A fifth of Paragon BTL borrowers took payment holiday at pandemic height – results
Just over 20 per cent of the group’s buy-to-let customers took payment holidays when offered, with five per cent still on payment holiday at year-end, falling to less than one per cent by the end of November.
Arrears on the buy-to-let book decreased in the year to 0.15 per cent from 0.18 per cent last financial year, although some arrears will inevitably have been suppressed by payment holidays.
The lender also demonstrated a greater focus on specialist buy-to-let lending, accounting for 93 per cent of total buy-to-let activity, against 89 per cent in 2019, although lending overall reduced by 18.6 per cent year-on-year due to the restricted market in the summer months.
The new business pipeline showed business returning to more normal levels heading into the new financial year, standing at £868.1m at the year-end, against £911.7m the previous year, as landlords reacted to strong levels of tenant demand.
Share dividends resumed with the “better than expected” full-year results, according to broker Shore Capital, as profitability resumes.
“Overall, we expect these results to be welcomed by the market, albeit the share price reaction may be tempered by the strong run the shares have already enjoyed in recent weeks,” added Shore.
Richard Rowntree, Paragon Bank managing director of mortgages, said: “2020 has been the most extraordinary year, but it’s one which has demonstrated Paragon’s resilience, our commitment to the market and the strength of our people and processes. Within four days of lockdown, over 90 per cent of our workforce was working from home and we remained open and lending throughout the pandemic.
“Overall lending reduced naturally as a consequence of the lockdown and the restrictions imposed on the housing market, but demand bounced back strongly post May and our pipeline at the end of October was nearly 15 per cent ahead of March 2020.”
Despite the disruption to lending activity caused by coronavirus, Paragon’s net mortgage loan book ended the year 4.6 per cent higher than the previous year due to lower redemption rates. The total mortgage book, which includes second charge and owner-occupied loans, stood at £10.8bn.
Elsewhere, within Paragon’s commercial lending division, development finance loans to SME housebuilders grew during the period to £385m, up from £363m last year.
Bridging applications soar to record Q3 levels
Applications totalled £7.6bn in the third quarter, representing a 25.7 per cent rise on the same period in 2019 and an increase of 39.1 per cent over the previous quarter.
Completions in Q3 2020 were £680m, an increase of 44.8 per cent on Q2, although still down by 27.6 per cent on the same period last year – as the market bounced back from the impact of the first lockdown.
Loan books increased 0.6 per cent on the previous quarter and five per cent on the same period last year – remaining at around £4.5bn. Average loan to values (LTVs) rose slightly since Q2, but continue to remain sub-60 per cent.
The value of loans in default showed a small increase of 3.3 per cent over Q2 2020 but were 23.1 per cent higher than the same period last year, as borrowers continued to feel the financial impact of the pandemic.
The figures were compiled by auditors from data provided by members of the trade body.
Speaking to Mortgage Solutions, Vic Jannels, chief executive of the ASTL, said: “The increase in demand for bridging is down to the versatility and speed that short term finance can offer in an uncertain environment.
“We know that many term lenders are running at long delays currently and so, for people who want to move quickly – perhaps to beat the deadline for the stamp duty holiday – bridging can prove a very useful product. There has been huge demand for bridging in recent months, and we expect this to continue.
“As always, the value of advice is crucial and we anticipate that any short term lending will be recommended only where it is absolutely the right option for a customer.”
Vic Jannels, added: “This has been a hugely busy period for bridging lending.
“If the recent positive news about vaccines comes to fruition and lenders continue to underwrite loans sensibly, while taking a proactive and collaborative approach to customers in default, then there is no reason why this quarter’s figures should not prove a strong foundation for a robust and sustainable recovery.”
First for Bridging appoints Pearce head of intermediary relations
Pearce, who joins from Together, will oversee F4B’s intermediary support centre in Manchester, which opened in October, and the sales team in the head office in Surrey.
Her main role will be building and maintaining relationships with intermediaries.
Pearce said: “F4B has already shown great foresight and ambition in setting up an office and building a support team who are making a real difference to our northern advisers, especially in such a challenging and complex marketplace.
“I hope my experience can help establish even stronger connections and generate more opportunities for those brokers with clients who can benefit from a wider range of alternative lending solutions.”
F4B director Donna Wells said: “Erica will play an integral role in a concerted and coordinated effort to promote our presence and encourage more introducers to approach us with transactions which require an additional layer of specialist support.”
First 4 Bridging added Hope Capital to its lender panel in July.
Virgin Money launches faster API-driven mortgage applications with MAB and Connells
The partnership will streamline the search and application process for intermediaries by removing the need to re-key data in multiple places.
Users can apply for a Decision in Principle from Virgin via this integration and submit a full mortgage application and payments without needing to visit the Virgin Money portal.
Available across residential and buy to let, for both purchase and remortgage customers, the technology will be rolled out to the wider market in early 2021.
Simon Wallace, head of mortgage integration and transformation at Virgin Money said: “At Virgin Money we have made no secret of our ambition to drive change and innovation in the mortgage market. This exciting partnership with Twenty7tec will play a key part in achieving that goal.
“The Apply platform will make it even easier for intermediaries to submit cases to us, saving them precious time, which could be better spent on helping their next client.”
James Tucker, CEO of Twenty7Tec, said: “Virgin Money has a great track record for innovating in the mortgage market and playing a huge role in delivering better customer service, so we’re over the moon to help them with this integration. As a result of this deal, Virgin Money Customers will experience a seamless experience from beginning to end – something which the Virgin brand is so closely allied with. We’re proud to be their partner in making the mortgage experience a little better for everyone involved.”
Ben Thompson, deputy CEO of MAB added: “This is a really progressive step, that we thoroughly welcome. Simplification of the mortgage process is very much needed, even more so in the current environment.”
Adrian Scott, group mortgage services director of Connells said it’s great to see another lender go live with the Apply system. “This will make writing business with Virgin Money far more efficient, which is always an attractive proposition for any broker, but particularly at this time when the market is so busy,” he added.
Precise head of sales Jamie Pritchard exits firm
“As one journey ends, another begins,” according to his LinkedIn page update and Pritchard goes on to thank Alan Cleary and Roger Morris for “taking a chance on me and allowing me to grow in this role”.
Pritchard has been head of sales at Precise for five years and confirmed to Mortgage Solutions he is “available for the next opportunity”.
He said: “The whole team across all departments at Precise Mortgages have been amazing. My team became like a family and I would like to thank each and every one of them for how exceptional they have become – it’s been a delight to watch them grow.
“I would also like to thank all the countless brokers, the specialist distributors, clubs, networks and trade bodies who have supported me over the years in the role. Way too many fond memories to mention here and I look forward to seeing you again when the world can move on.”
He added: “It’s now time to take time out with my gorgeous family at home.”
Pritchard joined the lender as national sales manager in April 2014 from Principality Building Society, ending his time at the mutual as interim head of intermediary sales after a five and a half year stint.
Adrian Moloney, group sales director for Precise Mortgages said: “It’s been a pleasure working with Jamie and we thank him for his dedication to Precise Mortgages and the time he has served over the years. We wish him the very best of luck in the future.”
Newcastle Intermediaries launches discounted variable rate mortgages
The provider’s residential SVR in England, Scotland, Wales and Northern Ireland falls to 3.96 per cent, effective immediately.
The new products include a two-year discounted variable rate at 1.79 per cent until 30 April 2023, representing a 2.17 per cent discount from SVR.
Available up to a maximum loan to value (LTV) of 80 per cent it has a product fee of £999.
A two-year discounted variable rate is also available at 2.35 per cent until 30 April 2023, representing a discount of 1.61 per cent from SVR.
Available up to a max LTV of 80 per cent this product offers a free standard valuation on properties of up to £500,000 and comes with no product fees.
Both mortgages allow 10 per cent overpayments per annum.
Brokers must be visible to 1m adverse credit borrowers ready to buy homes – Pepper Money video
According to Pepper Money’s adverse credit White Paper, of the 1.09m people who have experienced adverse credit in the last three years, t66 per cent will be approaching a broker for advice, up from 40 per cent a year ago.
In the second video debate focused on the research, Rob Jupp Brightstar’s CEO said the quality and in-depth nature of brokers’ online customer reviews have never been more critical.
“What your potential customers will be looking for is people who look like them. Normal people with similar issues to theirs. What I would really urge your [adverse] customers is not just to leave online reviews, but encourage clients to make them relevant. You’ll find that they will be refreshingly honest about their own situation. It’s almost a cathartic thing, they say this is me, this is what I had and this is what the broker did for me – and that will be tremendously encouraging to the million or so people looking to buy in the next 12 months,” said Jupp.
If they can see people who look like them, they are more likely to pick up the phone and say can you help me, said Jupp.
Dale Jannels, managing director of Impact Specialist Finance said education will be key for this market as a lot of adverse credit customers still don’t know they are in a position to buy a home.
“It’s down to all of us – advisers, packagers, lenders, networks and even trade bodies – should be out promoting to the end-consumer the fact it is an option to get a mortgage, no matter what your scenario,” said Jannels.
Of course it’ll depend on their affordability, credit history and score but they must come in to an adviser to explore all avenues,” he added.
Pepper Money sales director, Paul Adams said he was ‘chuffed to bits’ that interest in brokers’ services had risen from 40 to 66 per cent since the first survey was taken over 12 months ago and advocated a higher online presence promoting support for adverse credit customers as part of that skillset.
For more from all of our panelists watch part two of our debate [09:50] – and click on the link under the video to download the research.
Download the full report from: https://www.pepper.money/wp-content/uploads/2020/10/Pepper_Autumn-White-Paper-2020_09.pdf
Watch the first video in the four-part series here: https://www.mortgagesolutions.co.uk/news/2020/11/25/lender-treatment-of-mortgage-payment-holidays-still-pretty-unknown-jannels/
Air Mortgage Club launches large equity release case service
The bespoke service will be available to club members via Air Sourcing, a platform for servicing clients’ later life requirements, for cases of £250,000 or more.
Air Mortgage Club said the new service was designed to ensure later life advisers get the best possible outcome for their larger loan clients.
Customer service operators support the enquiry through a whole of market search to get the right product solution and generate the Key Facts Illustration (KFI) in order to speed up the process.
Every case placed through the Air Sourcing Customer Support Team is checked to ensure the adviser’s commission is the highest level available or the service offers that market insight.
Stuart Wilson, chief executive officer at Air Group, said: “Larger loan cases are a growing part of the later life lending sector, and with these amounts it’s incredibly important advisers are able to service them effectively and quickly.
“By utilising this service, advisers will get a significant amount of support, and we’ll be able to best position those cases with individual lenders and providers to maximise the chance of acceptance and success.”
David Copland appointed business development director at digital BTL broker
Copland spent 10 years with LSL Property Services after its acquisition of Pink Home Loans from Skipton Building Society.
Property Master, a direct to landlord business, launched three years ago and is a digital mortgage broker focussed on UK buy-to-let landlords and uses algorithms and artificial intelligence to search and match landlord’s mortgage requirements.
Angus Stewart, chief executive, Property Master, said: “I am delighted to welcome David to the team. He brings with him a wealth of experience of both the property market and of mortgage finance.”
Stewart said: “David’s role will be to complement that effort with the development of partnerships with organisations who can support us in bringing what we have to offer to even more landlords looking to find a better mortgage deal.”
Copland said: “I have followed Property Master’s development over the last few years, and I am excited at the prospect of now having a more hands-on role. Property Master has successfully made great strides in disrupting the market for buy-to-let mortgage finance which I know to be complex and challenging. The company’s use of technology is truly market leading and the savings they can make for individual landlords can be transformative. “
Copland was a founding director of Pink Home Loans a packager, a mortgage club and a mortgage and protection network and held various sales and marketing roles before being appointed to chief executive officer.
Speaking to Mortgage Solutions, Copland said the part-time role will be an entrepreneurial one and he will be working with the most accurate and sophisticated buy-to-let sourcing system in the market.
“The greatest appeal to landlords is that the system stores all their information in the back office CRM so you don’t have to collect that information again and therefore repeat business is extremely high,” said Copland.
“This will appeal to portfolio landlords of any size, but particularly those with larger portfolios,” he added.
Dear regulator: ‘replying to emails would be greatly appreciated’ – JLM Mortgages
In our line of work, there are easy targets – and then there is the Financial Conduct Authority (FCA).
Perhaps the easiest of all targets and we have some sympathy for those who work for this organisation especially given the large amount of – often unjustified – opprobrium that is thrown at it.
That said – and you might have sensed where this is going – sometimes criticism is justified, especially when you can see a perverse logic, or an inverted priority list.
Now, let’s caveat that again because we all understand this is a pandemic we are living through and, we might argue, that the normal rules do not apply. However, there is also a strong argument to suggest our regulator should be doing more than most to create a greater level of ‘normality’.
We all have staff working away from the office, we have all had to ensure our systems and processes can function in that environment, we have all had to keep providing the service we are paid for, we have all needed to find ways to maintain our focus and deliver our ‘end product’.
The FCA should not be immune from those responsibilities, in fact you might think it is more important for them to function ‘normally’ than most. Particularly given the ever-increasing cost of being regulated.
Six months to process AR firms
So why, for example, are we waiting an age for them to process and register our new AR firms? Why has it taken over six months and, despite constant calls, emails and meetings, this still hasn’t been done?
Why are they effectively stopping these firms and advisers from trading while we wait for them to be processed? Why have they taken people off the register for no reason, then when questioned, reinstated them with no apology?
And then there is the issue of what should be the regulator’s major priorities at this moment. Big picture strategising is one thing – we’ve seen enough of that in the mortgage market with its ongoing fixation on price but, at the same time as it is ignoring emails and calls, it is ramping up the workload of the firms it regulates.
Hence, while we have been waiting since November 2019 for the regulator to provide the guidance we asked for on business structures, it is now asking us to fill out a second Covid-19 impact study. To say this is not necessary at the moment is an understatement, especially when these requests seem designed to stop advisory firms/network principals and the like from actually getting on with our work.
How come this data is deemed so supremely important when we simply want a reply to an email?
High standards for all
So, while we understand that this might be perceived as another case of bashing the regulator, there is a lot more substance to our concerns, mostly because when the highest standards are expected of our business, why shouldn’t we expect the same from the FCA?
Given the circumstances, and given the FCA itself said it would – during this period – only be focusing on key areas, why doesn’t it now begin to deliver on what is really required for the firms it regulates? We await a response – and if they could also reply to our emails, that would be greatly appreciated.
We are keeping up our side of the bargain, so it would be good if the regulator could try and support us more.
Mortgage Solutions has contacted the FCA about the issues raised in this article.