Pepper Money launches residential remortgage range for poorer credit scores
The lender said that the range would support an increasing number of customers who may have failed mainstream credit scores coming out of the pandemic. The range is aimed at those who haven’t had a secured missed payment, County Court Judgment (CCJ), or default in 60 months or an unsecured missed payment in the last 12 months.
The range includes a two-year fixed rate up to 55 per cent LTV at 1.98 per cent as well as a five-year fixed rate up to 65 per cent LTV priced at 2.8 per cent.
The range has options up to 85 per cent LTV, with its two-year fixed rate set at 4.23 per cent and its five-year fixed rate priced at 4.18 per cent.
The products are also available to self-employed customers who have three years’ trading history.
Pepper Money’s lending decisions are assessed by human underwriters rather than relying on credit scoring, so the customer’s individual circumstances are taken into account.
The lender said this human approach to underwriting and criteria means Pepper Money can often help with cases that have been turned down elsewhere. For example, unsecured missed payments over 12 months ago are acceptable provided they’ve been brought back up to date.
Paul Adams (pictured), sales director at Pepper Money, said: “The new products enable us to provide some of our lowest ever rates. We’re sure they’ll prove extremely popular with remortgage customers, especially when combined with the choice of free standard legals or our cashback offer, which provides £150 cashback towards costs and the choice of solicitor from across our panel.”
Government earmarks £450m to upgrade UK’s boilers
The government also confirmed a further £3.9bn of new funding for decarbonising heat and buildings, including the boiler scheme, so homes and buildings are warmer, cheaper to heat and cleaner to run, it said. The scheme will provide households with £5,000 grants when they switch to an air source heat pump or £6,000 when they switch to a ground source pump.
This comes as the UK prepares to host the UN COP26 summit next week, where the Prime Minister will call on other world economies to set out their own domestic plans for cutting emissions.
However, although up to 25m UK homes have gas boilers, the grants will fund just 90,000 pumps over three years, according to the BBC.
Critics including Friends of the Earth and Greenpeace say the plan does not go far enough.
Homeowners will be encouraged to switch to a heat pump or other low-carbon technology when their current boiler needs replacing, not before and an air-source heat pump costs between £6,000 and £18,000, depending on the type installed and the size of a property. However, the government said it plans to reduce the costs of installing a heat pump by at least 25-50 per cent by 2025 and to ensure heat pumps are no more expensive to buy and run than gas boilers by 2030.
The government plans to phase out the installation of new natural gas boilers from 2035.
Prime Minister Boris Johnson said: “The UK’s path to ending our contribution to climate change will be paved with well-paid jobs, billions in investment and thriving green industries – powering our green industrial revolution across the country.
“By moving first and taking bold action, we will build a defining competitive edge in electric vehicles, offshore wind, carbon capture technology and more, whilst supporting people and businesses along the way.”
However, Ross Boyd, CEO of Dashly said: “Boris’s announcement is yet more hot air and cynical greenwashing in the lead up to COP26. While offering a grant to fund green improvements to homes is in the right ball park, many are rightly stating that £5,000 simply isn’t enough for the majority of people to make their homes greener in a meaningful way.
“Meanwhile the mortgage industry has been sitting on the answer all along. Lenders know the green profiles of properties and can easily fund genuinely green boilers through a properly tailored mortgage that has both the consumer and the environment at its heart.”
David Whittaker, CEO of specialist buy-to-let lender Keystone Property Finance, said: “Keystone offers its own range of green mortgages, which offer a discounted rate to landlords who upgrade the EPC rating on their home to C or above.
“The Government’s plans to offer up to £5,000 to homeowners to install heat pumps smacks of half-baked opportunism. This administration has spoken many times of bringing about a new ‘green industrial revolution’ but, as yet, we haven’t seen any worthwhile actions to back up the rhetoric. Housing emits nearly 20 per cent of all greenhouse gases in the UK and so we need an all-encompassing, joined-up plan to upgrade the nation’s property stock. Offering money to help homeowners swap their inefficient gas boiler for an energy efficient heat pump is a start, but it is not a silver bullet.”
“I’d like nothing more than for Chancellor Rishi Sunak to deliver a bold Budget next week in which he announces a genuine vision to retrofit UK homes. It’s over to you, Mr Chancellor.”
Please find links to the full Net Zero Strategy and Heat and Buildings Strategy papers here.
Specialist Finance Centre Solo gears up for growth
SFC Solo is a specialist bridging, buy to let, commercial and development finance brand for self-employed advisers.
The firm said the brand was launched in March 2021 on the back of rising business volumes across the specialist mortgage markets, increased adviser interest in working on a self-employed basis and heightened demand to maximise the opportunities on offer across the bridging, commercial and development finance sectors.
The SFC Solo brand allows advisers to trade independently but within an infrastructure provided by a directly authorised firm. Solo advisers will have full access to Specialist Finance Centre’s support team at its Cardiff-based head office who can facilitate the regulated and non-regulated cases which are not specialist areas.
Specialist Finance Centre is an established second charge packager which takes referrals exclusively from financial intermediaries. It also has ambitious growth plans and is looking to expand its fully employed onsite adviser team.
Daniel Yeo, founder and managing director at Specialist Finance Centre, said: “We currently have five self-employed advisers operating under the SFC Solo brand and we are already in talks with a number of other well-skilled, client-focused advisers who are interested in working independently and earning the lion’s share of income whilst still benefiting from a strong level of support. However, it’s all about the quality of adviser, rather than quantity.
“There is huge demand for bridging, commercial and development finance from many property professionals and this is being recognised by a growing number of advisers who are assessing their current working practices, situations and areas of expertise. As a business, we feel that we are well placed to provide a fully supportive self-employed platform and brand where advisers can benefit from our vast experience and carve their own niche in such a potentially lucrative marketplace.”
Finance 4 Business shareholder restructure confirms Martin as chairman
Finance 4 Business provides specialist mortgages, bridging finance and development finance.
Pinnington joined the business in 2017 and took over as CEO in March 2021 to work alongside Johnson, who has worked at Finance 4 Business since 2010, and Atkinson, who joined in 2013 to lead the business.
New chairman Russell Martin said: “Finance 4 Business was my original baby and I’m proud of what I have achieved over the years in helping to make it the business it is today. But it’s time to fully hand the reins to David, Melanie and Paul, who have been a major ingredient in the recipe for success and will continue to drive the business forward, catering for a market evolving at pace.”
Russell added: “It’s been a momentous year for us, with the launch of the ARMCO Group, and we feel this has significantly enhanced our offering and contributed to our success. This, combined with the expertise and experience of Melanie and Paul, means that we have a strong team to drive the business forward. We will continue our mission to help investors, developers and businesses capitalise on the opportunities that are emerging in the property market.”
The company has also rebranded across the website and other business channels, including social media.
Russell added: “Despite entering a new era here at Finance 4 Business, we will continue to play a central role as a broker, unravelling complex and multifaceted information with clarity, knowledge and speed, via a dedicated and experienced team.”
Technology and lead generation must target customers earlier in mortgage journey – Brodnicki
Speaking in his opening address at the ICC in Birmingham, he said that technology could be used to qualify and prioritise leads, as well as generate leads. It will also “deliver value and build trust and loyalty” before the customer is ready to receive advice, which is crucial for future lead flow.
Brodnicki added: “It’s a massive challenge but it is also a massive must-do for us to secure our futures and to be able to evolve our business models and scale with absolute certainty.”
Lead generation deals
Brodnicki pointed to partnerships with Booming, Beehive Money and Moneysupermarket as examples of lead generation that will allow MAB to target customers wherever they were in their mortgage journey.
He added that over the past 18 months it had trialed new lead generation initiatives, including appointed representative dedicated marketing executives and its customer care team in Derby.
Brodnicki said that both had “produced great results” and “received fantastic feedback” and consequently these would be expanded.
He said: “This is just the beginning of a massive project about learning more about our customers and future customers than ever before. It is about delivering value and trust very early on and significantly widening the number and type of resources that will help build additional high quality and high conversion lead flow, months, even years earlier than we do now.”
Working hard on customer acquisition
He reiterated his pledge for MAB to become the number one in lead generation and fulfilment, adding that it would help its partners get more out of new sources and existing customers and trial solutions to increase lead flow.
He said: “Lead generation is the engine room of every single business and it drives every decision that every business makes. I believe every business should first assess itself as a lead generation business in terms of consistency and security of lead flow, lead quality, lead capability, lead source, exposure and aggregated lead cost.”
Promise to advisers
Speaking about his technology pledge at the previous 2019 conference, which said that it would “build technology to be proud of”, he said that it had not made as much progress as he would have liked.
He said that the business had since increased its technology spend threefold and it was now starting to deliver the “planned functionality”.
He added that whilst it would have been easier not to build the technology in-house it was “absolutely the right thing to do”.
He said that the Midas ecosystem, which has been updated, needed to respond to the individual requirements of every customer, business adviser and lead source and he promised it would do “exactly that”.
Hinckley & Rugby offers full mortgage application on Submissions Brain
The partnership allows brokers to complete and submit a full mortgage application to Hinckley & Rugby through a standalone form on the Submissions Brain platform, which is sent to the lender via secure email. It is the latest step in the mutual’s digital transformation process, aimed at integrating greater levels of technology to deliver a more efficient and streamlined process to brokers and their clients.
The lender is the latest in a series of new lender additions to the Submissions Brain system, joining Accord Mortgages, TSB, Nationwide Building Society, Virgin Money, Coventry Building Society, and Platform.
The website tool enables brokers to be able to carry out multiple decisions in principle (DIPs) and or full mortgage applications and share documents with partner lenders.
Carolyn Thornley-Yates, head of mortgage proposition and distribution at Hinckley & Rugby Building Society, (pictured) said: “We understand the appeal to our intermediaries of online solutions and are keen to embrace technology which will remove barriers to submission and help our team of mortgage specialists and broker partners to operate more efficiently. This partnership between Hinckley & Rugby for Intermediaries and Submissions Brain is the perfect example of the mortgage market investing in and developing the integration of digital channels in the best interests of our borrowers.”
Neil Wyatt, sales & marketing director at Mortgage Brain, said: “There is no question that Submissions Brain can make a dramatic improvement to broker workloads, saving vast amounts of time when submitting DIPs or full applications with our partner lenders. We have a host of other lenders joining the Submissions Brain gateway soon, which will mean even greater efficiencies for intermediaries.”
Rents increase 15 per cent as London tenancy demand surges
The areas with the highest enquiry levels include Camden, with viewing requests up +128 per cent, Hyde Park with +45 per cent more and Canary Wharf at +38 per cent, with all of these places also offering far fewer available properties.
Richard Davies, head of lettings at Chestertons, said: “This continued surge in demand, especially in prime central London, is heavily impacting the supply of available properties to rent in the capital. As a result, rents have risen sharply and tenants now have a much more limited choice than they did last year. On average they are only able to view one or two properties that meet their criteria, which greatly differs from a year ago when they were able to view at least five.”
Chestertons’ figures show that there were 68 per cent fewer properties available for rent in September 2021 compared to September 2020 while the number of tenants moving into their new rental home has risen by 13 per cent.
Davies said: “With demand outstripping supply, landlords are currently in a strong position and those who have been considering selling their properties may be persuaded to keep it as a rental investment given that rental yields are now increasing.”
Remortgaging: Timing may not even matter this time – Hunt
It felt like an odd comment to make, given they work in the finance sector, they’ve always used an adviser and you’d think they were absolutely au fait with their mortgage product options and what they required.
So I asked what they meant. It turns out they are one of those fortunate borrowers that lenders appear to have been falling over themselves to get recently. Their next remortgage is below 60% LTV, and they’ve secured a below one per cent fixed-rate over five years.
In my friend’s mind, that feels like good business. However, they will also freely admit that securing this mortgage is way more to do with luck and timing, than any sort of judgement on their part.
It just so happens their current mortgage deal comes to an end next month, and because of this (and their situation) they’ve been able to secure this deal. In other words, they’ve got it right in the sense they’re in the right spot at the right time.
Previous remortgages haven’t felt like that. There was the option to go with a 5.25% fixed-rate just before the credit crunch and the subsequent decision by the MPC to cut rates. There was a decision a few years prior to that when they opted for a variable rate that tracked BBR – over the next two years the MPC steadily upped rates.
They were beginning to think that all remortgages might end up with them feeling slightly short-changed. But not this time and especially since the inflation figures have come through and there is much talk about an increase in BBR perhaps even before Christmas.
Grass is always greener
This experience got me thinking about what people who are not in this situation might currently feel. Those who perhaps remortgaged last year and are now seeing the ultra-competitive rates available and perhaps cursing their luck. Or those who pre-pandemic took out a five-year fixed-rate at levels far above what is available now. Or those who might not come to the end of their deal until sometime next year and might be wondering what rates will look like then?
Given how important the monthly mortgage payment is to so many people, we should not be surprised to see the level of interest there is in our market, to have people even now somewhat regretting the mortgage products they opted for years ago, and to perhaps be wondering whether their existing deal is still the right one for them, or if ultimately they can save money by moving. How good is that for advisers?
As an advisory community that is a groundswell of interest and engagement that few other sector professionals have the fortune to be able to tap into. To be able to actively communicate with both existing, and potential new, clients and to be able to talk to them about their options, even if they have only recently gone through the process.
Add in the fact our market can move incredibly quickly and it’s possible to see how far this can take you and the services and products you can provide. We should never underestimate just how important ‘the mortgage‘ is to everyone who has got one, or the deep-seated willingness to ‘shop around‘ in the anticipation of cutting those costs. It’s always a door worth pushing open to find out what’s inside.
Google fraud focus requires advice firm action – Stonebridge
So it’s no wonder that our regulator(s) are working to try and ensure ‘successful’ perpetrations of fraud are kept to an absolute minimum.
As a sector, over the past 18 months, we have effectively had to work remotely with our clients and this has provided the fraudsters with an extra incentive and avenue to pursue. If you never meet the adviser face-to-face, or indeed if you never meet the fraudulent customer face-to-face, then there is an increased chance of such activity taking place.
Part of what the regulator is trying to do is cut off fraud at source. There are countless examples, for instance, of fraudsters setting up fake firms, advertising via Google and social media, and drawing in customers in order to steal their money.
To that end, and this may be something firms are not fully aware of yet, Google has introduced a new measure to protect consumers and help prevent those scammers from exploiting its platforms.
Since the start of September, it has started to verify financial services firms who want to advertise on Google, including for both display and search results adverts. And, an important point for firms who rely on this advertising, until you secure that verification your advertising will be paused.
This will be the case for both existing advertisers and anyone who wants to advertise in the future. If you’re the former, you’ll only need to complete ID verification if Google sends a notification email and you have an activated account with them.
The steps required to verify may differ depending on the firm’s account and structure, the billing set-up, and if you are advertising on behalf of a firm or as an individual.
A guiding hand
However, this will also differ if you are part of a network like Stonebridge. Because we are the FCA-approved network, the requirements mean that the process needs to take place through us, rather than individually. As a result, we’ve had to put new processes in place to take our AR firms through the required steps and I suspect other networks will be in the same position.
It may take some time to secure that verification so if you’ve not heard from your network principal, we would advise you to get in touch with them, to see how they can help you secure the verification required to keep on advertising.
The other point to make is that one-time verification is unlikely to be the end of the matter. We hear that Google, for example, may be reviewing all financial services advertising accounts on a quarterly basis, and in all likelihood, this type of checking policy will spread to other digital advertising platforms.
You can fully understand the rationale for this as the damage from fraud can be devastating for all concerned. Advice firms are going to need to keep a close eye on the requirements and ARs will need to work closely with their networks in order to ensure ongoing verification to allow them to advertise their much-needed products and services.
Two week countdown to the 2021 Mortgage and Protection Event
The Mortgage and Protection Event timings and locations:
3rd November – AJ Bell Stadium, Manchester
4th November – Cranmore Park, Birmingham
10th November – St Mary’s Stadium, Southampton
11th November – StoneX Stadium, London
Back as a face-to-face event for the first time since 2019 in Covid safe environments, we look forward to providing an opportunity for mortgage and protection advisers with the ambition to grow their business: to build market, product and provider knowledge; to deepen relationships with lenders, insurers, ancillaries and other advisers; to learn how to run a business better, and ultimately to increase both customer satisfaction and their bottom line.
Our programme includes a raft of richly educational sessions from the chairman’s address from Kevin Roberts, director at Legal & General Mortgage Club, at all four events about the economic overview – a look at the economy in general and the mortgage and housing markets in particular, with specific regional focus offered by Lee Hopley, director of economic insight and research at UK Finance.
The next session entitled Working together – improving broker/lender relationships and processes to deliver optimum customer outcomes will be led by
Jeremy Duncombe, managing director at Accord Mortgages, followed by a session on the ever-critical topic of remortgaging given the almost £40bn of potential term-ends in January 2022 with a protection angle offered by Andy Walton, protection proposition director at Mortgage Advice Bureau.
Neil Wyatt, sales director at Mortgage Brain, will be leading the next session called Driving efficiencies in a post-pandemic market outlining how using the correct integrated solutions in the right way can save you time and your business money and benefit your clients.
Finally, on the half-day conferences we offer our lender panel debates featuring Simon Cockerill, head of intermediary sales development at Precise Mortgages & InterBay Commercial, Jonathan Stinton, corporate relationship manager for Coventry for Intermediaries and two more big lenders to be confirmed closer to the time.
For more information or to register, click here.