Advice specialism important but ‘access to all areas’ critical – Jefferies

Advice specialism important but ‘access to all areas’ critical – Jefferies

“Customers need to be able to access whatever type of broker they want to and access the products that are available on the market across the range. Most of us operate a whole-of-market proposition, and customers should have access to that if they walk into any of the brokers on the high street. So I’m saying there’s a place for both. And it’s important that there is a range,” she added.

In the fourth part [08.38] of a video series, in association with Accord Mortgages, Mortgage Solutions‘ contributing editor and host Victoria Hartley outlined the raft of affordability solutions targeting first-time buyers, from Accord’s £5k deposit mortgage to shared homeownership and the government’s first homes scheme offering homes at a 30-50% discount.

David Hollingworth, associate director at L&C Mortgages, said of the range of product offerings in the first-time buyer market: “I think education is the key here both for brokers and for consumers.

“You’ve given a really good whistlestop tour of all those different schemes, which will pinpoint different areas of the chain from Lifetime ISAs while someone’s trying to save a deposit through to some of the schemes that might help with affordability such as first homes. Brokers are going to have to keep abreast of those, but I think as Vikki says, [you don’t want to get] too specialised for a [single] market, like first-time buyers, which is so vital to the housing market, actually you want brokers to be across all sectors the whole time,” he added.

“Education for them and for consumers [is needed] so that they’re making the most of these schemes.”


Part-own, part-buy appeal

On shared home ownership (SHO), Hartley said half of all government funding currently goes into this form of affordability support and that broker Just Mortgages reported a spike in enquiries of new-build leads of up to 60% at the start of the year.

Jeremy Duncombe, director of mortgage distribution at YBS and managing director at Accord, said whatever the solution, advice is central to unlocking this complex market. Accord isn’t currently lending in SHO, but Duncombe agreed it’s a ‘valuable’ way to solve the affordability conundrum.

He said: “Generally people don’t buy a part of a house unless they have to. They would rather buy the full thing, but affordability is the reason shared ownership is so popular.”

He added that bringing back a form of Help to Buy* or an expansion in SHO will all help borrowers struggling to buy.

“But affordability is the challenge we’re all trying to solve here,” he added.


*This video was recorded before the Conservatives announced the return of a form of Help to Buy in their election manifesto this week.


Watch the three previous videos in the series, in association with Accord here, debating the Accord £5k Deposit Mortgage, the removal of the four-and-a-half times borrower loan-to-income cap and solving the housebuilding conundrum.


This video was produced as sponsored content.


Housebuilding and infrastructure too critical to be political footballs – Duncombe

Housebuilding and infrastructure too critical to be political footballs – Duncombe

In a Mortgage Solutions video debate, in association with Accord, Duncombe argued housing, infrastructure and planning are too important to rest in the hands of politicians, much like defence and the NHS, where continuity for the next 20-30 years is essential.

Duncombe said: “In the past, we’ve built new towns. It’s that sort of foresight [that] is needed. Where do you build these new towns? How far do you go out? What are the commuter links back into the cities? Because that’s the challenge. It’s infrastructure, schools, roads, transport and then the house has been built around it.”

He added: “There are lots of challenges there and we just need to get an agreement [that] is a long term, not just cross-party but probably apolitical.”

He said one of the major building drivers in the UK has been Help to Buy, and that there might be ways to make this work without creating the downside of “inflationary pressure” on house prices.

He added that the biggest housing market challenges remain affordability, amassing a deposit and creating housing supply, “and all of these things need looking at together as a joined-up policy.”

This week, the Conservative Manifesto laid out the government’s plans to relaunch a “new and improved” Help to Buy scheme alongside housebuilding plans for 1.6 million homes in England by the next Parliament and launch a two-year temporary capital gains tax (CGT) relief for landlords who sell to tenants, among other measures.

In the third part of the Accord debate series [05.56], Victoria Hartley, contributing editor of Mortgage Solutions, was also joined by David Hollingworth, associate director of communications at L&C Mortgages, and Vikki Jefferies, proposition director at Primis.

Watch the rest of the debate below.



Watch the third video, hosted by Victoria Hartley, contributing editor at AE3 Media, with Jeremy Duncombe, director of mortgage distribution at Yorkshire Building Society and managing director at Accord Mortgages David Hollingworth, associate director of communications at L&C Mortgages Vikki Jefferies, proposition director at Primis. This is the third part of a four part video series.

Watch earlier episodes here, with part one on Yorkshire Building Society’s £5,000 deposit mortgage and part two on strategies to improve mortgage access for first-time buyers.


This is sponsored content, produced in association with AE3 Media.

‘We just want something simple that works’ – Montlake on BTL technology

‘We just want something simple that works’ – Montlake on BTL technology

He said the sheer variety of the formats of landlord spreadsheets is an important factor.

“When you get a spreadsheet from a landlord, it’s in so many different formats. One landlord’s format that makes complete sense to them will not make sense to another.”

He said: “To get that information easily from spreadsheet to lender system is where the complexities lie in the different fields. So, it’s about trying to find a system that works, where it can take that information, read it properly and input that into the system. Or find a system that the broker could develop to help them actively manage that portfolio rather than just a spreadsheet. There are people developing those things all the time.”

Montlake said: “I get a call almost every other day about another tech system, and it’s hard for us to know which one to use, which one do we back, which one are lenders going to accept, which one are compliance going to accept. It’s quite difficult.”

Victoria Hartley, contributing editor at Mortgage Solutions, said beyond networks and clubs approved or preferred systems, there’s also the ‘best’ system, so asked Montlake how he juggles these factors.

“A lot of networks’ systems aren’t set up to deal with more complex, semi-commercial deals. There are some new systems coming out – One Mortgage System (OMS) has got that – so I think things will start to change as this level of business becomes more important to brokers as it is at the moment. We’re starting to see networks and clubs looking at ways to pull it all together.”


Paragon Banking Group platform launch

On Paragon’s new platform, expected to soft launch in Q3, Louisa Sedgwick, Paragon Banking Group’s commercial director, said broker and landlord feedback has been key to its development and ability to service complex deals.

Sedgwick said: “We think we’ve got it right. But the brilliant thing is, because we own it internally, it can be very agile, so if we haven’t got it right, we can make those changes and won’t have to wait in a queue to do so.”

She added: “And we’ll continuously talk to brokers, and if they don’t like it, we’ll change it, because we can adapt it to suit. It’s exciting because it is built for Paragon and its customers.”



Watch the first three debates in the series here on reasons to be positive about the landlord market, the rise of the limited company and opportunities for the buy-to-let (BTL) market in 2024.


Refinancing buy-to-let landlords a serious opportunity this year – Montlake

Refinancing buy-to-let landlords a serious opportunity this year – Montlake

“I think there are a lot of landlords coming to the end of their product terms, looking for better mortgages,” said Montlake.

He added: “They’ll be taking that opportunity because a lot of them are more informed. There’s more education out there from lenders such as Paragon and the really good things a lot of brokers are doing, including on green renovations.

“Although there’s been a delay from the current government, [energy-saving measures] will be back on the agenda, maybe with a red tinge or a blue tinge, but we think they will be back.”

He said Coreco is seeing a lot of landlords pushing EPCs up from a E to a D or C and getting a better rate for doing so.

Louisa Sedgwick, commercial director of mortgages at Paragon Banking Group, said: “When we talk about property prices rising, that is also happening within the landlord environment, so actually there’s so much more equity in these properties that they can draw down.”

Sedgwick said if we start to see rates come down a bit, the likelihood is that landlords will be able to capitalise and draw down a little bit more money.

“So a bit like Monty, I think 2024 is going to be a great year for remortgage[s].”


Attracting mortgage-free landlords

The latest English Housing Survey from 2021 suggests 57% of landlords have a buy-to-let (BTL) mortgage, but 38% have unencumbered or mortgage-free properties.

Victoria Hartley, contributing editor, asked how landlords are financing these upgrades and whether brokers are establishing relationships with these clients.

Montlake said: “One thing we’re doing is getting involved with lettings agents, because that gets us in front of a lot of their landlords. Previously, brokers who deal with estate agents used to walk right past the lettings department and deal with sales, but actually it’s a bit of a gold mine.”

He also recommended market education via webinars and social media like TikTok as landlords get younger.

“That’s how we’re engaging a lot of newer landlords who might not know about the wonderful world of mortgage finance,” said Monty.


Tax time lag drove market swing to limited company structures – Paragon

Tax time lag drove market swing to limited company structures – Paragon

In the second part of our buy-to-let (BTL) debate series, in association with Paragon Banking Group, Louisa Sedgwick (pictured), commercial director for mortgages at Paragon, said the ‘staged’ introduction of the tax changes for landlords led to the time lag in buyers committing to a limited company structure.

A survey of 400 landlords conducted by Paragon in November last year showed 73% of landlords are planning to buy their next property in a limited company structure.

“Landlords weren’t initially hit by any of the changes until three or four years, even, into the cycle. In the meantime, they would have bought into a fixed rate on a lower rate to what we’ve seen recently.”

She continued: “You’ve also got landlords that may well be with a more mainstream buy-to-let lender who don’t offer limited companies, and because of the interest rate increases and affordability challenges, they’ve had no option but to retain their mortgages with their existing lender.”

It’s been a feature of timing, with more and more coming through the system as opposed to people making a march into limited company structures, she added.

Last year, 50,000 special purpose vehicles (SPVs) were registered under a limited company structure, largely driven by newer landlords.

Andrew Montlake, managing director of Coreco Mortgage Brokers, said professionalisation in the landlord space has also occurred in the broker space after many years of hard-earned experience.

“We’re much more adept now at understanding that relationship with the landlord and what we need as brokers to advise that landlord properly. You cannot advise a landlord now unless you have that tax advice discussion at the very start.”

Once an advice route or referral onwards has been established, that’s the start point for the discussion, said Montlake.


Watch the first part in our debate series, featuring Louisa Sedgwick and Andrew Montlake, which ran earlier this week, focusing on the many reasons for landlords to be cheerful and the debate surrounding product transfer fees.

SPF’s Tristan Davies targets £10,000 in ride for 17-month-old daughter

SPF’s Tristan Davies targets £10,000 in ride for 17-month-old daughter

Davies has already raised £5,000 for Great Ormond Street Hospital (GOSH) and The Sick Children’s Trust, which supports family stays minutes from their children’s bedsides during treatment, which will be matched by SPF Private Clients and Howdens.

His daughter Octavia, known as Tavie, contracted strep A sepsis and nearly died at the end of March. She is now in recovery, but will continue her life with disability after amputation of her right lower limb.

Click here for more information on Octavia, her illness and progress.


The onward drive

On the fundraising website JustGiving, Davies writes: “We wanted to share our story and raise awareness and support for the charities who have supported us and the causes [that] are now very close to our hearts.

“The care by Great Ormond Street Hospital in London has been absolutely unbelievable. Without their efforts, we would have lost our little girl. We have had to lean on any help offered to us, including from the Sick Children’s Trust.”

Davies is hosting a charity bike ride from 26 to 30 July this year. Cyclists will take on 500km in five days between Norfolk and Cardiff via GOSH. Cyclists and non-cyclists are all welcome to come and be involved or support at key points along the route.

Please refer to the Ride for Tavie website for more information on how to get involved.

James Rodea, chief operating officer at SPF Private Clients, said: “To say Tristan and his family have been on, and remain on, a rollercoaster ride of emotions would be an understatement. Most of us cannot envisage the loss of a child; tragically, this nearly became a reality for Tristan and Ceri. The family are all incredibly brave and are coping admirably under pressure; Tavie is clearly a fighter.”

He added: “While all of this has been going on, Tristan has found time to focus on giving back. When he is not on the hospital ward, he has been on a Peloton bike putting in the miles for what sounds like a very challenging ride.”

If you want to support Tristan’s JustGiving page, please click this link.

In 2021, several of SPF’s advisers banded together in a bid to raise thousands for two charities by staying sober for three months.

Majority of young homeowners believe in value of energy efficiency

Majority of young homeowners believe in value of energy efficiency

Coventry for Intermediaries’ research revealed over half of baby boomer buyers (55+ years old) agree that making green changes will offer a return on their green investment.

The research, which follows Coventry for Intermediaries’ Beyond the Bricks: What Does a Green Housing Market Really Look Like? report, also suggests that homeowners are expecting to commit just under £8,400 on average to green home improvements over the next three years.

Millennials and Gen Z owners expect an average return of £11,123 from a £9,035 investment after 20 years. By contrast, boomers expect an average of £5,379 after 20 years, from an initial investment of £7,732.


Spend on green to save

Coventry’s research shows that, while some homeowners are feeling the pressure of higher mortgage rates and an ongoing cost-of-living crisis, 40% of all homeowners are still motivated to make eco-friendly changes if it means saving money on energy bills.

The Energy Saving Trust estimates that homeowners who install A-rated double glazing could save up to £135 per year on energy bills, while those installing solar panels could save anywhere between £150 and £630, depending on their electricity usage and home set-up.

The importance of EPC ratings is becoming more widely recognised too, with 59% of people now considering the rating when searching for a home. According to Rightmove, an EPC rating change from F to C could see an average increase of 15% in the value of a home.

Jonathan Stinton, head of intermediary relationships at Coventry for Intermediaries, said: “Energy-efficient home improvements don’t just give people a way to reduce their energy bills today; they also provide a chance to future-proof properties for tomorrow’s market. Every energy-efficiency tweak has the potential to boost a home’s resale or rental appeal, meaning energy efficiency isn’t just a buzzword, it’s a tangible asset [that] can add value to a home.”

He added that the upfront costs of these improvements can be a barrier, but brokers have a key role to play to educate their clients about the benefits of energy-efficiency changes, encouraging customers to view them as a long-term investment.

“At the same time, there is an opportunity for brokers to speak to their clients about green mortgages and other incentives that could help them to manage the costs of making their home both better for their wallet and better for the planet, too,” he said.

In April, Coventry Building Society and The Co-operative Bank continued non-binding talks for a £780m cash acquisition after entering exclusive merger talks in December last year. The acquisition remains uncertain and subject to regulatory agreement.

YBS widens access to homeownership with £5k FTB deposit mortgage launch

YBS widens access to homeownership with £5k FTB deposit mortgage launch

The five-year fixed rate product, offered at 5.99% and targeting proven first-time buyers, could slash the ‘timescale to buy’ period for those saving for £5,000 instead of a 5% deposit, according to YBS research.

All first-time buyers will be subject to affordability criteria and can target a maximum property value of £500,000.

The loan will be capital and interest, available on residential purchases only and be available up to a maximum age of 70 at the end of the mortgage term.

However, the product is not available for flats or new-build properties, which could be an obstacle for buyers in London and the South, and is not offered to borrowers in Northern Ireland.


The magic number for first-time buyers

Ben Merritt, the mutual’s director of mortgages, said research showed that £5,000 was the magic amount that would shorten the time needed for first-time buyers to get mortgage-ready, and make it fairer no matter where they live in the country.

For someone taking out the typical £200,000 first-time buyer mortgage, this would mean a loan to value (LTV) of 97.5%.

Merritt said: “Our analysis showed a deposit of £5,000 – compared to a typical 5% – would make a huge difference to first-time buyers across the country by reducing the time it takes them to save up and achieve homeownership, from a maximum of seven-and-a-half years (in London), to around two-and-a-half years.”

Applicants will be credit-scored in a similar way to borrowers of the lender’s current 95% LTV offering and, if a couple is applying jointly, one of the borrowers must be a first-time buyer.


Help for those buying alone

Merritt said: “It creates a level playing field for those who don’t have financial support from their families to fall back on, after research for our recently published Home Truths report showed that 38% of first-time buyers now receive financial help from friends and family to have the chance of stepping onto the housing ladder.

“The society’s research among 500 first-time buyers for its Home Truths report, published in September 2023, showed that 78% of people in this category feel homeownership is becoming an elite privilege, while 63% believe the UK is in danger of becoming a nation of renters.”

The mutual has recommended that the government reintroduce some form of state support for first-time buyers and has called for an industry-wide review involving lenders, trade bodies and the government again to “fix what’s broken in the UK housing market.”

Iona Bain, broadcaster, financial journalist and author of Own It!, said: “For some, saving the traditional deposit of 5% or more of the value of their own home is simply not doable, particularly if they live in a more expensive part of the UK and/or don’t have family help to fall back on.”

She added: “It’s great to see a lender like Yorkshire Building Society playing its part and helping with innovative products like the £5k Deposit Mortgage.”

David Hollingworth, associate director of communications at mortgage adviser London & Country, said: “This product will offer an important alternative for those that can afford to take on a mortgage but find saving a big-enough deposit challenging. That was only underlined by last week’s figures confirming a sharp rise in rents.”

Andrew Montlake, managing director at Coreco mortgage brokers, said: “It is refreshing to see a lender take the bull by the horns and release an innovative scheme to help first-time buyers, and this should do just that.

“Whilst this alone will not solve the issues around homeownership, and some borrowers may not qualify given the fact that prudent lending and affordability rules are still rightly front and centre of this scheme, it is nevertheless a start and shows what a forward-thinking lender can do when they have some innovative flair and a passion for their market.”

Budget2024: Markets expect bank rate to fall to 4.2 per cent by year end – OBR

Budget2024: Markets expect bank rate to fall to 4.2 per cent by year end – OBR

However, OBR predictions out today also caution that “expectations remain volatile”, with projections for the bank rate in 2028 oscillating between 2.7 and 4.2 per cent since its November forecast.

The size and projected growth of the UK population has also surprised, with the adult population to rise from 55 million in 2023 to 57 million within five years.

The OBR said: “Having reached a record high of 745,000 in 2022, net migration stood at 670,000 in the year to mid-2023, around 70,000 higher than assumed in our November forecast.”

Annual migration will fall back to 315,000 in the medium term, up from 245,000 in its November forecast, it said.

In terms of UK growth, gross domestic product (GDP) grew by only 0.1 per cent in 2023, undershooting the November forecast by 0.4 percentage points, but is expected to pick up to 0.8 per cent in 2024 as interest rates fall and real household incomes recover.


UK economic growth figures

GDP growth is projected to pick up to around two per cent in the middle of the decade as slack in the economy is taken up, before falling back towards its assumed trend rate of around 1.66 per cent by 2028, it said.

The trend of economic inactivity is likely to prove more “persistent than previously thought”, said the OBR. Around 9.3 million people are economically inactive, the highest level for over a decade and 700,000 higher than before the pandemic. Around one-third of the working-age inactive population cite long-term illness as their principal reason for not being in the labour force, according to the OBR.

The raft of measures announced in the Spring Budget today are expected to increase labour supply by 300,000. But the OBR added: “We now expect the labour participation rate to continue falling from its pre-pandemic quarterly peak of 64.3 per cent to 62.8 per cent by 2028, 0.5 percentage points below our November forecast.”

UK output growth over the next five years is largely unchanged from November at 1.66 per cent per year.

It said: “The outlook for productivity growth is our most important and uncertain forecast judgement, and there is significant uncertainty over both our migration and participation forecasts.”

Household consumption growth is likely to pick up to around two per cent from 2025 to 2028 due to higher disposable incomes, a sharp slowdown in inflation and lower interest rates.

In contrast, business investment is expected to contract by around five per cent this year as past increases in interest rates raise the cost of capital and weigh on capital spending.

“We forecast that trade volumes will continue to be subdued in the next few years due to sluggish growth in the UK and global economies, and the evolving impact of Brexit,” it said.


House price performance

Average annual property price growth has plummeted from 9.7 per cent in 2022 to 0.6 per cent in 2023. The OBR projects further falls of minus 2.3 per cent in 2024 and minus 0.4 per cent in 2025, rebounding again to 2.2 per cent and 3.4 per cent in 2026 and 2027.

It said: “2022-23 remains the fiscal year with the largest year-on-year (YOY) drop in living standards since Office of National Statistics (ONS) records began in the 1950s. But we now forecast real household disposable income per person to recover its pre-pandemic peak by 2025-26, two years earlier than in our November forecast.”

The various tax changes announced in Chancellor Jeremy Hunt’s Spring Budget today include a 2p cut in National Insurance Contributions (NICs), costing the treasury £10.7bn by 2028/29, and reform of the non-domicile taxation regime, which could raise an annual average of £3.1bn per year.

Fitzsimons and Thomas join Square 1 Media

Fitzsimons and Thomas join Square 1 Media

John Fitzsimons will join Square 1 Media on 1 March as client services director, while Natalie Thomas joined on 1 February as senior PR account manager.

Fitzsimons brings with him a wealth of experience, having worked as a journalist and copywriter within the mortgage and financial services sector for almost 20 years.


Mortgage Solutions

John started his career at the mortgage trade publication, Mortgage Solutions, in 2007, rising through the ranks to become editor before moving on to the consumer finance website, Lovemoney, in 2009. After a five-year spell as editor, John went freelance in 2016 and has been a treasured part of the team at Mortgage Solutions on a freelance basis.

Over the past eight years, Fitzsimons has written extensively for both the trade and financial consumer press, with bylines in publications such as The Sunday Times and The Mirror.

He will be responsible for overseeing existing client relationships at Square 1 Media, as well as helping to develop internal structures and identifying opportunities for existing and new clients.

Natalie also brings a wealth of knowledge from her time in the mortgage trade press, where she began her career in 2005. Since then, she has worked as deputy editor at Mortgage Strategy, as well as editor of Lending Strategy and Loan Distributor, before going freelance in 2012.

Thomas has since worked for several mortgage and property publications, as well as providing copywriting services for PR agencies. She will be responsible for managing a number of client accounts as the firm continues its growth.


Square 1 Media

John and Natalie will work closely with the company’s managing director, Paul Hunt, and its other directors – Alex Hammond, Scott Philipson and Rob Griffiths.

Paul Hunt said: “This is an exciting time for Square 1 Media. Both John and Natalie bring an abundance of experience, and I’m confident they will be fantastic additions to our team. Together, they have almost 40 years of combined knowledge in the mortgage and wider financial markets, positioning us strongly to meet the needs of our expanding client base and ensuring they are in safe hands.”

John Fitzsimons, future client services director at Square 1 Media, said: “I’m thrilled to be joining the team at Square 1 Media and can’t wait to get started. The firm has an excellent reputation for delivering first-class financial PR. I look forward to building on this and putting my knowledge and experience to good use.”

Natalie Thomas, senior account manager at the firm, said: “I’m delighted to join the team. I’ve received a warm welcome and it’s great to be a part of a group so knowledgeable and experienced within the field of financial PR.”

Square 1 Media was established in 2019 and is a PR and marketing agency specialising in financial services.

The firm offers a range of services, including PR; marketing consultancy; content marketing, partnership marketing; branding & positioning analysis; media training and copywriting.