Connells finalises Countrywide takeover
Countrywide will continue to trade under its existing brands and operate as normal. The surveying and asset management businesses will operate as separate entities to ensure competition and choice in their respective sectors.
Connells will invest into Countrywide’s technology and focus on growing the business.
The acquisition sees Countrywide relieved of £91.9m in debt and avoiding administration. All of its lenders will be repaid this quarter.
The deal was accepted in January by 51 per cent of Countrywide’s shareholders at a value of £130m.
The group will be headed by chief executive David Livesey and management from both companies will oversee the daily operations of Countrywide and the integration of the businesses.
Paul Creffield, group managing director of Countrywide will transition to a part-time role ahead of his retirement.
Livesey said: “Our companies have a long, shared history, competing healthily on the high street and in the industry, and sharing many of the same attributes – a clear strategy to be market leader, to move the property industry forward and to keep our customers and clients at the heart of our activities.
“We look forward to welcoming all our new colleagues into Connells Group, working together on our exciting future and turning Countrywide around for our shared success.”
DIFF podcast: ‘Silence is a form of complicity’ – the benefits of raising difficult conversations
It also heard about the steps two major financial organisations are taking to engage with people from diverse and underrepresented groups within their workforces.
Real examples were relayed of how diverse backgrounds can bring benefits in the mortgage industry.
Speaking on the podcast, Ali Crossley, managing director of partnerships at Legal & General Insurance, explained how important it was to be driving change within workplaces to make them more diverse and inclusive.
“It’s about how everyone can be themselves in the workplace no matter what they look like, where they come from, what they sound like or anything else,” she said.
“And any benchmarks or focus, on insuring that is absolutely the case, and making organisations really think about it, and no longer being silent on these matters, is important.
“Silence is a form of complicity, frankly. We’ve avoided these difficult conversations for too many decades and it feels now is a time for us to act.
“It’s fantastic that we’re having this conversation and that we see many organisations rallying around and really focusing in this space.
“I really hope this is the decade we see a seismic shift in these areas that need to have been sorted out years ago,” she added.
Helped brokers and underwriters to understand
Crossley was speaking to AE3Media ambassador at large Bharat Sagar, and they were joined by Saj Latif, national account manager at Lloyds Banking Group.
Latif discussed his experiences growing up and being the only Muslim child in a Roman Catholic school before then entering the world of finance.
He explained how his background had helped to support customers who may otherwise have lost out and gave a powerful example:
“Being able to understand how the Asian community works has definitely helped,” Latif said.
“Not many people understand some customs in Asian community, especially when it comes to financing and getting onto the housing ladder. They will build a deposit through effectively a social savings scheme called a Kamaytti.
“Say you have ten people saving £100 a month, and in ten months’ time will earn £1,000. This Kamaytti lets you pull out that £1,000 early, but you have to keep paying in for the full ten months.
“What I’ve previously done when I’ve talked to brokers about this, I’ve helped our underwriters to understand the concept, and this has definitely helped brokers and in turn customers to secure finance.
“Without that knowledge, the customers would not have had the finance to buy the house, certainly not at that time through us,” he added.
Role models and recruitment
Latif also noted that it “absolutely helps” to have role models from similar diverse backgrounds in senior positions.
“It does give me a sense of belonging and confidence that progression is there if you’ve got the ability and that’s probably not the same for some of my colleagues in other places,” he said.
He is currently involved in several initiatives within Lloyds Banking Group, including being part of a working party.
He is helping colleagues to understand the impact of racism and unconscious biases in a safe workplace space.
“I’m also going to be having conversations about recruitment policy and process and ultimately make it a whole lot easier for Black, Asian and Minority Ethnic (BAME) people applying for roles,” he added.
Reverse mentoring culture shift
Crossley then explained the reverse mentoring venture which L&G is introducing, where eight executives are mentored by a member of one of the diversity groups that have been identified.
“I’m really excited about this,” she said.
“The whole idea is to make sure that the people at the top of the insurance business can walk in the shoes to understand what it feels like, what the issues might be, to be in one of these groups.
“That’s the idea, to basically open the mind and open the eyes and to listen and to learn and its something you can only go on your own experience.”
The intention is then to roll it out across the organisation to other parts of L&G and also throughout the insurance business, not just senior level.
“We’re starting there because this is going to have to be a top-down cultural shift, and signal that this is the right thing to do, so people can be their full selves when they come to work,” she added.
Hub reveals reasons for releasing equity across three age bands
The profiles of the three age groups show how the balance of priorities shifts from clearing mortgage debt for the 55 to 64s, to gifts to family and refinancing equity release in the 75-plus age range.
The research compiled reasons for taking equity release among all of Hub’s customers in 2020.
Among 55 to 64s, paying off the mortgage was the biggest reason for releasing equity, at 29 per cent. This group also often released cash for home improvements 16 per cent of the time.
In the 65-to-74 age band, clearing mortgage debt and gifts to family were level-pegging at 18 per cent of borrowers. Some 19 per cent of this group used the money for home improvements.
Clearing debt other than mortgages was a spending priority for 12 per cent of customers across 55-to-64s and 65-to-74s.
For customers age 75 and over, 27 per cent were refinancing existing equity release loans. A further 23 per cent were gifting to family and 14 per cent improving their homes. Some 13 per cent were clearing mortgage debt.
“This data reveals the varied and changing priorities of equity release customers and illustrates general trends. No two customers’ circumstances are the same, so it’s essential for them to receive personalised advice,” said Simon Gray, managing director at Hub Financial Solutions.
“Unlocking housing wealth isn’t the right solution for all customers and that’s why they must receive regulated advice,” he added.
Moneybox partners with MAB to launch in-app mortgage advice
Moneybox’s team of mortgage advisers will work as appointed representatives of MAB under the brand Moneybox Mortgages, giving them access to the network’s panel of 90 lenders.
The advisers will be paid a salary, not commission, which Moneybox said would remove product-linked incentives.
The trial version of Moneybox Mortgage Advice will be available initially to certain groups of app users letting them generate a decision in principle using their phone.
Advice will be given to first-time buyers, home movers and those remortgaging – over the phone or through in-app chat.
Customers can use the app’s existing financial products, such as Home-buying Calculator and Time Machine, to track savings and know when they have enough for a deposit.
Information about the home-buying process and how best to save for a deposit will be offered alongside the new service.
Moneybox Mortgages will be offered to all users of the app later this year.
Ben Stanway, co-founder of Moneybox, said: “We want to give people the tools and information they need to save for a deposit, and then the qualified advice to help them make an informed decision on what the right mortgage is for them.
“By offering customers everything they need in one user-friendly service, we want to bring the joy back to home buying,” said.
Peter Brodnicki, CEO of Mortgage Advice Bureau, said: “We’re delighted to be working with Moneybox, which is a very well-respected, customer-first personal finance brand.
“Moneybox customers will now gain access to experienced advisers who will help them to secure a mortgage which best meets their needs – from the many thousands of options available. Investing in future first-time buyers in this way is hugely important, because saving for a deposit is only one of many considerations when planning your first purchase.”
RICS updates EWS1 cladding guidance to ‘unlock’ the market
The ‘valuation of properties in multi-storey, multi-occupancy residential buildings with cladding’ guidance was consulted on by lenders, valuers and fire safety experts for two months. The recommendations are set to be implemented by 5 April.
The new advice now requires buildings of any height with high pressure laminate (HPL) cladding to obtain an EWS1 form, a requirement which was not included in the original guidance.
Buildings which are five storeys or higher with combustible cladding with balconies that are linked or vertically stacked with combustible materials such as timber will also need a certificate.
For buildings over six storeys, an EWS1 form will be needed if there is cladding or curtain wall glazing.
Meanwhile, for buildings of five or six storeys, a certificate is required where there is significant cladding or HLP, metal composite material (MCM), or if aluminium composite material (ACM) panels have been used.
For buildings of four storeys or fewer, a form is needed if there are ACM, MCM or HPL panels present.
Properties which are five or six storeys tall will not need to be inspected if they do not have ACM, MCM or HPL cladding or if any cladding used covers less than a quarter of the building.
The guidance also said if a lender or valuer is sure a building owner has met the criteria in the consolidated advice note which was issued by the government in January 2020, an EWS1 form will not be needed. A form will also not be needed for buildings taller than 18 metres with a valid building control certificate in accordance with building regulations.
Buildings which already have an EWS1 form will still be valid despite the updated guidance and this applies to a whole building or block for five years.
Guidance for consumers will also be published to inform buyers and sellers of the risks around high-rise buildings.
‘Unlocking the market’
Dame Janet Paraskeva, chair of the RICS standards and regulation board, said: “This announcement is a crucial step in unlocking the market, by ensuring that only those buildings where there are risks of costly remediation as a result of safety concerns from cladding are subject to additional checks.
“The guidance is anticipated to result in a reduction in the number of EWS1 requests which will therefore allow more focus on the assessments of higher risk buildings, which should speed up the overall process while ensuring appropriate protection for lenders and purchasers.”
In a joint statement, UK Finance and the Building Societies Association (BSA) said they welcomed the final guidance and expected the number of EWS1 requests to fall as a result. However, they said it would still be up to lenders to make risk-based decisions.
“Government confirmation that it supports the guidance produced by RICS as an appropriate, risk-based and proportionate basis on which to proceed with valuation assessments, in line with the building safety Consolidated Advice Note published in January 2020 is a welcome and necessary step for lenders,” they said.
“We anticipate that many lenders will implement this guidance, which should see the number of EWS1 requests fall. However, this is a decision for each lender to make based on their own risk appetite.
“Those buying a flat should understand that a decision made by a valuer not to require an EWS1 inspection under the new guidance is no guarantee that fire safety remediation works will not be required in the future.”
Housing secretary Robert Jenrick added: “I welcome RICS new guidance which will mean nearly 500,000 leaseholders will no longer need an EWS1 form – helping homeowners to sell or remortgage more quickly and easily.
“We need a sensible, proportionate approach to risk and costs should only be incurred where they are absolutely necessary and less costly and intrusive mitigations can’t be put in place.”
“Backed by nearly £700,000 government funding, over 500 assessors have now started training so that where valuations are needed these can be done more quickly, speeding up the process for homeowners,” Jenrick said.
Smartr365 launches HomeBuyer app linking brokers and borrowers
The HomeBuyer app aims to improve lead generation and management for advisers and speed up the way borrowers share their information with brokers.
It is available for free on Apple and Android platforms from today and connects directly with the Smartr365 system.
By scanning a QR code or tapping a Near-Field Communication (NFC) chip in an estate agent window, on a property search site or in an email, customers can automatically and remotely enter their details, share them with a broker and connect instantly with their adviser to begin the application process.
Brokers and introducers can generate QR codes, weblinks and NFC chips, unique to their business, at no additional cost.
Client data is shared from the app with the broker, allowing them to work on the case in the Smartr365 platform.
There are also plans for borrowers to be able to search through products and criteria eventually.
To see the HomeBuyer app from the customer’s perspective, Smartr365 has released a demo QR code on the image above.
Conor Murphy, CEO of Smartr365, said: “Keeping pace with consumer demand is paramount in our service-first industry, and it was a natural step for us to find a way to bring all the benefits of Smartr365 to a borrower’s fingertips.
“Today’s announcement builds on our ambition to make each step of the mortgage journey better and is the latest in a long list of developments to the platform.
“Borrowers and introducers have never been able to interact with a broker in this way before, and we’re confident that this type of technology is the future of the mortgage process.”
Murphy added that by “seamlessly linking borrowers, introducers and brokers, the HomeBuyer app makes up the final piece of the puzzle for a truly frictionless and end-to-end mortgage journey through Smartr365.”
“Brokers benefit too, as they can now acquire leads and all required details through the app at no additional cost.”
Hinckley & Rugby BS relaunches 90 per cent LTV JBSP mortgage
The product lets older people put their name on a mortgage to help younger borrowers who cannot afford the total loan based on income and/or circumstances.
The society also offers reverse joint borrower sole proprietor mortgages, which allow younger people to support older buyers who are retired or close to retiring.
Its 90 per cent LTV mortgages come with a five-year fixed rate of 3.69 per cent, a two-year fix of 3.49 per cent, or a two-year discounted rate of 3.19 per cent.
Split-term loans are available. These let younger borrowers repay a section of their loan over a longer term, while the older borrower supports the short-fall in payments over a shorter term.
These arrangements work well with JBSP products, because they help to minimise monthly payments making the mortgage more affordable, the mutual said.
“We’re so pleased to introduce our joint borrower sole proprietor loans at 90 per cent LTV,” said Emily Smith, national account manager at Hinckley & Rugby Building Society (pictured).
“These products have been extremely popular in the past, enabling borrowers with smaller deposits and lower incomes to get on the housing ladder.
“Coupled with our split-term initiative, these products allow for more affordable repayments when adding an older relative to the loan,” Smith added.
The society lets four applicants sign for a joint borrower sole proprietor loan – with all four incomes considered.
Uinsure relaunches streamlined adviser platform with ‘shift in company culture’
The B2B insurance provider, which offers a panel of seven providers sharing common policy wording and five star Defaqto ratings, has also rebranded, which it badged a major milestone.
Lauren Bagley, chief partnerships and marketing officer at Uinsure, said: “The rebrand is not just cosmetic. It represents a maturing of the company, from the inside out that is setting the pace and responding to the demands of our industry by designing the experiences, products and services advisers and their clients expect.”
The search engine offers insurances for home, buy-to-let and landlords and non-standard and commercial insurance.
Chief commercial officer Martin Schulthiess said the upgrade is the first of many technology launches this year.
“Our technology has always been a key differentiator and now that we’ve upgraded this further, we’re able to be agile, which is now more important than ever against the demand from advisory businesses to digitise their businesses too.”
The ex-group managing director of Sesame Bankhall Group said approximately 675,000 customers go to comparison sites annually to buy home insurance. If the mortgage broker industry were to transact that it equates to potentially £367m in incremental profit over the next five years, he added.
“Think about the financial loss in revenue just flowing to another industry. It’s definitely worth selling home insurance,” Schultheiss continued.
“At a five-person brokerage, over a period of time, that equates to £100,000 a year of recurring revenue. That could be a pension fund, or simply recurring embedded value into their business, which is really powerful.”
Schultheiss said as consumers are moving from two-year to five-year fixes and lenders are simplifying product transfers, mortgage brokers are getting further away from their customer.
“The minute you send your customer to a price comparison website for home insurance, right next to that is the protection, the remortgage, the non-advised mortgage. Don’t assume [your customer] won’t be targeted for other products,” he said.
The platform produces an insurance quote across home, buy to let and commercial using three questions – name, date of birth and postcode – and has a consumer interface allowing consumers to progress the application later themselves.
Other features include access to new build postcode data up to six months before postcodes are minted by Royal Mail, so advisers can get new build properties insured more quickly.
The top 10 most read mortgage broker stories this week – 05/03/2021
Elsewhere, changes in high loan to value mortgage rates and the news that the chancellor had decided not to increase Capital Gains Tax, for now at least, grabbed brokers’ interest.
Big banks poised to launch 95 per cent government-backed mortgages
Landlords breathe sigh of relief as Sunak ducks CGT increase for now
Brokers give thumbs up to 95 per cent LTV government-backed mortgages
HSBC tweaks mortgage rates including 90 per cent LTV deals
NatWest and Halifax cut rates; Platform caps maximum LTI – round-up
Santander launches 90 per cent LTV remo deals and cuts rates
Buyers flock to Rightmove after Sunak reveals help for homebuyers
More lenders eyeing 95 per cent LTV govt-backed mortgages
Stamp duty holiday extended until June with tapering end date
Open banking proposals ‘spell the end of big, dumb mortgages’
It’s not the time for 95 per cent LTV mortgages ‘the only losers will be borrowers’ – Star Letter 05/03/2021
The article: Brokers give thumbs up to 95 per cent LTV government-backed mortgages garnered a response from Andy Wilson.
He said: “I’m going to be controversial here, but I do not believe now is the time to be promoting 95 per cent mortgages to anyone.
“Despite Covid, we have seen house prices increasing over the last year way beyond expectations, for a number of reasons, with the stamp duty holiday particularly being a strong driver. And yet, many of us were predicting that when the holiday ended, we could face house price reductions of some sort as demand fell back.
“The extension to the stamp duty holiday in the Budget will fuel another rush of buyers keen to avoid large stamp duty costs. Demand will fuel continued house price growth.
“However, by the beginning of October, stamp duty will be back to normal i.e. everyone paying it apart from some first-time buyers and the very few who buy below £125,000.”
He continued: “Add to this the potential issue with employment issues after Covid, when the furlough scheme ends. I believe many employers are keeping staff on using the furlough scheme, with the firm knowledge that many of them will have to be made redundant as firms fail or have to downsize.
“Very few employers will be admitting the fragile state of their firms to their employees at this stage.”
Negative equity risk
Wilson continued: “The inability to get a mortgage because of unemployment will once again fuel a slowdown in demand. Simple economics means that lower demand would further reduce prices. The 95 per cent borrowers would be most at risk of negative equity.”
He added: “The interest rates on this government supported guarantee scheme will mean costs are higher than for non-scheme borrowing of 90 per cent LTV or less; remortgages will be non-existent and product transfers may be restricted for anyone in negative equity.
“The lenders won’t lose out because of the protection the scheme offers; the only losers will be the borrowers.
“If our clients definitely want to take the risk, advisers have a duty to give them a strong warning of what could happen if prices fall – as we should do for higher LTV cases anyway – and this warning needs to be in writing, in bold, and with big capital letters,” he added.
Landlords should sell up by 2026
The second article to receive a comment was: Landlords breathe sigh of relief as Sunak ducks CGT increase for now.
Paul Barrett said: “This is a fantastic opportunity for landlords to get out of the private rental sector (PRS) at prevailing capital gains tax (CGT) rates. Landlords would be well advised to sell up before 2026.
“Many landlords were thinking of going in five years’ time anyway so selling one property per year will enable them to leave the private rental sector before the rate increase.”
Barrett added: “The government has effectively given a warning that CGT will increase, if landlords choose to ignore it, that is their lookout.”