Claims companies targeting HMOs post-PPI – Whittaker
Whittaker said claims firms had moved on to the sector following the end of payment protection insurance (PPI) claims in August and the introduction of licensing requirements for houses in multiple occupation (HMO).
He cited cases where CMCs had targeted tenants in HMOs where landlords had not yet secured a licence for the property.
This included five students from Leeds who reclaimed around £15,000 from their landlord who only applied for the licence halfway through the tenancy.
‘Big money to be made’
Speaking at FSE Midlands, Whittaker said: “Ambulance chasers are moving from PPI to HMOs and they are targeting tenants suggesting that their landlords don’t have the necessary licence and they can take them to court.
“There is big money to be made here and these ambulance chasers are suggesting to tenants they can take landlords for £20-£30,000, and they’ll be taking ten per cent of this.
“This will be bad news for your customers if they don’t know what they’re doing,” he added.
Whittaker also noted that many councils were dealing with the regulations and applications differently and many were particularly slow in responding.
But he suggested landlords should not worry too much about the turnaround time in receiving a licence as long as they had put their application in.
Together completes third securitisation
The £332m Together asset-backed securitisation (TABS 3) has a 95 per cent advance rate, with 79 per cent of the issued notes rated Aaa(sf) by Moody’s and AAA(sf) by DBRS.
Since Together completed its inaugural public £275m RMBS in September 2017, the group has raised or refinanced £3.7bn of debt facilities to support its lending activities. In November 2018, the group issued a £286.9m RMBS.
TABS 3 is supported by a portfolio of first and second charge owner-occupied and buy-to-let residential mortgages, secured against properties in England, Wales and Scotland, and refinances assets forming part of the group’s AA rated £1.25bn Charles Street facility.
Lloyds Bank Corporate Markets acted as arranger and joint lead manager accompanied by BNP Paribas, Natixis and NatWest Markets as joint lead managers on TABS 3.
Gary Beckett, group managing director and chief treasury officer of Together, said: “This is our third successful public RMBS in just over two years and the strong level of demand we received from investors, many of whom had invested in our two previous RMBS transactions, demonstrates the continued attractiveness of the group’s long-term growth story.”
Fiduciam completes first case in Scotland
The bridging lender has completed its first transaction in Scotland, a £1.14m loan over a 24-month term to care home owners.
The loan will allow the owners of the care home to refinance their existing borrowing, which had been used to fund the renovation and reopening of the property.
Fiduciam said it will also potentially provide further funding so the borrower can extend from 32 to 50 beds.
It said it had created a specific set of lender requirements and solicitors’ instructions for the Scottish market, alongside a ‘Scots law’ facility template and security documentation set, which it argued means it can now cater for the Scottish market based on local customs.
Clint White, head of property lending at Fiduciam, said the Scottish market was buoyant at the moment, with plenty of opportunity for the lender in the Glasgow and Edinburgh areas.
He continued: “Our aim is to be the first port of call for any broker with a transaction to place in Scotland. We can move quickly and have excellent solicitors on board, who are proactive and commercially minded.”
Second charge lending volumes jump 12 per cent ‒ FLA
The growth continues the strong performance of the sector over the last 18 months.
The value of new business arranged in August rose by 10 per cent on an annual basis to £102m.
Over the three months to August the value of new business jumped 14 per cent compared to the same period of 2018, while the number of agreements rose 16 per cent.
And the increases were even more pronounced when looking at the 12 months to the end of August, up 17 per cent on the value of new business and 19 per cent on the number of new agreements.
Fiona Hoyle (pictured), acting director general and head of consumer and mortgage finance at the FLA, said: “The second charge mortgage market recorded its twelfth consecutive month of double-digit new business growth in August.
“In the first eight months of 2019, new business volumes were 21 per cent higher than in the same period in 2018.”
Elsewhere, the FLA reported that retail and online credit was flat in August at £637m, while there was also no movement on car finance at £2.5bn.
However, the value of new credit card and personal loan business dropped one per cent to £4.42bn.
Holiday lets are a growing source of new business for brokers – Harpenden BS
Holiday lets have always been a niche area of the mortgage market, but it is one that we believe will grow significantly.
We have been an active lender in this space for many years and always see activity increase after the summer holiday season. Whether people have been overseas or somewhere in the UK, there’s more interest when they return fresh from their travels.
This year we are expecting to see more activity as the shape of the holiday and buy-to-let markets change. We believe there are a number of factors driving this change.
Each year ABTA, the travel trade association for tour operators and travel agents, assesses the sentiment of UK holiday makers. Its 2018 report shows that people are still generally taking holidays overseas.
However, there was a seven per cent increase in the amount of people who are confused about the effect Brexit will have on their holidays, up to 43 per cent from 36 per cent in the previous year.
More were also concerned about the cost of their holidays, up to 54 per cent from 51 per cent, and worried that it will be harder to travel, reaching 48 per cent compared to 43 per cent last year.
This analysis was conducted before Boris Johnson became prime minister, when the threat of no-deal increased and the value of sterling fell.
One can only assume that the confusion is set to increase and could encourage more people to remain onshore for their holidays.
In June of this year, holiday lettings business Cottages.com said it had seen 23 per cent growth in portfolio recruitment in the first six months of the year compared to the same period in 2018.
It attributed this to landlords taking advantage of the predicted UK growth in staycations.
In addition, there is a belief that the rise is being driven by owners moving from buy-to-let to holiday lets as a result of the regulation and taxation changes in the private rental sector.
As has been well documented, profits in buy-to-let properties are under pressure.
Clearly, if the demand for domestic tourism continues to grow, enquiries about holiday let properties will increase.
A growing segment
Lettings agencies are also reporting as much as 25 per cent growth in bookings year-on-year.
We know from experience that holiday let mortgages can be complicated and this is one reason why many lenders shy away from them.
This is a niche area and suitability cannot be assessed through computer modelling alone.
The opportunity for brokers, and those looking for extra income from second homes, is growing and many indicators are pointing to this being a continuing source of new business.
Majority of brokers feel confident about business in 2020 – Shawbrook
The lender’s Broker Barometer found that given the current political climate, 25 per cent of the 169 commercial brokers questioned saw no change in business volumes in 2019, suggesting they had not been impacted by the adversity surrounding Brexit.
A quarter of respondents said they had seen a 10 per cent increase in business volumes over the year, while 22 per cent saw a 20 per cent rise, up from the 18 per cent of brokers who reported the same growth in 2018.
Furthermore, 62 per cent of brokers said they had seen investors diversifying into the commercial property market.
The top three challenges that the commercial mortgage brokers surveyed expected their businesses to face in 2020 were the impact of Brexit (58 per cent), valuation issues (53 per cent) and lending restrictions (36 per cent).
Emma Cox, sales director for commercial mortgages said: “Despite the broker community showing some concern around the impact of Brexit as the deadline draws near, their confidence in business and the commercial property market for 2020 is still high.
“As stated in our UK Commercial Property Market Report, there is still opportunity for experienced investors to grow and diversify their portfolios, providing they do their homework and seek appropriate advice.
She added: “Clearly the impact of Brexit is unpredictable outside of the standard uncertainty commentary, but there is still opportunity to grow, as the barometer results show, with many brokers reporting an increase in business volumes.
“As we have always stated, longevity and sustainability of market are key, and investors who work with experts across the lender and broker spectrum will be best placed to take advantage of future value that presents itself.”
Lendy administrators taking legal action and PII claims against borrowers
At present around £11m is expected to be available for investors to claim from the failed firm, which is likely to be allocated in the next three weeks.
In the latest update to investors Damian Webb, joint administrator at RSM Restructuring Advisory, said there has been significant activity in realising the Lendy loan book and he hoped further cash would be recovered.
“Due to the commercially sensitive nature of the negotiations I do not wish to go into detail about specific loans, however at an overview level the process is moving forward and there is real traction on all aspects of the loan book,” he said.
“We anticipate further loans will be realised prior to Christmas and these will be promptly distributed to investors’ client accounts.
“In addition, to the realisation of the underlying property assets all other actions are being taken to maximise realisations for investors. This includes making claims against borrowers’ personal guarantees and litigation in respect of professional indemnity claims.”
When Lendy collapsed two thirds of its outstanding loans worth a combined £152m were in some form of formal insolvency process.
And investors were warned they were likely to receive just half their money back – with some potentially getting almost nothing back.
The administrators also revealed other failings and serious questions about how the firm was run, noting that further anti-money laundering checks were required.
In the update RSM said that currently around £11m awaiting distribution was being held within the client account and it anticipated this being allocated within the next 21 days to investor accounts.
It confirmed that 77 per cent of the required additional checks had been completed and will make the case available once all these remaining checks have been finished.
BM Solutions launches portfolio support team – exclusive
The lender piloted the team with the aim of improving application to offer timings for these cases and the dedicated team will now be available for all portfolio applications.
The pilot ran over a two-month period and in that time the team reported a quicker app to offer turnaround, faster decisions from the underwriter and speedier evaluations.
A specialist case handler from the team will contact brokers within 24 hours of submitting an application, as well as being on hand to answer any questions and to offer support throughout the process.
The team is available 9am-5pm, Monday to Friday, and will look after applications through to offer stage.
In August the lender increased the maximum number of buy-to-let mortgages from three to five with Lloyds Banking Group, as well as the maximum value of buy-to-let mortgages from £2m to £3m.
Phil Rickards, head of BM Solutions, (pictured), said: “We have had superb feedback on the number of enhancements we’ve been making to make it easier for brokers to do business with us, including increasing the property portfolio limit from three to five and improving five-year stress rates.
“We also made it easier for customer profile forms to be submitted via our mortgage portal and the BM Portfolio team is yet another way in which we’re delivering on our commitment to great service.”
PMS and Sesame add Axis Bank UK to lender panels
Members will have access to the full core buy-to-let product range from Axis Bank UK.
Stephanie Charman, specialist lending relationship manager at Sesame and PMS, said: “We are very pleased to partner with Axis Bank UK.
“As a specialist lender that only operates through mortgage intermediaries, they also offer the added attraction of a range of flexible lending criteria and product features that will appeal to experienced buy-to-let landlords.”
Jason Neale, head of buy-to-let lending at Axis Bank UK, added: “The opportunity to work with such quality firms as PMS and Sesame is one we appreciate and really look forward to.”
Optimum Credit hits £1bn lending milestone
Last month, the lender processed a record number of new deals.
Hitting the £1bn target was milestone in its five-year history said the firm.
The Cardiff-based company was acquired by specialist lender Pepper Money in October 2018.
Chief executive Sam Marshall (pictured) said: “When we started up the company we set out to become the biggest second charge lender in the UK, a target we achieved very quickly. Our acquisition by Pepper Money will enable us to continue to grow, and we look forward to further successes in the future.
“Despite some uncertainties in the lending market given the ongoing Brexit discussions, we have found the second charge market to be very buoyant.”
The number of new second charge mortgage deals taken out in July came to 2,656, according to data from the Finance & Leasing Association (FLA)
The figure represented an increase of 23 per cent on July 2018.
The value of that business has risen 17 per cent to £115m for July this year compared to the same month in 2018.