Canada Life cuts rates and ups LTVs on BTL products
Interest rates for the lender’s buy to let and second home Lifestyle and Voluntary Select products have reduced from 6.16 per cent and 6.36 per cent to 5.78 per cent and 5.98 per cent respectively.
Landlords and property owners over 55 can see a five per cent increase to the maximum LTV for Canada Life’s buy-to-let and second home products.
The LTV for customers aged 55 will rise to 19 per cent, while those aged 70 will be able to apply for a maximum of 34 per cent, which increases to 44 per cent for customers aged 80 and over.
Canada Life Home Finance head of marketing and communications Alice Watson said: “We know that property wealth increasingly plays a key role in supporting homeowners’ retirement lifestyles.
“Our customer data shows that people use our buy-to-let products for a range of reasons, from increasing their retirement income to paying for care fees.”
She added: “Regular market innovation has seen the number of later life lending products more than double in the space of a year.
“This has given property owners the flexibility to tap into their property wealth just as easily as their pension pot or savings, helping bring it into mainstream financial planning.”
Estate agent fined £80k for exposing thousands of customers’ personal data
Data exposed included 18,610 individual’s personal information such as bank statements, salary details, copies of passports, dates of birth and addresses of tenants and landlords.
The security breach happened when London firm Life at Parliament View (LPVL) transferred personal data from its server to a partner organisation and failed to switch off an Anonymous Authentication function.
This failure meant access restrictions were not implemented and allowed anyone going online to have full access to all the data stored between March 2015 and February 2017.
Catalogue of security errors
During its investigation, the ICO said it uncovered a catalogue of security errors and found that LPVL had failed to take appropriate technical and organisational measures against the unlawful processing of personal data.
In addition, LPVL only alerted the ICO to the breach when it was contacted by a hacker.
The ICO concluded this was a serious contravention of the 1998 data protection laws which have since been replaced by the GDPR and the Data Protection Act 2018.
Exposed to identify fraud risk
ICO director of investigations Steve Eckersley noted that customers had the right to expect the personal information they provided to companies would remain safe and secure.
“That simply wasn’t the case here,” he said.
“As we uncovered the facts, we found LPVL had failed to adequately train its staff, who misconfigured and used an insecure file transfer system and then failed to monitor it.
“These shortcomings have left its customers exposed to the potential risk of identity fraud.
“Companies must accept that they have a legal obligation to both protect and keep secure the personal data they are entrusted with. Where this does not happen, we will investigate and take action,” he added.
Mortgage Solutions has contacted LPVL for comment.
The firm has until 15 August to pay the fine and if it does so before 14 August it will receive a 20 per cent discount.
Metro Bank confirms potential sale of loan portfolio
There has been significant speculation the lender was looking to offload part of its book after regulators found it had underestimated the risk level of around £1.7bn of its £4.1bn commercial and buy-to-let loans.
In early February the lender pulled its range of portfolio commercial buy-to-let (BTL) products.
Then in May Metro Bank raised £375m in capital from shareholders through a discounted share offer to cover further capital requirements for the underestimated loan book.
However, the bank is now also looking to further improve its capital position by selling part of its mortgage book.
According to reports from Sky News over the weekend, a deal worth around £500m is set to be completed with US hedge fund Cerberus Capital Management.
The lender has previously bought more £1bn of assets from Cerberus .
The report added that the deal could be completed by Wednesday, when Metro’s half-year results are due.
Discussions ‘taking place’
In its statement, Metro Bank said it was aware of the recent press speculation regarding a potential disposal of a loan portfolio.
“The company regularly assesses various opportunities in the market and accordingly confirms that discussions regarding the potential sale of a loan portfolio are taking place,” it said.
“There can be no certainty at this stage that an agreement will be reached. A further announcement will be made if and when appropriate,” it added.
Equity release lending hits £2.38bn in 2019 but growth slows – Key
Figures from its market monitor suggest an increase of 5.6 per cent in the number of plans sold to 22,126, while the total value released edged up by three per cent to £1.68bn.
In contrast, over the whole of 2018 plan sales rose by 21 per cent and the value released by 19 per cent.
Once potential further advances of £706m on drawdown are taken into account, Key’s data suggested that the first six months recorded total borrowing of £2.38bn.
Average loans taken by customers also slipped in value by nearly £2,000 to £76,064 compared with the same period a year ago as the market stabilised in the face of continued political and economic uncertainty.
Key said this suggested that “the sector is reacting to current economic conditions seen across the property market and growth has slowed”.
However, there was more positive sentiment from the period with new funders entering the market and historically low interest rates.
The biggest single use of property wealth remained home or garden improvements factoring into 64 per cent of transactions, while 28 per cent of borrowers made gifts to family typically to help with house purchases or weddings.
But up to half of all customers used equity release to repay debt – either in the form of mortgages (20 per cent) or unsecured debt (30 per cent) as people increasingly looked to housing equity to shore up their finances.
Subdued first half
Will Hale, CEO at Key, noted that against the backdrop of economic uncertainty, the equity release market had seen a subdued first half with slower growth than in recent years.
“While the key market drivers of low pension saving and substantial property wealth remain, the over-55s are taking a cautious approach to accessing the value tied up in bricks and mortar at the moment but as confidence returns we do expect the market to pick up,” he said.
“That said, the market is benefiting from the arrival of new sources of funding which is helping to keep rates at historic lows and to drive the launch of various new products.
“Consequently, we have seen an increase in the number of customers remortgaging to benefit from lower rates or the opportunity to release additional equity due to house price rises or the higher loan to values (LTV) that are now available.”
Which? Mortgage Advisers closes to new customers
A two-month consultation was launched in May proposing to close the mortgage and insurance advice businesses.
As it stands, 99 redundancies planned with around 70 of these roles finishing immediately, while the other 30 roles will play a part in the gradual wind-down of the business over the coming months.
Mortgage Solutions understands an update to the consultation was released yesterday, and a notice has now been placed on the Which? Mortgage Advisers website announcing the new business closure.
It says: “Which? Mortgage Advisers are unfortunately unable to accept any new customers. We apologise for any inconvenience.
“Existing customers can still contact us on 01174 566027.”
A Which? spokesman told Mortgage Solutions: “Following an internal strategic review and consultation process, we have made the difficult decision to close Which? Mortgage Advisers and Which? Insurance Advisers.
“All affected employees have been informed and we are in the process of contacting our customers about ongoing support with their mortgage and insurance products.”
Fiduciam expects to double women in senior management in 18 months
The short-term lender said its overall current team was a near 50-50 male-female split, however it acknowledged that women formed only 16 per cent of its senior management team, although it expected this to double in the next 18 months.
Fiduciam said its equality strategy had proved successful in business brought in and noted that its team in Spain was entirely female.
“There is a still larger gender gap in the finance industry in Spain than there is in the UK, and this has enabled Fiduciam to attract top calibre Spanish employees while providing them with a platform to grow and flourish, both professionally and personally,” it said.
Fiduciam added that when interviewing candidates, men and women and employees of several backgrounds and nationalities are involved.
“This intentionally helps to break any subconscious bias that may influence its recruiting so that they always employ the best person for the job, regardless of gender,” it added.
Held publicly accountable
Signing up to the charter was originally proposed by head of case management Marieke Eskens (pictured).
“All of our colleagues were very supportive when we introduced the idea of signing up to the charter as all welcomed the idea to publicly affirm how seriously Fiduciam takes gender equality,” she said.
“The charter really does put a mark in the sand as to where a firm stands on this subject and more organisations should not be afraid of being held publicly liable for their gender equality goals.”
CEO Johan Groothaert added that the company had signed the charter to be held publicly accountable for its equality and gender diversity practices.
“We believe that diversity and inclusiveness in our workplace are conducive to a successful and dynamic business environment,” he said.
“As a growing international business with employees from 15 different countries speaking twenty different languages, diversity and gender equality are integral parts of our culture.
“We also believe that the Women in Finance Charter is a fundamentally important initiative to broaden the diversity of financial services companies across the UK.
“The more companies sign up to initiatives such as these, the more it influences other firms to do the same thing, providing better career opportunities for women but also a better outcome for society as a whole.”
Sam Kirtikar steps down as Clever Lending CEO – exclusive
Kirtikar (pictured) told Specialist Lending Solutions that he believed the time was right to take a break and then seek a new challenge within the market.
He has been at the organisation for six years, building the Clever Lending and Clever Mortgages businesses and taking them to their present standing.
“I’ve felt like a change was needed and it now feels right to take on a new challenge,” he said.
“Both the firms are in a really strong position and the group has a clear succession plan in place.”
Competing with the big boys
Kirtikar emphasised that it would be business as usual with no other changes occurring.
“I’m proud of the team that we put in place here and there won’t be any changes to our service,” he continued.
“And I’m proud that we have been competing with the big boys in specialist lending despite being new to that market.”
On a personal level Kirtikar will be taking a break over the summer to spend time with his family, but aims for a return to the market in the autumn.
“Now is the time to take on something different and I will be assessing the options in front of me, but I’ll definitely stay in the industry.
“I wish Clever Lending and Clever Mortgages all the best for the future and am confident they will continue with their growth strategy,” he added.
Paragon cuts rates and adds 80 per cent LTV deals
The lender is cutting interest rates on various products by between 10 and 20 basis points.
The new range contains two- and five-year fixed rate mortgages for portfolio landlords and five-year fixed rate mortgages for non-portfolio landlords.
It includes no up-front fees and £350 cashback on selected deals, with portfolio products available to individuals, limited companies and limited liability partnerships.
Portfolio offerings include a five-year fixed rate mortgage at 3.70 per cent for landlords with single self-contained units (SSCs) and one at 3.75 per cent for landlords with houses in multiple occupation (HMOs) or multi-unit blocks (MUBs).
Paragon director of mortgages John Heron (pictured) said: “Interest rates on new mortgage products have rarely been as competitive across the market as they are today.
“By cutting up-front costs and giving landlords flexibility to manage other expenses using cashback, we’re demonstrating our commitment to enabling the widest possible access for customers.”
Furness BS launches retention proc fees for product transfers
Brokers can conduct the product transfer through the mutual’s online mortgage application system.
It noted that this step was the latest enhancement to its online capability which also includes document submission, SMS updates and a customer portal for payment of fees.
Alasdair McDonald, head of Furness for Intermediaries, said the lender would continue to contact its existing customers prior to the maturity of their current mortgage deal and will let them know it is happy for them to switch to a new deal through a mortgage broker.
“We’ve worked hard to get this project off the ground because we acknowledge the effort brokers put in to making sure their customers get the best deal,” he said.
“We’ve tried to make this as easy and seamless as possible, not only the product transfer process, but also with the range of fee free products available to our existing customers.”
Lendy administrators reveal loan book insolvencies, AML issues and property transfer concerns
Serious questions have also been raised about Lendy’s anti-money laundering practices, the transfer of ownership of the firm’s premises, and how it was remunerated for administering the platform and loans.
Director Liam Brooke’s (pictured) conduct in the lead-up to the administration is also being reviewed following legal requirements.
Lendy investors have been warned they are likely to receive just half their money back from the outstanding loans – and some could get almost nothing back.
Overall, before costs are deducted, investors are expected to receive an average of around 57p and 58p in the pound from the development finance and bridging loan books respectively.
However, individual loan recovery rates could range substantially between 7p to 100p of the capital provided by investors.
Development values ‘substantially lower’
The estimates were released by administrator RSM to creditors and revealed the shocking state of the loan books.
In total, Lendy has 54 outstanding bridging and development finance loans worth a combined £152m, with 36 in insolvency proceedings.
The development finance book has 25 live loans worth £116m and a total gross development value (GDV) of £226m, with 14 in the insolvency process.
However, the administrators warned that many of these assets are only partially completed and “consequently the current valuations obtained by the company are substantially lower than the reported GDV values”.
Of the remaining 11 loans, more are expected to enter into insolvency, but the administrators believe it should be possible to refinance elements of the remaining portfolio.
Bridging book ‘undermined’
The bridging loan book makes similarly grim reading, with 29 live loans worth £36m but 22 of these are in insolvency proceedings.
The loans were secured against assets valued historically at £81m, however the administrators again warned that current reported values are significantly lower.
“Some of the schemes were dependent on subsequent securing of development finance and planning permissions,” the report said.
“The inability to secure new finance to refinance the Lendy loan or secure appropriate planning consents appears to have undermined the rationale behind some of these loans.”
The administrators added that there was a notable concentration of assets in Scotland with £10m secured against Scottish assets, and they also expect some of the seven currently solvent schemes will be dragged into insolvency.
Payments and transfer of property
The administrators also raised concerns about how the ownership of the company’s offices was transferred in October 2018 along with other dividend payments which are under investigation.
“We are investigating the sale and transfer of the company’s trading premises to a fellow group company, Brankesmere Limited, which was transferred in October 2018 for £861,929, as well as the other distributions made to the company shareholders,” the report said.
“In addition, various other matters have been brought to our attention from our discussions with Investors, creditors and the FCA.
It added: “At this stage, due to the confidential nature of these investigations no further information can be provided to the wider body of creditors and investors so as not to prejudice our position should we need to issue court proceedings.”
And investigations are being undertaken into how Lendy was paid for administering the platform and loan book, despite there not appearing to be any formal agreement to do so.
Anti-money laundering compliance
Issues with the anti-money laundering (AML) process were further highlighted by RSM.
“Before the joint administrators release any funds to investors they are required to ensure compliance with appropriate AML legislation,” the administrators said.
“An initial review of the company’s existing AML and client take-on procedures has noted certain deficiencies that have required further investigation.”