TMW launches limited company BTL fee-assist remortgages
Four deals are included in the remortgage range. A two-year fix at 3.34 per cent with a £1,995 fee and a £995 fee option with a rate of 3.49 per cent.
For borrowers who want a longer term, a five-year fixed rate at 3.69 per cent is available with a fee of £1,995. The £995 option comes with a 3.84 per cent rate.
Daniel Clinton, head of TMW, said: “Over the last few years, we have seen more and more landlords build their portfolios through limited companies following changes to the tax regime.
“As a leading buy-to-let mortgage provider, we always look to offer a range of competitive mortgages to suit whatever the landlord’s circumstances. These latest products reinforce our support for the limited company market, helping reduce upfront costs for landlords.”
Saffron Building Society returned to limited company buy-to-let lending this week at 75 per cent LTV for purchases and remortgages.
Sellers shy away from property market as new listings fall 12 per cent
New property listings declined in all regions of England except for London while sellers in Scotland and Wales also shied away from the market.
In the first two weeks of January, new listings in Scotland were down around 17 per cent year-on-year with the North East of England and the South West following closely behind.
The momentum of 2020 prevailed in London, however, with new property listings up around 10 per cent driven largely by apartment owners looking to sell up and upsize.
Buyer demand remained 13 per cent higher in the weeks between Boxing Day and 17 January than in the previous year. The number of new sales agreed was eight per cent up on last year.
With a decline in new homes for sale and existing stocks depleted asking prices have risen on average by 4.3 per cent, the highest since April 2017.
Wales has reported the highest growth in prices at 5.4 per cent with Liverpool leading the way at a city level with growth of 6.3 per cent.
Richard Donnell (pictured), director of research and insight at Zoopla, said: “The strength of the market in 2020 has eroded the available number of homes for sale and this will mean continued upward pressure on house prices in the short term.
“The most affordable parts of the UK are recording the highest rate of price growth for 10 years up to 5.4 per cent a year. We still expect house price growth to slow towards one per cent by the end of the year.
“The rush to beat the stamp duty deadline continues and sellers who agreed to buy a home in 2020 would reasonably expect to make the stamp duty saving.”
FCA confirms extension of repossession ban to April
Repossessions, said the regulator, should only be enforced in exceptional circumstances.
The guidance on suspending repossession activity had been due to end on 31 January but following the government’s decision to extend lockdown restrictions and continue the furlough scheme the regulator has changed its rules.
Consumer credit firms, however, will be able to repossess goods and vehicles from 31 January which the regulator wrote in its update reflected the different risks and harms that consumers would face if they lost items on credit compared to a family losing their home.
However, seizing items on credit should only take place as a last resort, according to the latest guidance, and firms should consider the impact their actions will have on vulnerable customers.
Payment deferrals and credit reports
Borrowers have until 31 March to apply for a payment deferral for mortgages, personal loans, credit cards and other types of consumer credit agreements. A break of up to six months in total can be granted.
If the lender and borrower put in place an agreement to repay deferred payments at the end of the payment break, the FCA said it would not expect this arrangement to be reflected on the borrower’s credit file.
If the borrower is not able to agree a payment plan immediately after the payment break has ended because their lender is experiencing operational difficulties and a missed payment is recorded on their credit file, lenders are expected to work with credit referencing agencies to make sure this reversed.
This is expected to only apply to one monthly payment.
The limit for contactless card payments was raised to £45 in April and the FCA has noted that people are increasingly making use of the facility.
The FCA said in recognition of this changing behaviour, as part of a wider consultation, it will be seeking views on amending its rules to allow for a increase in the contactless limit to £100.
MHBS launches remortgage range for capital raising and short-stay let conversion
Rates start from 2.24 per cent and the maximum loan to value (LTV) for the range is 70 per cent if the borrower’s loan amount is above £500,000. For loans between £200,000 and £500,000 the LTV is 65 per cent.
The range has been designed for ‘out-of-the-ordinary’ remortgage cases, the society said.
The remortgage deals can be used to raise money for home improvements, provide a bridging loan exit route or raise funds on an unencumbered property to gift to family members or buy an investment property.
Borrowers can also remortgage to the Market Harborough to obtain consent to let out the property for up to 24 weeks a year.
Like-for-like remortgages on an interest-only basis will also be accepted. If the repayment strategy is to downsize or sell the home, the LTV is restricted to 60 per cent.
The products have a flat £995 product fee with fixed and variable deals available.
Tina Long, new business lead at the society, said: “These new products will help intermediaries find a solution for out-of-the-ordinary remortgage cases.
“With our flexible approach, we consider each remortgage application individually and manually underwrite every case.”
Lenders relax rules over local authority indemnity insurance as stamp duty deadline looms
NatWest has historically only accepted the insurance for remortgages but said from December it is temporarily excepting it for purchase cases.
Skipton has changed its policy for purchase cases where search information is ‘significantly delayed’.
Around 20 councils in England and Wales are reporting turnaround times of between 40 and 60 working days to deal with local authority search requests, according to Searchflow’s website.
York is not currently processing any requests while Bedford and Hackney Borough Councils are quoting 180 working days. Hackney Borough Council was the victim of a cyber attack in November which has left it unable to provide the information.
To help reduce delays that homebuyers in these areas are experiencing, some lenders have agreed to accept the conveyancer’s indemnity insurance in place of the searches.
Alex Beavis, head of mortgage products at Skipton Building Society, said: “Skipton Building Society now accepts indemnity insurance for local authority searches on purchases, to provide an additional option for conveyancers should local searches be significantly delayed due to the exceptional demand associated with the stamp duty rush, plus the added pressures of working through the Covid-19 pandemic .
“This move is designed to take some pressure off purchase chains, keeping the market moving and hopefully helping more borrowers meet the 31 March deadline.”
NatWest said it would also accept the insurance on a temporary basis for purchase cases.
Not all lenders, however, will proceed to completion without the searches which means brokers are having to give their clients an additional mortgage option of a lender that accepts the insurance.
Andrew Montlake, managing director, Coreco, said: “Borrowers who definitely want to complete before the stamp duty deadline are being offered extra choices. We’re showing them the best deal for their circumstances and if necessary an additional deal from a lender that accepts indemnity insurance.”
Barclays and Halifax will accept the insurance if the conveyancer is comfortable going ahead without reviewing information that could affect the property but Santander and Nationwide will not.
Mortgage Solutions has contacted HSBC.
David Hollingworth, associate director, communications, L&C, said: “Together with the search provider we are able to identify cases that will be affected by the delays at an early stage and then consider whether any of those cases could run into issues with the lender if indemnity insurance was used.
“That helped to flag a small number of cases and allow for appropriate action to be taken in placing with a lender that would be able to progress to completion.”
He added: “Skipton’s move to address this issue is a welcome one.”
Calling all lenders
Brokers are calling for more lenders to follow Skipton and NatWest’s lead.
Lea Karasavvas, managing director, Prolific Mortgage Finance, said: “Most lenders are aware of the issue in Hackney and are starting to accept indemnity insurance, but there are still a lot that will not. One way around this is for the buyer to instruct private searches which is when someone goes into the local council offices and has to manually look through the documents but as you can imagine the delay on this can be considerable with some solicitors saying this will take over six months.
“With most buyers wanting to complete by 31 March, this can mean that most people buying in Hackney where the average purchase price is over £500,001 will be stung with an extra £15,000 on their stamp duty bill as they will miss the deadline.
“If possible we need all lenders to take this into consideration and accept the indemnity insurance but they understandably need to listen to their own legal advice on whether they can or not.”
Risk to buyers
Indemnity insurance can be arranged to protect buyers from any search entries that could damage the property value but were not uncovered because the information was unavailable, for example a planned development that would be disruptive to the house. But proceeding without seeing searches can also put the buyers’ safety at risk.
Beth Rudolf, director of delivery, Conveyancing Associations, said: “For the buyer, insurance in place of the authority information is not always a good thing, albeit often worth it to enable their transaction to proceed.
“For example if there was a loft conversion then the buyer might assume that the loft conversion can be safely used as a bedroom when in fact the building control inspection might have revealed safety issues that mean that it can only safely be used as storage.”
Last year, the Conveyancing Association recommended that sellers should obtain the searches when their property is listed for sale that way by the time a buyer has made an offer the information is likely to have been returned and any issues uncovered can be dealt with by the seller cutting out delays.
Estate agent’s ‘£1’ ad receives complaint as sellers face £300 bill to use own solicitor
The advert, which remains on My Online Estate Agent’s home page, has two buttons which say “Sell for just £1” and “Let for just £1” and a large heart which also reads £1.
After clicking on “Sell for just £1” vendors are taken to another screen which in smaller print explains by using the estate agency to sell your home you are agreeing to using its recommended conveyancing partner for a fixed fee of £595.00 excluding VAT.
Homeowners who do not want to use the firm for their conveyancing requirements have to pay £300 to opt out of the service.
The Advertising Standard Agency (ASA) received a complaint that the advert was misleading from a member of the public who knew the company’s conveyancing policy and fee structure.
The ASA approached My Online Estate Agent with the concerns and the company agreed to remove the advert.
A spokesman for the ASA said: “We have received an assurance from the advertiser that it will remove the claim from its website.
“We understand that might take a couple of weeks given some broader changes it is carrying out. Nevertheless, we expect to see the claim removed as soon as possible and will take further action if the advertiser does not comply.”
A spokesman for My Online Estate Agent said: “My Online Estate Agent (MOEA) is fully cooperating with the ASA to resolve the transparency of fees relating to our services.
“In consultation with the ASA we have agreed to make adjustments to the presentation of fees, terms and conditions on the MOEA website that overcome the matter to their satisfaction.
“Some of these changes will be immediate, while others will take a little more time to address. As MOEA are fully complying with the requirements of the ASA no formal action has been brought against MOEA. We are fully committed to ensuring our obligations remain in accordance with the Advertising Code.”
Estate agent adverts banned
The ASA has also issued formal rulings to two other estate agents, Manchestersalerent.co.uk and OverStreet.co.uk for advertising properties for sale that were no longer on the market, banning them from continuing to advertise the homes.
The same four-bedroom detached home was advertised on OverStreet.co.uk and Manchestersalerent.co.uk for sale in July but had not been on the market since 2017.
Both companies were ordered to remove the listing.
Top 10 biggest mortgage broker stories this week – 15/01/21
Tens of thousands of people have signed a petition to ask the government to extend the stamp duty holiday, as conveyancers warn of a completion ‘lottery’ for homebuyers.
Meanwhile, two new tech launches for first-time buyers hit the market and brokers were told to make their buy-to-let clients aware of the landlord licensing scheme.
Here are the stories that made the top 10 this week on Mortgage Solutions.
Nationwide cuts dozens of rates including 90 per cent LTV deals
Brokers should flag landlord licencing scheme to buy-to-let clients – Popat
Petition to extend stamp duty holiday reaches 73k signatures
Conveyancers warn completion ‘lottery’ requires urgent stamp duty holiday extension
HSBC launches 90 per cent LTV deals and cuts rates on other tiers
Barclays rate cuts level five and two-year deals at 90 per cent LTV
NatWest stops new lending to European customers without confirmed settlement status
Mortgage tech tools to boost first-time buyer savings unveiled
There are ‘lots of issues’ with negative interest rates – Bailey
Persimmon revenues dip as buyers wait for revamped Help to Buy scheme
More high LTV lending is just one side of the story for first-time buyers – Bamford
Let’s be frank – high LTV lending has not been top of the lending charts for many in the mortgage community over the past 12 months.
Moneyfacts data suggests the number of 90 per cent LTV products has increased month-on-month by 72 to 160 in January, as a number of lenders launched back into the sector over the course of the last few weeks.
But greater product provision is just one part of the purchase equation, particularly for first-time buyers.
According to Halifax the average UK house price is now over £253,000 – up from £241,000 in July last year.
You don’t need to be a genius to work out that securing a 10 per cent deposit is going to cost you the best part of £25,000, plus average two-year fixed-rate mortgages at 90 per cent have risen from 1.99 per cent in July last year to 2.52 per cent now.
Greater deposit requirements and higher monthly payments are going to put further pressure on those trying to get on the housing ladder for the first time.
However, we can’t deny there is greater product choice now. Using the Halifax data, first-timers currently have their pick of 95 products of varying lengths.
There would be 34 options if you were just looking for a two-year fixed-rate product.
This good news is tempered somewhat by the continued dearth of options for those who only have a five per cent deposit – traditionally, the go-to deposit choice for first-timers.
At the moment there are only six product options available. So you can see why it’s pretty much 10 per cent deposit or nothing.
Wait it out
Many first-timers may be choosing to wait it out particularly if house prices do fall as many organisations and institutions suggest they will during 2021.
However, and this is something advisers will no doubt be telling clients, house price falls of single digits are unlikely to make a huge difference to them.
Which leads us back to high LTV product provision. What else can lenders do at 90 per cent and might they be willing to look at 95 per cent LTV deals?
Perhaps by using private mortgage insurance they might. After all, the government scheme to support first-timers doesn’t look like appearing anytime soon.
This was always likely to be a slow march back to normality. Lenders look like they are more willing to embark on that trek to 90 per cent in 2021, but the 95 per cent LTV peak still looks much further way.
For now, those borrowers who would like to buy with a five per cent deposit may have to wait until after the stamp duty holiday has finished, when any significant drop off in purchase activity may be filled by lenders more willing to lend to those with smaller deposits in order to secure business.
Until then, a slow move back up the mountain is I suppose, better than staying at base camp.
Mortgage lending tipped for best year since 2007
If the market achieves this level of mortgage lending it will mark the best performance since 2007.
Gross mortgage lending in 2020 is estimated to have reached £241,600. And following an expected strong performance this year, gross lending is forecast to rise to £286bn in 2022.
IMLA predicts buy to-let lending will rise from £38bn to £40bn this year and £41bn in 2022.
In the trade body’s latest report, New Normal, it predicts a swift return to household spending when lockdown restrictions are eased this year and the avoidance of a mortgage arrears crisis.
As household consumption was constrained in 2020 because of social distancing and lockdown measures families built up cash balances of £222bn between February and November, an average of £13,400 for a family of four. The cash reserves will give families spending power when lockdown restrictions are lifted in the spring helping to revive industries such as hospitality and leisure, said IMLA.
At the end of 2020, mortgage borrowers on payment deferrals had fallen from a peak of more than 1.8 million in June to 127,000 by 20 November.
The number of mortgages in arrears of three to six-months continued to fall in the third quarter of 2020 to 0.28 per cent of all loans – the lowest figure since current records began.
IMLA said this combination of factors suggested that the UK’s mortgage market will not face an arrears crisis in 2021.
Kate Davies (pictured), executive director IMLA, said: “Many have predicted doom and gloom for the housing market since the crisis began. However, our analysis shows there is room for more optimistic thinking.
“Since the first lockdown back in March, the mortgage market has shown remarkable resilience. Spending more time at home has led many to reconsider their living arrangements, helping to boost demand for homes across the UK. This surge in interest has been supported by the Government’s stimulus package, which in most cases has helped to support individuals far better than has been the case in previous financial crises.
“The combination of these factors leads us to believe that 2021 will be a year of modest growth for the housing and mortgage markets.”
Mortgage tech tools to boost first-time buyer savings unveiled
Barclays has added a first home savings tool to its app to help borrowers hit their deposit goals.
Users can create a ‘first home’ savings goal in their Barclays app and set up a regular transfer to an existing savings account.
They will receive regular updates on their progress, advice on setting the goal through the First Home Savings Calculator and access to mentors and mortgage advisers who can give them practical pointers on saving.
The second tool is the result of partnership between Mojo Mortgages and fintech app Snoop, a savings and budgeting tool that uses open banking technology.
The app can spot if users are overpaying on their bills and help them to get better deals on energy and mobile tariffs, for example. It can also point users towards better deals on their food shopping to help them build up their savings pot.
And in partnership with Mojo, the app will show users the best time to remortgage and provide first-time buyers with the best mortgage deals in their news feed.
Richard Hayes, chief executive and co-founder of Mojo Mortgages, said: “There’s no doubt times are tough right now with some lenders limiting high loan to value mortgages, but this partnership helps to fight that.
“It not only makes you more aware of your financial situation, but crucially shows you the options that are still available to you – options many people may be totally unaware of. Plus, you get access to free, expert advice at the click of a few buttons.”
‘Reversal of fortunes’
First-time buyers were shown little love by the banks in 2020, as equity rich borrowers benefitted from the lion’s share of mortgage deals and low rates.
At the start of the pandemic lenders retreated from high loan to value lending firstly because of lockdown restrictions and the challenges posed by working from home.
The next blow to high LTV lending came when the housing market reopened in May and the government decided to increase the nil-rate stamp duty threshold up to £500,000 in England.
Lenders were overrun with applications and forced to reduce their ranges to cope with capacity. This saw deals for borrowers with a deposit of 10 per cent or less almost disappear.
Analysis by Reallymoving found the first-time buyer market contracted by 12 per cent between July and December, compared to the previous year.
However, towards the end of 2020 banks and building societies began to return to 90 per cent lending.
Earlier this week, Moneyfacts reported the number of products available at 90 per cent LTV had reached a six-month high.
Reallymoving chief executive Rob Houghton believes first-time buyers could experience a ‘reversal of fortunes’ in 2021.
He said there were reasons for new buyers to be optimistic with lenders returning to the market, a likely slow down in competition for homes when the stamp duty holiday ends, and house prices potentially re-adjusting downwards.