First applicants accepted for First Homes Scheme and target of 1,500 homes revealed
The scheme, which was launched in June this year with seven lenders signing up, awards a minimum of a 30 per cent discount on market price for first-time buyers and key workers to help them get on the property ladder.
These include Chorley Building Society, Darlington Building Society, Halifax, Leeds Building Society, Mansfield Building Society, Nationwide Building Society and Newcastle Building Society. All are offering 95 per cent loan to value mortgages for the scheme.
The key workers who have signed up to the scheme are from Bolsover in Derbyshire, First Homes is currently in its pilot phase. There are sites in Bolsover, Cannock and Newton Aycliffe are among the first to put homes on the market.
According to an update from the Department for Levelling Up, Housing and Communities, around 1,500 homes will now be built over 100 locations across England by March 2023 following successful bidding by housebuilders.
It comes after Eastleigh Borough Council confirmed plans to deliver 200 First Homes in the borough.
The government has also estimated that around 10,000 First Homes will be delivered across the country by 2027 and 2028.
The housing minister Christopher Pincher said: “This scheme is putting local people first and creating opportunities for young people and families to feel the sense of pride that comes with homeownership.
“We are determined to help more people on to the housing ladder and are providing significant funding to regenerate derelict land, deliver new homes and create prosperous local communities across the country.”
Stuart Miller, chief customer officer at Newcastle Building Society, said that it had seen “significant interest from customers and brokers” in its First Homes products due to the significant discount on the purchase prices, competitive interest rates and low deposit requirements.
He said: “We understand how big a challenge it is to get a foot on the property ladder with rising house prices and limited housing supply which is why we are such big supporters of this scheme and other innovative solutions such as Deposit Unlock where we were the first lender to offer mortgages under the scheme.
“We fully expect that demand for First Homes properties will exceed supply even as the scheme expands and would therefore encourage more innovation from lenders and further government support to help people achieve their dream of home ownership.”
Gove might consider ‘further action’ to support first-time buyer lending – Bamford
His recent appearance before the Housing, Communities and Local Government Select Committee was noteworthy for any number of reasons with Mr Gove using the meeting to outline his views – and no doubt direction of travel – on a large number of issues, not least cladding, leaseholds, planning, housing supply, and mortgages.
Given he has been a part of a government which has clearly sought to provide support to first-time buyers in order to help them onto the ladder, it appears there may be some doubt in his mind about whether government action has been met in kind by lenders.
He called lenders “overcautious” in their lending policies to first-timers since the 2008 financial crash, suggesting the housing gap couldn’t simply be bridged by the building of new homes, with the assumption being here that lenders have effectively put the brakes on the ability of new owner-occupiers to get on the ladder.
Many within our sector will have some sympathy with that argument, not least because we have clear evidence to suggest that without the government’s most recent intervention – the guarantee to stimulate higher LTV mortgages – we may well be still looking at very slim product pickings for borrowers wanting 95 per cent LTV mortgages in particular.
I think there would be little pushback on the suggestion that lenders have been reluctant to fish in these high LTV waters without government support, although it is now somewhat ironic that, with that support available, many lenders are choosing not to use the government scheme and are instead using private alternatives or indeed not mitigating the risk at all.
Lenders themselves might argue they are curtailed by regulation in terms of their lending levels at higher loan-to-income (LTI) multiples, which tend to be more greatly required by first-timers or those seeking high LTV mortgages. Since October 2014 no more than 15 per cent of a lender’s mortgages can be high LTI, which is defined by the Financial Policy Committee (FPC) as being 4.5 times income or higher.
Gove might consider “further action” to improve first-time buyer lending
However, there are a couple of points to make here – just how close to 15 per cent have lenders got, and why post-March this year have they been so willing to offer higher LTV mortgages when prior to this, they seemed immune to calls to return these products to their ranges? Especially when many are not using the government guarantee designed to incentivise such product offerings?
At the moment first-time buyers wanting high LTV mortgages are catered for relatively well, although it is telling that 95 per cent LTV product numbers are still nowhere near where they were before the pandemic began.
In a very strong sense, Mr Gove is right to highlight this issue because the government’s own guarantee scheme is only due to last just over another year. If it is not renewed, will its passing result in a fall back of 95 per cent LTV options again, even from those who have not used it? If so, that will not be good for a government seemingly still focused on helping more young people into their first homes.
There’s no doubt lenders are still cautious, and it might also be possible that they are shielding behind the FPC rules in order to justify that caution. There has been talk of movement on that LTI measure for some time, which would be welcome – we are not in 2014 any more and, if we are serious about continuing to support first-timers, then lenders may well need to feel they won’t be sanctioned for increasing their lending appetite in this space.
Mr Gove may therefore feel it’s time for further action in a number of areas to improve lending to those new to the housing market.
AMI brings on three new fellows
The trade body announced the new fellows at its annual dinner in London last night.
Laker (pictured third from right) is managing director at Mortgage Intelligence and has worked with the network and club since it was launched in 1996, initially joining as a sales manager. Prior to this she worked at Norwich Union, Royal Life and Prolific & Provincial.
Mirfin started his career at Countrywide Mortgage Services, and then was a director at retirement specialist Key for over 13 years. He was then chief product officer at Key Group for around two years and now works as a consulting equity release specialist.
Copland (pictured third from left) has around three decades of experience in the industry, including 15 years at Pink Home Loans where he took on the role of chief executive.
He has also been the director of LSL Property Services and TMA Mortgage Club and was a non-executive director of lending at Fluent Money. He is now a strategy and business development director for Pivotal Growth.
AMI’s chief executive Robert Sinclair (pictured second from left) said: “AMI confers it’s fellowship award in recognition of outstanding contributions to the trade body or in our view furthering the good interests of the intermediary community.
“All four have been passionate supporters of AMI and its work. They also have worked in our sector to educate, innovate and lead by example. Their commitment to the advice profession delivering great customer outcomes merits their recognition.”
He added: “AMI will use its wise counsel in future years to ensure we remain focused and relevant.”
The association introduced the fellowship membership class in 2013 and fellows will be honorary members of the association for life and there is a cap of 10 fellows at any one time.
The first fellow who was appointed was Stephen Smith (pictured far right), who spent over 40 years in the mortgage industry, including around 14 years on the AMI board and 24 years at Legal & General Mortgage Club. He retired in 2017.
Smith is currently a non-executive director at Legal & General Home Finance, Mortgage Advice Bureau and Twenty7Tec, as well as deputy chairman for the mortgages advisory board for The Financial Services Forum.
Just Mortgages welcomes 18 to academy
The previous academy record was 12 trainees, and the programme has trained over 65 brokers so far this year. It is the last academy of the year
Trainees will learn the ropes of mortgage broking on a five-week course if they do not have a CeMap 1 qualification. For those that do have this qualification, they join for the final three weeks.
Skills that are built on during the programme include: enhancing understanding of the sales process, building rapport with clients and effective questioning to understand clients’ needs. It also teaches brokers about mortgage protection.
Trainees come from varied backgrounds, including recent graduates from hospitality, dentistry and the estate agent sector.
Head of training Rodney Sloan said: “Competition for places on our academy is incredibly tough. Every course we struggle to decide who deserves a place. Although we could conduct courses with larger groups via video conferencing, we don’t want to compromise on the quality of our training.
“By conducting the training in person, everyone on the course gets time to discuss any queries with the team, and the other trainee brokers.”
He added: “It is a source of massive pride that we support new blood coming into the mortgage industry through our academy, and this year we have trained more brokers than ever before. Next year we will build on this, and continue to bring talent into the sector.”
Those who complete the course will be supported by Heidi Smith, who is the newest member of the learning and development team.
Green Finance Institute brings out green mortgage hub
The hub will also have a library of articles, reports, tools and pilots related to the green mortgage market.
It aims to encourage lenders to enter the green mortgage market and to provide a “trusted source of information” for mortgage intermediaries, policymakers and non-government organisations (NGO).
Green mortgage products can either offer improved mortgage rates for customers building or buying more energy efficient homes or provide additional borrowing options along with an existing loan to those looking to improve their energy efficiency.
Other products offer tools to help customers understand home improvements they can undertake on their property to improve their energy efficiency.
The green mortgage market is growing in popularity, with 10 lenders brining out such products since the start of the year.
Recent Intermediary Mortgage Lenders Association research, showed that 77 per cent of lenders were planning to launch green mortgages that were cheaper or priced the same as a typical product.
Emma Harvey, programme director at Green Finance Institute, said: “The finance sector is starting to embrace the opportunities that green products offer to support their customers in the decarbonisation of their homes, and providing information, tools and case studies can help to encourage innovation.
“The Green Mortgage Hub will provide a snapshot of UK green home financing, acting as a resource for lenders to continue developing innovative green home finance solutions.”
Currently the hub has 31 products listed on its table and five pilots, initiatives or tools.
Second charge lending on track to hit £1bn this year – Loans Warehouse
According to Loans Warehouse’s managing director Matt Tristram, the second charge market last reached this figure in 2019. He said the £1bn target was a “benchmark for success for second charge lending”.
Its Secured Loan Index report highlighted that in October the volume of second charge lending came to around £123.6m, which is up £13.4m on the previous month, and the highest recorded under FCA regulation. The previous peak was in 2019 at £118m.
These figures were boosted by the addition of Selina Finance to the market and the removal of pandemic restrictions.
Earlier this week Selina Finance launched an 85 per cent loan to value (LTV) second charge range.
Completions in October also grew by 10 per cent from September to 2,839, which is a record high.
Consolidation loans made up around 46 per cent of loans offered in this period, which was followed by consolidation and home improvements at around 30 per cent and home improvements at around 19 per cent.
The average completion time for second charge loans in October was 17 days, which is 1.7 days faster than September. The average term for a second charge loan was 18.8 years.
Around three quarters of loans offered in October were below 85 per cent LTV, which the report said was because first charge lending at higher LTVs had become more limited during the pandemic. Borrowers’ equity, therefore, was limited and second charge became an alternative method for raising capital.
The proportion of second charge loans below 85 per cent LTV was higher during the pandemic when first charge higher LTV lending was more limited, according to Tristram.
The report collates second charge lending figures from Optimum Credit, Oplo, United Trust Bank, Together Money, Masthaven, Norton Home Loans, Equifinance, Evolution Money, Spring Finance and Selina Finance.
OMS completes API integration with Evolution Money for second charges
OMS users will be able to directly access Evolution Money’s second charge products and get a decision in principle (DIP) without having to re-enter information.
The API will also improve support and speed up the advice process, sourcing and delivery, according to OMS.
Manchester-based Evolution Money, launched in 2011, has lent more than £260m to over 26,500 customers in the UK. It has also approved over 5,700 loans in the last 12 months.
Neal Jannels (pictured), OMS managing director, said that competition was increasing in the second charge sector with more lenders leveraging technology to streamline their propositions and improve their service.
He added: “Evolution Money is an exceptionally tech-savvy lender which is already leading the way by embedding AI and machine-learning into the heart of its processes to offer advisers – and their clients – access to better products and to make stronger, more informed credit-risk decisions.
“This certainly made our job easier when it came to the actual integration and this tech focus will ensure that it’s a relationship which will flourish now and in the future.”
Jim Robinson, head of strategic partnerships at Evolution Money, said it was “extremely excited” to integrate with OMS and it opened up an avenue for advisers to obtain a DIP with ease.
He added that a smoother customer journey and making sure re-keying information was “thing of the past” was a “win-win situation for everyone”.
OMS completed an API integration with West One for second charge business, and it has integrated with platforms Iress, Twenty7Tech, iPipeline and Knowledge Bank to offer users product sourcing, protection sourcing and criteria sourcing.
The OMS platform has also been adopted by Y3S Loans and will be used alongside the Y3S second charge quotation and application system Lenderlink.
Fleet Mortgages appoints Nicola Richardson as CFO
Lo, who retires in December, has worked with Fleet Mortgages since its launch in 2014.
Prior to that he worked at CHL Mortgages for around 14 years in various roles including finance director, head of finance, treasury and securitisation and chief accountant.
Before that he was group financial controller and finance director at Kestrel Holdings, and was also an auditor at EY, Blick Rothenberg and Credito Italiano International.
Incoming CFO Richardson has been head of finance at Fleet Mortgages for around seven years.
She was previously a treasury accountant at CHL Mortgages for nearly three years, and before that worked at Baker Tilly for five years most recently as an audit supervisor.
The lender has also promoted human resources head Kim Beaven to the role of HR and facilities director and Diane Mitchell will take on the role of credit director. Mitchell was previously head of credit.
Beaven has been with Fleet Mortgages since 2014 and previously worked at CHL Mortgages for around a year. She has also held HR roles at Surry and Sussex Probation Trust, Voyage Care and Solor Care.
Mitchell has worked at Fleet Mortgages since 2014 and before that worked at Capital Home Loans for around 11 years in various roles.
Bob Young, senior executive officer at Fleet Mortgages, said: “Having worked with Sunny for over two decades, it’s somehow hard to believe he will be retiring next month, but he has been a huge part of what we’ve been able to achieve at Fleet, and the entire team here wish him a wonderful and long retirement.”
He praised Richardson, Beaven and Mitchell, adding that to “say they are brilliant at their jobs would be an understatement”.
He added: “We are fortunate to have them and I have no doubt they will continue to be huge assets to the business.”
Fleet Mortgages was acquired by Starling Bank for £50m in July, with all of its mortgages now being funded by Starling’s deposit base.
The firm has recently reached £2bn assets under management for the first time and November was the first full month Fleet originated business for its new funder, with Young adding that it looked like it would be a record month of lending.
He said: “The future therefore looks particularly bright for Fleet and we will have more to say and offer for the rest of the year and into 2022.”
The Mortgage Lender launches self-employed and complex income deal– exclusive
The RL0 product range rates will start from 2.84 per cent and are available across purchase and remortgage categories up to maximum loan to value of 85 per cent.
The range will cater to individuals with complex incomes as their employment status may mean they will struggle to secure a mortgage from mainstream lenders.
According to TML, there are over four million self-employed workers in the UK and that number has been growing in the past year.
The lender added that more borrowers are being classed as having complex income, which can include multiple income streams or variable income, but despite this growing it was still challenging to secure a mortgage.
Steve Griffiths, sales and product director at The Mortgage Lender, said: “The self-employed and those with untraditional income streams are becoming more and more common in the UK but the lending industry has failed to adapt as quickly to this trend.
“Our new RL0 product range will offer competitive pricing for borrowers that don’t have adverse credit history but do have complex incomes. We are pleased to be supporting these customers by taking a real life approach to affordability such as using pre-Covid accounts where appropriate, as well as 100 per cent of bonus and overtime for employed borrowers.”
During the pandemic many lenders tightened their criteria around self-employed and complex income to limit riskier borrowing, which led to concerns that borrowers with non-standard financial circumstances would not be offered a mortgage.
According to a report from the Intermediary Mortgage Lenders Association in October, this has started to change. Now most lenders say they would lend to applicants with more complex needs and income.
However, some brokers disagreed with this view, saying that lenders’ approaches towards self-employed borrowers were overly cautious and even at times dysfunctional.
West One Loans cuts BTL green mortgage rates and refreshes large loan products
In its green BTL mortgage range its two-year fixed rate at 65 per cent loan to value (LTV) stands at 2.99 per cent, down from 3.04 per cent, whilst its five-year fixed rate at 65 per cent LTV has fallen from 3.09 per cent to 3.04 per cent.
At the 70 per cent LTV tier, its two-year fixed rate is now 3.04 per cent, down from 3.09 per cent, and its five-year fixed rate has decreased from 3.24 per cent to 3.09 per cent.
The lender has also added limited edition large loan products for standard and HMO properties, with five-year fixed rates starting from 3.07 per cent. It comes with a 1.5 per cent product fee and is available for loans between £350,000 and £1m.
Limited large loan products are also available for HMOs and MUFBs up to six bedrooms, with five-year fixed rates beginning from 3.38 per cent. Products come with a 1.75 per cent product fee and loans between £350,00 and £1m can be accessed.
West One Loans has also improved its criteria and will now consider new build properties up to 75 per cent LTV without prior referral, up from 70 per cent LTV before.
Andrew Ferguson (pictured), managing director for West One Loans BTL division, said: “These new products and rate changes support our aspiration to become the ‘go-to option’ for brokers in the BTL arena.
“Our continued focus on service delivery and common-sense underwriting, aligned with these product changes, mean we are well placed to support our broker partners and their landlord clients as we move toward the end of the year.”