Second charge lending surpasses £1bn mark – Loans Warehouse

Second charge lending surpasses £1bn mark – Loans Warehouse


This benchmark was hinted at in the Loans Warehouse report for October.

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 Financial Conduct Authority (FCA) regulation. The previous peak was in 2019 at £118m.

The Q4 figures mean second charge lending witnessed its highest period of lending since 2008 and has hit a post-credit crunch record with an 11.49 per cent increase on the previous month.


Year-on-year increase

However, November’s figure exceeded October’s peak as lending totalled £137.8m, with a year-on-year increase of 71.67 per cent.

The month also saw the number of loans written break the 3,000 barrier for the first time since 2008, with the 1,000 annual rise proving to be another post-credit crunch record.

The average completion time increased slightly in December but considering the growth in the last two months, it is widely considered that lenders’ service levels are being met and the increase is more reflective of delays caused by a Land Registry backlog.

Consolidation and home improvements accounted for 32 per cent of second charge loans, while consolidation alone made up 43 per cent of lending which was the largest share. Home improvements alone made up 18 per cent of second charge loans in November.

Canada Life enhances lifestyle select product range

Canada Life enhances lifestyle select product range


The provider is also opening the lifestyle select gold plus to customers aged 55-59 and decreasing interest rates on its existing product range.

The lifestyle select product range allows customers to unlock tax-free cash from their home with the option to let the interest roll-up or to voluntarily repay up to 10 per cent of the initial loan amount each year.

Customers will also have the ability to hold funds in a cash reserve facility.

The interest rate on the lifestyle select ultra lite product is 2.68 per cent while the lifestyle select super lite is 2.72 per cent, respectively.

The lifestyle select lite is offered at 2.80 per cent with lifestyle select gold at 3.00 per cent. The lifestyle select gold plus is 3.55 per cent.

Loan to value (LTV) tiers have also been made available on lifestyle select gold plus to customers aged 55-59 ranging between 21 to 25 per cent.

Alice Watson (pictured) head of marketing, said: “Our award-winning range of home finance products have become more flexible with the launch of two new lifestyle select options.

“Expanding our LTVs to cover those aged 55-59 will also allow us to provide options to younger customers who are looking to access their equity to boost their retirement income or perhaps make necessary improvements to their home or garden.

“As with all our lifetime mortgages, this product range allows people to continue living in their homes, while releasing the money tied up in their property.”


WeCare virtual launch

Canada Life have also launched a virtual health and wellbeing service, WeCare, to existing and new customers at no additional cost.

WeCare provides home finance customers with a comprehensive range of virtual health and wellbeing services. The service provides 24/7 access to professionals who can provide virtual GP appointments, mental health support and legal or financial guidance.

WeCare is available to customer’s immediate family members, allowing them to personalise services. While services are free to use, there is a cost for private prescriptions ordered through the 24/7 GP consultation.

Watson said: “We are thrilled to be able to roll out WeCare to each of our home finance customers and their families. The service provides immeasurable support from qualified experts at some of the most difficult times in our lives.”

Equity Release Supermarket expands operations with group platform

Equity Release Supermarket expands operations with group platform


The new online hub – housing ERS, Compare Equity Release and Equity Release Partners – caters specifically for advisers, for partners, for lenders and for customers.

Mark Gregory (pictured) founder and chief executive officer, said: “Our mission and focus has always been committed to making the equity release landscape more transparent, consumer-friendly and will help equip customers with tools, knowledge and details.”

“However, with new innovations and further expansion we’ve been able to take this a step further, making enhanced improvements and additions with the launch of our group platform.”

Launch of smartER

News of the firm’s growth comes shortly after ERS launched smartER – the UK’s only intelligent search engine tool within the sector. 

Gregory added: “smartER was three years in the making as we recognised early on that the equity release industry didn’t cater for consumers who want to research their options in their own time.

“It was as though the equity release industry believed that consumers shouldn’t be given the opportunity to develop their own understanding, which we know from our research is a huge frustration and a reason why some are sceptical about equity release.

“Since smartER hit the market in September, it has generated close to 30 per cent of our ‘calculator’ related website page views.”

Across the equity release distribution channels, ERS has helped over 16,000 people through releasing £1.4bn in equity.

Atelier adds to management team

Atelier adds to management team


The lender is preparing to make a raft of further announcements next year and is currently finalising plans to significantly scale its operations and assets under management throughout 2022.

Simon Joseph has joined Atelier’s new business development team as origination manager.

Before joining Atelier, Joseph worked for six years as a specialist in the mezzanine finance space, where he supported brokers and borrowers in the development market. 

Joseph said: “Atelier’s dynamic approach to lending has comprehensively reshaped the UK’s development finance market. I’m excited to be joining its experienced and committed team as we look to grow our loan book rapidly in the New Year.

“Forging lasting relationships and offering a transparent, personalised service have been key to Atelier’s success. My focus is the ongoing drive to build on our reputation for speed of decision-making and certainty of execution.”

A further addition to the team is Rav Kudhail (pictured), who joins as lending manager having previously worked for Hampshire Trust Bank in a similar role. Kudhail will be tasked with building Atelier’s developer channel with a focus on the Midlands and the South East, where he has an existing network in the residential development sector.

Joseph and Kudhail will work alongside director of origination Martin Gilsenan.

Gilsenan said: “Simon and Rav are both experts in their field and they share our vision of Atelier’s future.

“The origination team has been central to Atelier’s rapid growth, and we look forward to making further additions to our talent roster in 2022 as the brand expands its footprint and ramps up its lending volumes.”

Together sees second charge loan spike amid industry-wide growth

Together sees second charge loan spike amid industry-wide growth


The lender said that the increase was driven by homeowners making home improvements.

Commentators suggest figures released in full tomorrow, will show second-charge lending approaching £140m in November. This is the highest since 2009.

Second charge lending has also now surpassed the £1bn lending mark for 2021, which was hinted at in its report for October. 

Scott Clay, distribution director for Together, said: “Mortgage rates have remained at historic lows so, while many people want to release cash from their home for improvement projects, they wouldn’t necessarily want to remortgage, as they’d potentially lose that favourable rate plus, they may possibly have to pay hefty early repayment charges.

“This wouldn’t make sense if they just need say £10,000 or £20,000 for home improvements and to consolidate unsecured debt at what may be a lot lower rate of interest. Instead, it looks like many people are deciding to take out a second charge secured against their home to do the work and pay back the second charge payments alongside their monthly mortgage payments.”

Matt Tristram (pictured) managing director at Loans Warehouse, added that 85 per cent of second charge loans in November were for home improvements and debt consolidation.

In its October report, consolidation loans made up around 46 per cent of loans offered, followed by consolidation and home improvements at around 30 per cent and home improvements at around 19 per cent.

Tristram added: “The Covid pandemic and successive lockdowns seems to have given people the impetus to carry out home improvements on their properties, as well as paying off unsecured debt. Previously, second charge borrowing was seen as expensive but we’re now seeing record low rates so it’s an increasingly viable option.”

Interest rates for second charge loans tend to be higher than for traditional mortgages, as they pose a greater risk for the lender. However, rates are currently at an all-time low with some deals available at below four per cent, meaning they’re becoming increasingly popular.

Buildloan and Furness launch self-build products for NW applicants

Buildloan and Furness launch self-build products for NW applicants


The products offer local self and custom builders in the LA postcode area a rate which is 0.3 per cent lower than the comparative products in the range as well as a free valuation.

The two products offer a two-year arrears stage payment, discounted with an initial pay rate of 3.65 per cent and a product fee of £1,500 and a two year advance stage payment discounted, with an initial pay rate of 3.99 per cent and a product fee of £1,500.

Chris Martin, head of product development and underwriting at Buildloan, said: “These new products offer great features including guaranteed stage payments being agreed as part of the application to give clients the peace of mind they really need that funds will be available at the right time.”

Alasdair McDonald, head of intermediary mortgages at Furness Building Society, added: “Supporting the self- and custom- build sector through our relationship with Buildloan continues to be an integral part of our lending strategy.

“We’ve designed these products with Buildloan to offer features that meet self-builders’ specific needs – funds available when needed during the build, the flexibility of no ERCs and a range of follow-on products available when the client’s build is complete.”

Funds are available on an advance or arrears stage payment basis offering even more cashflow benefits, particularly to those choosing modern methods of construction like offsite manufactured timber systems.

There are no early repayment charges and a £1,500 completion fee applies to each product.

Furness self-build products are available exclusively through Buildloan and borrowers benefit from guaranteed stage payments throughout the build which are directly linked to the cost of each element of their project, rather than site value.

Recognise Bank appoints Paul Beadle as communications head

Recognise Bank appoints Paul Beadle as communications head


He has over 25 years’ experience in financial services, and will report to deputy chief executive, Bryce Glover.

Beadle was most recently an associate director at financial PR agency, MRM, for around three years where he managed clients including Barclays Wealth and Investments, Shawbrook Bank and fintech investment platform, eToro.

Prior to that he worked at NFU Mutual, Bottle PR and NHS programme Getting It Right The First Time. He was also previously head of external affairs for consumer and social media at Nationwide Building Society for around six years.

Beadle (pictured) began working with Recognise at the start of the year, where he managed the firm’s media relations and social media through a successful funding round, the lifting of deposit restrictions by the regulator and the launch of its first range of personal saving accounts.

He now takes on the PR and media relations role full-time and will oversee internal communications and social media. He will also be responsible for developing the communications strategy around the launch of the bank’s business savings accounts, which it plans to launch at the start of next year, and other business lending products.

The bank launched just over a year ago and is aimed at the small business sector. It recently entered into the professional buy-to-let segment and partnered with Rent Chief to offer property investment tools.

Beadle said: “It’s an exciting time to be launching a new bank, especially one that has set out to support the UK’s SMEs, which is an economically important and vibrant sector itself.

“I bring a wealth of experience of working in the highly regulated banking environment, as well as the fast-paced entrepreneurial approach of the fintech sector, a perfect mix to raise the profile and brand awareness of Recognise.”

Glover said: “I’m really pleased to have Paul fully onboard because he brings experience and passion to the communications role.

“As a new entrant into the sector, we have ambitious plans to change the face of business banking, so Paul’s understanding of traditional media and digital channels will be vital to help us stand out and reach small businesses.”

UTB adds Hometrack’s AVMs to bridging broker portal

UTB adds Hometrack’s AVMs to bridging broker portal


It will allow brokers submitting enquiries and decisions in principle (DiPs) through the portal to carry out a Hometrack AVM search 24 hours a day and to obtain an instant pass or fail indication, as well as an accurate valuation at the point of submitting the enquiry to UTB.

UTB said that that it was an industry first as no other bridging lenders currently offered AVM integrations in their online portals. It added that feedback from brokers who had trialed the system before a full launch had been “very positive”.

Chetan Hirani, adviser with Fluent Bridging, said: “It’s quick and easy and not having to wait for the lender to confirm if the AVM has passed not only accelerates the process but is a great selling point for clients. We can tell them straight away it has passed, get the DiP and ESIS and quote them much faster.

“Equally, if the AVM comes in lower, we can adjust the figures and liaise with the client to see if they could manage a lower loan amount to avoid a full valuation. Either way it keeps the process moving quickly which as we all know is critical in bridging.”

The service speeds up the production of terms and DiPs enabling brokers submitting “self-service” applications to proceed quickly with greater speed, accuracy and certainty.

Gavin Diamond (pictured), director of bridging at UTB, said: “At UTB we are constantly looking for ways to make bridging applications simpler, quicker and to give as much certainty as possible from early in the process.

“By integrating Hometrack AVM searches within UTB’s bridging broker portal brokers can very quickly see if the property valuation is going to support the application they’re making, enabling them to proceed quickly or rethink their options.”

He added: “We believe that this latest enhancement, especially when combined with our fast-track service, provides a quick application, decision and completion process with offers made within 24 hours and funds available to draw just a few days later.”

Earlier this year the lender launched a fast-track bridging serviced with a specific team and underwriting process to speed up turnaround times of “straightforward bridging applications”.

Mortgage lending to peak at £316bn this year predicts UKFI

Mortgage lending to peak at £316bn this year predicts UKFI
The total number of housing transactions will reach 1.5m this year, 47 per cent higher than 2020 and the highest number since before the Global Financial Crisis. The main driver of lending in 2021 will be for house purchase at £200bn, up 53 per cent on 2020, whereas remortgaging activity will be slightly down on last year at £62bn.

BTL and residential sector

Buy-to-let (BTL) activity has followed a similar path to the residential sector, with purchase activity increasing to £18bn, up 83 per cent on 2020.
While the 2022 and 2023 gross lending figures will be reductions on the 2021 peak, they are notably higher than the 2020 and 2019 figures and represent a return to more stable levels of activity.

Despite demand stimulus from the stamp duty holiday no longer being a factor boosting house purchases in 2022, UK Finance says “other Covid-19-triggered behavioural changes”, most significantly the resurgence in home mover numbers following a decade of stagnation, are likely to provide some continued impetus.

Outlook over the next two years

James Tatch, principal, data and research at UK Finance, said: “2021 has been a record year for mortgage lending amid the stamp duty holiday and homeworkers moving from cities.

“The outlook for the housing and mortgage markets over the next two years is for a return to more stable, balanced picture following the upheavals of the last two years.

“While risks remain, both to new lending and ongoing affordability, the market looks to be emerging from the pandemic in a better place than previously anticipated, supported by a much-improved wider economic outlook.”

Market overview: a return to moderate growth

The housing market will inevitably soften in 2022 compared to this year, as the demand stimulus from the stamp duty holiday will no longer be a factor boosting house purchases. However, other Covid-19-triggered behavioural changes, most significantly the resurgence in homemover numbers following a decade of stagnation, are likely to provide some continued impetus.

The Q3 Household Finance Review showed that homemover activity has been reinvigorated after a decade of stagnation by changing attitudes to working from home, particularly as remote working is now embedded in many businesses’ longer-term policies.

The lack of a daily commute for many existing homeowners who were previously constrained by relatively low levels of equity with which to “staircase up” the housing ladder within the city they work means they can now consider different locations where their existing equity will go further.

Meanwhile, refinancing activity will pick up modestly next year but accelerate somewhat in 2023, as higher volumes of fixed rate deals, including five-year deals taken out in 2017, are set to end and the loans become eligible for refinancing.

In general, the outlook for both lending and ongoing mortgage affordability is much improved compared to forecasts made a year ago.

Rising inflation

Additionally, rising inflation will put a squeeze on real incomes next year, and this will bear down on affordability as measured in income-expenditure assessments for mortgage applications.

The potential for bank rate increases over the next two years would also place pressure on affordability, although the extent of any increases (and the resulting pressure on affordability) is likely to be relatively modest and affordability tests would make these manageable for borrowers on variable rates whose household budgets are otherwise stable.

Pressures on ongoing affordability will see arrears increase modestly

The same factors will place upwards pressure on ongoing mortgage affordability. However, around three quarters of outstanding mortgages are on fixed rates and would see no immediate impact on their payments should rates increase.

Additionally, a much-improved labour market outlook, compared to predictions made this time last year, means arrears are expected to rise only modestly, peaking at just over 100,000 cases in 2022.

Atom Bank offers exclusive near-prime products through L&G Mortgage Club

Atom Bank offers exclusive near-prime products through L&G Mortgage Club


The options are suitable for those with imperfect credit scores, such as borrowers who may have missed a payment, as well as those with a past county court judgement or default.

The first product is available at up to 60 per cent loan to value (LTV) and is priced at a rate of 2.45 per cent. The second option offers up to 65 per cent LTV, with a rate of 2.69 per cent.

There is also an up to 70 per cent LTV product with a rate of 2.74 per cent and a 75 per cent LTV option at 2.89 per cent. All four products offer £250 cashback.

Danny Belton, head of lender relationships, Legal & General Mortgage Club said: “The unprecedented economic challenges caused by the global pandemic clearly demonstrate the importance of offering a varied and accommodating range of products for borrowers.

“We are therefore proud to announce these new product exclusives with Atom Bank which are tailored to support those with credit impairments, and we look forward to expanding our offering in the coming months.”

Paula Mercer, head of lending and digital mortgages at Atom Bank, said: “Our near prime mortgages are built for customers with less-than-perfect credit.

“We are delighted to offer Legal & General advisers access to an exclusive range of near prime products, opening up the market to those who may have trouble securing a mortgage from a traditional lender.

“The range allows us to support borrowers who have had previous financial difficulties, such as CCJs, defaults, and missed payments.”