Lockdown prevented 130,000 purchase applications – UK Finance
In its household spending review, UK Finance said the estimate of lost activity was based on the stable pre-Covid trend forecast for 2020, which was largely flat compared to the previous year’s activity.
House purchase lending recovered strongly in the third quarter of 2020 from its Q2 collapse.
In Q3, the total number of purchase applications completed was 154,700 with an almost even split between first-time buyer and home mover transactions. This was an increase of 76 per cent on activity in Q2 when 88,090 purchase applications completed; 46,440 for first-time buyers and 41,650 for home movers.
Year on year, the Q3 volume of purchase loans was 17 per cent lower. In quarter three 2019, a total of 188,230 purchase loans completed; 93,930 for first-time buyers and 94,300 for home movers.
Q4 growth expected
UK Finance said it was important to bear in mind that any “return to trend” observations made by the market, regardless of the Q3 rebound, would still leave total house purchase activity for the first nine months of 2020 nearly a quarter lower than over the same period in 2019.
That said, UK Finance expects a return to annual growth in completed mortgages in quarter four.
The growth, said the trade body, would be driven by the backlog of paused transactions continuing to unwind and a rush to cash in on the stamp duty holiday and Help to Buy scheme before both close at the end of March.
Eric Leenders (pictured), managing director for personal finance at UK Finance, said: “In the third quarter of 2020 the economic and logistical impacts of lockdown receded somewhat, facilitating a strong rebound in the housing market, yet recent further regional lockdowns and tighter restrictions may dampen this to some extent.
“As the stamp duty holiday and current Help-to-buy schemes come to a close at the end of Q1 2021, demand for mortgages is likely to be inflated over the next couple of months – beyond that the outlook is uncertain.”
UTB appoints key account manager from Twenty7Tec
Oades (pictured) will be responsible for the strategic development of relationships in the residential mortgage market, focusing on brokers operating within networks and mortgage clubs, UTB said.
At Twenty7Tec she was responsible for the company’s analytics platform and managing relationships with more than 130 UK mortgage firms.
She will be working with the existing mortgage sales and introducer relationship team led by sales director – property intermediaries Mike Walters.
United Trust Bank commercial director for mortgages Buster Tolfree said: “Throughout this year we have continued to develop our mortgage proposition and have invested in the team to enable us to maintain service levels to all of our broker partners as we increase our product range and volume capability.
“Hannah already knows many of the key players in the specialist mortgage sector which gives her a valuable head start in deepening UTB’s existing relationships and establishing new ones.
“In addition, Hannah’s experience will be extremely useful as we continue to develop the UTB product range, introducer distribution and digital offering.”
Advisers ‘fed-up’ with lenders using pandemic excuse as satisfaction and service falls
There were however some sectors and lenders who bucked the trends, according to Smart Money People’s latest mortgage lender benchmark.
The fifth bi-annual report found overall adviser satisfaction with lenders dropped by five percentage points to 77.8 per cent – the lowest figure since tracking began at the end of 2018.
Net Promoter Scores (NPS), which are a key measure of loyalty, ranged from +68.8 to -76.9, with the average across all lenders falling by 18 points to +12.8, from +30.8.
Speed to process an application remains the most commented upon theme in the report and it has the biggest impact on a broker’s likelihood to recommend a lender.
The rating for speed saw the biggest fall and is down from 75.8 per cent to 67.2 per cent.
As well as speed, online systems remain a key influence on NPS and feedback is very mixed across the market.
Communication has been recognised as vital during the pandemic and it seems this has suffered the second largest fall – down 5.3 per cent against H1 2020.
The report found that positive sentiment towards a lenders’ online systems led brokers to be more positive about other aspects of a lender’s process including ease of use and communication.
The lack of knowledge of staff, which may be symptomatic of more frequent product and policy changes in H2 2020, was also an issue for brokers.
Satisfaction with first-time buyer and home mover cases fell by 7.1 per cent and 6.8 per cent respectively, with speed and communication again being pain points.
And cases involving the self-employed also saw a notable downturn, with the rating for speed falling from 74.8 per cent to 65 per cent – highlighting the strain in that market.
Fed-up of Covid-19 excuse
There were also some more encouraging results.
A third of lenders improved their overall rating, indicating that some were able to build on their relationship with brokers during the pandemic, the report noted.
And specialist lenders outperformed the rest of the market by being able to maintain their satisfaction scores from the first half of 2020.
The report covers feedback from 494 brokers asked their opinions on the last five lenders they’ve attempted to place a case with recently and other providers they use, as well as thoughts on the mortgage market in general.
Jacqueline Dewey, CEO of Smart Money People, said the results showed brokers were becoming dissatisfied with lender performance in reaction to Covid-19.
“Many are fed up with the pandemic being used as an excuse for poor service or slow processes,” she said.
“Despite the difficulties faced in the market this year, some lenders have continued to outshine their competition. A third of all lenders in our report have seen an increase in their overall rating.
“We found lenders who performed well in comparison with H1 2020 were particularly strong around customer service. Lenders whose overall rating fell often did well around product range and rates, but very poorly for speed,” she added.
Virgin Money launches first-time buyer 90 per cent LTV mortgage
The deal is reserved for first-time buyers and will be available from 4 December.
The rates begin at 3.69 per cent and it comes with a fee free or £995 fee options.
The lender is also increasing select 90 and 95 per cent product transfer rates by up to 0.40 per cent.
A raft of lenders have re-entered 90 per cent LTV lending over the past week or so, with Halifax today announcing it will also be moving back into this level.
TSB, Atom Bank and Platform are among the other lenders who have recently enhanced their product availability at 90 per cent LTV.
Former ASTL CEO Benson Hersch passes away
A statement from the trade body confirmed the news. Hersh (pictured) retired from his position last year after seven years at its helm.
Current CEO Vic Jannels paid tribute to Hersch’s efforts with the trade body and the wider lending industry.
“On behalf of the board, I can say that Benson is the reason why the ASTL is where it is today,” Jannels said.
“He took the reins of the membership and transformed it into an association that was more representative of the industry, with a clear purpose to improve standards and encourage sustainable growth of the sector.
“Even after his retirement at the end of last year, he maintained a close interest in the sector and has been of amazing support to me during my tenure. To say that he will be sorely missed is an understatement.”
Jannels added that Hersch was an “incredibly warm and insightful man” who had played a significant role in the careers of many people within the industry.
“Our thoughts and prayers go out to his wife, Phileshia, and children,” Jannels continued.
“Let us all take a moment to mourn the loss of a good friend and outstanding colleague – and celebrate the life of a man who was such a positive influence on the lending industry.”
Alex Hammond, managing director of Also Communications, worked with Hersch on public relations for the trade body over the last two years, and said it was very sad news.
“He was one of my favourite people in the industry – a genuinely good man who worked tirelessly on behalf of the sector, and the ASTL, right up until the end,” he said.
The ASTL noted that under Hersch’s tenure completions grew from £885m to more than £4bn and membership of the association more than doubled.
It added that the reputation of the bridging industry vastly improved and representation with the Financial Conduct Authority (FCA), HM Treasury and other regulatory bodies also increased.
“Aside from these achievements, Benson was hugely respected and well liked throughout the industry and he will be sorely missed,” it added.
Advisers ‘not embracing technology is risky’ at the moment – Habito
The advice firms were speaking on Mortgage Solutions Television in association with Skipton Building Society, and highlighted that greater use of technology did not necessitate a change in business model and operation.
Habito head of mortgages Will Rhind emphasised how much consumer behaviours had shifted as a result of the pandemic and it was dangerous not to respond.
“Not embracing technology is risky at the moment. It’s not about the way you give advice,” he said.
Rhind noted that website tools for customers to do their own calculations on quickly and easily could be better for the borrower and broker.
“From a business point of view that’s good as you can help customers who are ready to transact and you can also guide those who aren’t ready to transact,” he continued.
“It’s not necessarily about what you do in the core model of your business, it’s how can you use technology to communicate or for other means.”
Trussle vice president of sales and operations Miles Robinson encouraged brokers to evolve to survive and adapt to the current ways customers want to transact.
And he noted this did not need massive investment to see results.
“There’s some real basic things people can do to improve,” he said.
“Even just a secure online document upload facility for customers where perhaps most customers might have posted them into the office, just getting something like that up and running so you’re not relying on getting physical documents from customers.
“Many lenders stopped needing certification [during the first lockdown] or changed their policies, they were putting the onus on the broker to verify the information was correct,” he added.
Skipton Building Society business development manager for London Michael Brown explained he had seen firms on his patch evolve in a number of ways.
“It’s interesting to see that some have adopted to take on technology through third parties and almost enhance their approach to technology and there are some who don’t use technology at all and still try to maintain their business,” he said.
“It depends on the type of clients and the type of situation.”
TSB cuts mortgage rates and Aldermore adds 90 per cent LTV deals
TSB’s first-time buyer and house purchase two-year and five-year fixes up to 60 per cent LTV are to be trimmed by up to 0.40 per cent.
And two-year fixes between 80 and 85 per cent LTV are to be cut 0.30 per cent.
Remortgage five-year fixes at up to 60 per cent LTV will be reduced by 0.35 per cent.
It comes after the lender has enhanced its offering in the high LTV space.
Aldermore offers 90 per cent LTV
Aldermore has launched new mortgages for borrowers with a deposit or equity of 10 per cent.
The lender will be offering deals for purchase and remortgage, featuring a two-year fixed rate at 5.18 per cent and five-year fix at 5.38 per cent.
Both deals come with a £999 fee.
More 2 Life adds two lump sum equity release plans
The two new deals have a Monthly Equivalent Rate (MER) of 3.51 per cent and 4.11 per cent respectively, or an Annual Equivalent Rate (AER) rate of 3.57 per cent and 4.19 per cent, with fees.
The plans will be available with the same criteria and lending features as the rest of the range, and are suitable for homeowners who are looking to borrow at least £10,000, up to a maximum of £1m, with loan to value (LTV) ratios ranging from five per cent to 48 per cent.
Stuart Wilson, corporate marketing director at More 2 Life, said: “With increasing numbers of people considering how their housing equity can support their long and short-term needs in later life, we are focussed on offering improved flexibility and support for our customers.
“Product innovation and development remain priorities and the addition of two new competitive lump sum flexi choice products will help to ensure that more customers are able to find a plan which reflects their unique needs.
“Over the coming years, our aim is to continue pioneering the development of modern lending solutions to ensure advisers across the UK can secure the best possible outcomes for their clients.”
Compare the Market launches online execution-only remortgages
The service has gone live with lenders including NatWest and Santander allowing borrowers to complete product transfers or remortgage to any of the other lenders on the panel.
It compares products from the existing lender with other deals on the market with borrowers able to choose whether to apply direct to a lender online or via a broker.
The comparison site is using Koodoo technology to operate and said more lenders would be joining shortly.
Compare the Market said it will continue to show intermediated mortgage deals for those customers who wish to use advice.
Mark Gordon, director of money at Compare the Market said: “The remortgage process can be time consuming and our new service will ensure that homeowners can get the best value for money by looking online.
“This service is designed for homeowners looking to remortgage onto similar deals. Compare the Market will continue to offer intermediated mortgage deals for those people who wish to seek advice.”
Koodoo chief executive and co-founder Seb McDermott added: “We are delighted to add Compare the Market to the platform, its scale and deep understanding of customer needs will help enhance the service we provide to our lender and broker partners.”
Halifax re-entering 90 per cent LTV mortgages
The lender is using special criteria which it said would help it to manage its service proposition and continue to lend responsibly.
The products are only available to first-time buyers, with at least one of any joint applicants needing to be a first-time buyer.
It does not include new build or other schemes and an enhanced credit score will be required.
Loan to income (LTI) is capped and 4.49 times income with maximum loans limited to £500,000.
Halifax noted that any current credit commitments will be deducted as ongoing in its affordability calculation even where declared as ‘to be repaid’.
“The loan amount must be affordable with these commitments deducted as remaining,” it said.
Advisers will be informed when submitting a decision in principle (DIP) if the case does not meet these criteria, and if LTVs on any already submitted cases are increased above 85 per cent they will also be subject to the new criteria.
Halifax’s re-entry into the 90 per cent LTV market is the latest of late as lenders are increasingly returning, with Accord, Platform and TSB all introducing more products in the sector in the last two weeks and Nationwide widening availability.
‘We will monitor service levels’
Jasjyot Singh, managing director of consumer and business banking at Halifax said: “We are committed to helping people take their first step on to the property ladder and while there have been record levels of mortgage approvals over the past few months, raising a deposit is still hands down the biggest challenge for first-time buyers.
“Reintroducing options at higher LTVs means we can support more people ready to get a foot on the ladder. We will monitor service levels to make sure we continue to be there for our customers.
“We also relaunched our Lloyds Bank Lend A Hand mortgage last month which enables first-time buyers to borrow up to 100 per cent of the mortgage with the support of their family,” Singh added.