The lender, which launched in October, has been somewhat constrained in the markets it can operate in due to regulation in its first year.
However, speaking exclusively to Mortgage Solutions, Vida Homeloans director of mortgage sales Louisa Sedgwick said the lender had plans to grow its offering in the final quarter of the year.
“We are planning new products, including moving in to Scotland next year, and we hope to move into the second charge market,” she added.
Vida’s mortgages are currently only available through selected networks and packagers, but it is in discussions with three more networks to widen its availability.
The lender outperformed its targets and achieved £1bn of decisions in principle within its first six months and has a financial break-even target date of the end of next year.
Sedgwick acknowledged that as a result of its slightly-unexpected high demand Vida had suffered some delays in its service levels but it was tackling these – in particular by hiring more underwriters around the country.
The lender launched with wide criteria, targeting individuals who may have difficulty borrowing from more mainstream lenders, such as the self-employed or those with credit blips.
However, the vast majority of its lending is to mainstream clients.
Sedgwick said: “90% of what we do is clean business, we’re not focusing on credit impaired clients.” And there has been a surprise in how its coverage of four borrowers has developed.
“Of the residential purchases we conduct, 42% are with first-time buyers. We expected the option of covering up to four borrowers to be popular,” she continued.
“But actually, that option is often being used by families (mum, dad and the children), rather than groups of young people buying a first place together.
“This is sometimes because the parents have got themselves into financial difficulty and the children help out, or its to buy a bigger family place,” she added.
Vida began with a surge of buy-to-let business but this has slowed and now forms about 60% of its loan book. Of that, approximately 80% is remortgage lending.
As a result Sedgwick has been taking a keen interest in how the buy-to-let market is evolving since the tax changes.
“We’ve not seen a lot of portfolio remortgage business which I would have expected,” she said.
“Customers might not have woken-up to the need to do more work and many may be in limited company already.
“So although we have seen an increase in limited company business, I think we’re 18 months to two years away from seeing a massive switch to limited company,” she added.
While Vida is not regulated by the Prudential Regulation Authority (PRA), it is working to those rules to ensure it is compliant with market practices and in treating customers fairly.
As a result it will be implementing the PRA’s rules for portfolio landlords which come in at the end of September.
Sedgwick confirmed that Vida is still deciding how it will respond to the changes but it plans an announcement in early-to-mid September.
One of the areas Vida’s criteria is most open to is new build properties and modern methods of construction (MMCs).
“We are quite flexible with our construction types, we will look at the weird and wonderful and wacky,” Sedgwick continued.
However, this is not the case with all lenders and she believes misunderstandings between builders and lenders can be common, which can prevent the mortgage market covering these new builds.
“We need a forum, to get a room full of people together from lenders and builders who can make decisions and drive forward these construction types. We would definitely engage with it,” she adds.
Part of this lobbying and administration work would usually be undertaken by the former Council for Mortgage Lenders (CML) but Sedgwick feels the organisation has understandably been a little distracted since its merger into the bigger UK Finance trade body.
“The Intermediary Mortgage Lenders Association (IMLA) and Association of Mortgage Intermediaries (AMI) have to work a lot harder right now to keep the heads-up approach going,” she said.
But she suggests a major improvement to the way housing policy is enacted would be give the Bank of England more power and create more time and space for policy to be enacted.
“They should put the housing minister position into the Bank of England – it’s just not a priority for government right now,” Sedgwick added.