sales director Rob Oliver said: “It’s now more than a year since we became a bank, and one of the many advantages is that it gives us greater flexibility in our product development and pricing.
“We have already seen the popularity of our HMO, holiday let and bridge to let products amongst brokers and we hope to make them even more attractive to a wider group of customers, with even keener pricing.”
He added that the lender continued to support its distribution partnership with the BTL exclusive and the extension of its five-year fixed rate exclusive.
Quarterly mortgage lending reaches highest level since 2007 at £89bn – FCA
According to the Financial Conduct Authority’s (FCA) latest mortgage lending and administration return statistics, is also up on pre-pandemic levels, with gross lending in the second quarter of 2019 pegged at £66bn.
The FCA added that it was the highest level of mortgage lending since the third quarter of 2007 when gross mortgage lending came to around £102bn.
The figures show that this quarter is the fifth consecutive quarter of growth, with gross mortgage lending increasing since the second quarter of last year.
The report also showed that the value of new mortgage commitments was £85.6bn, which is up from £34.4bn in the same quarter last year.
However, the report said that it was £2.1bn lower than the peak reached in the fourth quarter of last year of £87.7bn.
High LTV segment continues to grow
The share of mortgages advanced in the second quarter with loan to value (LTV) exceeding 75 per cent came to 39.6 per cent, which is up from 36.5 per cent in the same quarter last year.
The proportion of loans between 75 and 90 per cent LTV increased from 31.6 per cent last year, to 37.6 per cent this year. It is also up from 35.7 per cent in the first quarter of this year.
Loans over 90 per cent LTV grew slightly, up 0.9 per cent from the first quarter to two per cent. However, this is down from 4.9 per cent in the second quarter of last year.
Home movers and first-time buyer growth strong but buy-to-let stalls
Buy-to-let (BTL) gross advances, which covers house purchase, remortgage and further advance, came to 11.3 per cent in the second quarter, which is down 3.1 per cent compared to the second quarter of last year.
It is also down from the first quarter, where BTL gross advances were around 11.7 per cent.
Within house purchases, which made up 66.4 per cent of gross advances, lending to first-time buyers was 6.5 per cent higher than the same quarter last year at 24.7 per cent. It is also 2.8 per cent higher compared to the first quarter of this year.
Home movers’ share also grew, coming to 41.7 per cent, which is up from 23.4 per cent in the second quarter of last year. However, it is 0.5 per cent lower than the first quarter of this year.
Of the advances for owner occupiers, which was around 88 per cent of advances, the share for remortgages fell 21.3 per cent from the same quarter last year to 16.6 per cent and is the lowest since 2007.
UK government will not meet 300,000 homes a year target until 2028 – NAEA Propertymark
NAEA Propertymark, in response to the House of Lords Built Environment Committee’s call for evidence, pointed to figures in 2019 and 2020 which said total new build completions only came to 220,600, which was 6,190 more than for 2018 and 2019.
It added total net additional dwellings in 2019 and 2020 was 243,770, 23,000 of which were due to conversions and change of use.
The body continued to say it did not believe the UK government’s target of 300,000 new homes per year accurately reflected housing demand.
It said this was because the target has not been modelled on what is needed for each property tenure across the country and did not consider affordability, such as wage entitlement and wage growth.
Propertymark also said it did not believe the construction sector was able to meet UK housing demand, which it attributed to shortage and heightened cost of materials as well as reduced workforce due to Brexit.
The House of Lords committee, which was created in June this year, aims to examine factors influencing type, tenure and quality of housing needed in the UK, as well as challenges in meeting that demand like skills shortages or issues with the planning system.
Propertymark said to ensure a balance of new homes across the country, a long-term solution to address limited affordability in the private rented sector needed to be created, which would provide more social housing and make renting more affordable and secure.
It also recommended the removal of surcharges on the purchase of additional homes to encourage further investment in the private rented sector, and to construct housing for older generations along with incentives to promote downsizing.
Propertymark added that action on empty homes would also be required and a review on the impact of short-term lets on the private rental sector.
It continued that to meet housing demand, the UK government should review property taxes, following the rush created by the stamp duty holiday, to enable more people to buy and sell their home.
Buy-to-let taxes and other legislation should also be reviewed to encourage landlords to remain in the private rented sector, the body proposed.