The mutual has also seen an uptick in its retirement interest-only (RIO) lending and is considering adjusting the affordability calculations on the product, with the expectation it will form five per cent of lending.
Box clever on criteria
Cammy Amaira, director of sales and marketing at the mutual, told Mortgage Solutions that after growing its lending by 45 per cent last year to £84m, it was aiming to reach £100m this year.
He noted the board had made a strategic decision to look for growth and was doing so by entering new areas and tweaking its lending policies and criteria to do so.
“We’ve gone into areas we weren’t in before and that opens up lots of possibility,” Amaira said.
“We have to box clever in these areas and a lot of it now is criteria and service being key drivers.
“We’re looking at tweaking policy and there’s opportunities for us to open and improve criteria, for example, potentially increasing the maximum value on buy-to-let loans.
“And we also have to get the right balance, find definite areas where it fits with our plan and get business in at the right price – there’s a lot of areas we are in where rate is not the key driver,” he added.
Earlier this year sister title Specialist Lending Solutions exclusively revealed Tipton and Coseley would be entering limited company buy-to-let and Amaira confirmed this was expected to be launched by the end of October.
It also has plans for a new broker portal to be launched towards the end of the year.
RIO growth
Tipton and Coseley was one of the first lenders to launch a RIO product after the FCA’s classification change and while the product was very slow to gain traction across the market, it is now improving.
“The first six months were very slow but the big positive was when other lenders came in and there was also delay in brokers getting going as some compliance departments hadn’t signed off,” Amaira continued.
“In last six months it’s gone really well and we’re aiming to do five per cent of our lending on RIO, so we’re on course for £5m with completions and our pipeline.
“More brokers are aware of it now and it’s a good stepping-stone between standard residential and equity release or later life lending.”
However affordability is still a big challenge as the loan has to be affordable for the lowest earner when underwriting.
“Life insurance can help, and we’re looking to revisit the older affordability calculations, with the hope of using the Office for National Statistics (ONS) calculations for older people as their costs are less than those of younger people,” Amaira added.
Mortgage prisoner support
The mutual is also keen to help support mortgage prisoners following the consultation by the FCA to alter affordability requirements for these people.
However there are still many caveats to this as the policy is still in construction with limited information available to lenders from the regulator.
“If it all fits in, we are keen to be part of helping those people, but it’s going to be tricky, because when we remortgage these prisoners our standard variable rate (SVR) can’t be bigger than their current SVR,” Amaira said.
“We’re still waiting to find out the final rules and being told a little bit, but not enough to make an informed decision.”
