Bill to ‘modernise’ planning outlined in Queen’s speech
Speaking today, the Queen said the government would help more people to own their own home with “laws to modernise the planning system, so that more homes can be built”.
The Planning Bill is set to be introduced in the autumn, after being trialled in the planning white paper last summer.
At the time, housing secretary Robert Jenrick said the government would make planning decisions “simple and transparent” with a focus on quality, design and the environment.
There will be an increase in homes built through modern methods of construction and developers will be given more certainty over what projects are established where.
This will be done by local councils identifying areas which are marked for either growth, renewal or protection.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “Without wishing to appear unduly curmudgeonly, I think most commentators could be forgiven for reacting to the latest government announcement by saying ‘we’ve heard it all before’.
“The announcement of a new planning bill aimed at helping to better designate land for development should be a positive step in the right direction towards building more homes in the UK – but we’ve had so many steps and promises in the past – all of which have led to – relatively little.”
“Successive governments have struggled to hit their building targets and recent research from Shelter suggests we may not do so until 2032. That is before we factor in the delays caused by Covid-19,” she added.
Davies said: “Having said that, the coronavirus crisis has reset so much about our everyday lives, and the government has made clear its desire to ‘build back better’.
“Implementing an effective housing strategy could play a big part in doing just that. There is a great opportunity for Boris Johnson’s government to be the first in nearly 20 years to make a real difference and deliver on its promises to address the current issues facing the housing market.
“The big challenge will lie in whether it can take a sufficiently long-term strategic view of what needs to be done and set in motion projects that will not be fully delivered until after the life of this Parliament and these politicians.”
Specialist platform OMS delivers facial recognition ID verification
The system helps to navigate the previous requirement for certified ID, usually provided by a solicitor. ID is verified by using machine learning and facial recognition to check the applicant is the genuine owner of an authentic passport, driving license or national ID card.
OMS covers product areas such as residential, buy-to-let, second charge, equity release, bridging, commercial plus general insurance and protection.
It has already integrated with four platforms – Iress, Twenty7Tec, iPipeline and Knowledge Bank – to provide users with product, protection and criteria searches.
Neal Jannels (pictured), managing director of One Mortgage System (OMS), said: “Despite information security, data privacy and compliance cited as top priorities, a lot of intermediary firms tend to struggle with digital transformation projects. Nivo is quick to deploy, simple to integrate and the benefits are quickly evident.
“It’s an exciting product which will speed up and simplify an antiquated ID verification process across a mortgage market which is swiftly catching up to other areas of financial services from a tech perspective.”
Matthew Elliott, chief development officer at Nivo, added: “Lenders and brokers love Nivo because it makes it easy for them to offer the kind of modern mobile experience that customers expect.
“We’re proud of having over 2,000 five-star app reviews, alongside the speed and efficiency results, which prove that customers want to engage in this way.”
Fleet cuts rates on 75 per cent LTV deals
The rate cuts apply to its five-year fixed deals. Both the standard and limited company products are down by ten basis points, from 3.59 per cent to 3.49 per cent.
Meanwhile five-year fixed rates have been cut on the lender’s Houses in Multiple Occupation (HMO) and Multi Unit Block (MUB) products by 20 basis points from 3.99 per cent to 3.79 per cent.
The standard and HMO/MUB products come with a 1.5 per cent fee while the limited company product has a 1.75 per cent fee.
Steve Cox (pictured), chief commercial officer at Fleet Mortgages, said: “Many landlords are looking to maximise the loans they can achieve and these product cuts to our five-year pay rates will ensure they are even more attractive to borrowers.
“Whatever property type they are seeking to purchase or refinance, and whatever their borrowing needs, these pay rate deals should be of greater interest.”
Second charge sees rise in large loans and home improvements – Grundy
In fact, we have seen an increase in interest from high-net worth individuals during the pandemic, and this has escalated since the start of this year.
From the end of the first Covid lockdown there has been more demand from high profile borrowers wanting large loans particularly for home improvements and property purchases. They have been turning increasingly to second charge mortgages to raise substantial amounts of money.
There is a need for greater flexibility in loan sizes which cannot always be obtained via a further advance or a remortgage to complete significant high end refurbishment projects. This in turn has led to us seeing a different type of borrower who typically owns high value property at £1m plus. With loan sizes available up to £500,000 at 65 per cent LTV and record low interest rates, second charges can be an attractive alternative to a remortgage.
Pandemic home improvements
The pandemic has changed the living requirements of many people who find themselves both living and working from home. They want more space for an office or to home school their children so there has been an uplift in extensions and loft conversions.
By being forced to spend more time at home due to lockdowns, people are looking to improve their surroundings so opt for a new kitchen or bathroom or completely redecorate the house. They may want to landscape the garden so they can have family and friends over in a Covid secure outside environment or create a children’s play area.
Often there is a large amount of equity in their home and therefore a smaller LTV. Their first charge mortgage rate is low which can mean it is often best advice to avoid disturbing existing mortgage arrangements; and in addition any early repayment charges would make it expensive to remortgage.
This is a great opportunity for brokers to advise people of another option, which is to raise the required finance via a second charge loan.
Because loan sizes are generous in the second charge market, terms can be flexible. For example, if a borrower has 15 years remaining on their first mortgage, they have the option of taking a second charge of up to 30 years. And this also includes flexible features such as the ability to make overpayments.
In addition, we are seeing more HNWs wanting second homes and using secured lending for the deposit. This can be for people living in city centre apartments wanting a rural retreat or a country or seaside bolt hole.
Conversely, there are borrowers taking advantage of the downturn in property prices in cities like London, particularly HNWs investing in buy-to-let property. The second homes and BTL investments have also been spurred on by the stamp duty holiday – now extended until the end of June.
We expect to see this trend in borrowers owning expensive property requiring larger loans to continue. The pandemic has changed our lives in many ways and our homes are seen as ever more important with people wanting to make improvements to their surroundings or acquire further properties for personal use or investment purposes.
CHL Mortgages hires former Fleet manager and trio of BDMs
Andy Valvona has stepped into the role of national accounts manager. Valvona’s career in financial services spans more than three decades and among his roles he spent almost three years in the same position at rival specialist lender Fleet Mortgages.
His role will be to introduce and establish the CHL lending proposition in the broker market.
The three BDMs have all previously worked for CHL. They will initially cover England and Wales between them.
Andrea Gizzy will cover London, Midlands and the North, Daniel Watson will cover the South and South West and Paul Flude will cover the South East and East Anglia.
Ross Turrell (pictured), commercial director, CHL Mortgages, said: “When building a new team, it’s vital to get the right people in the right roles. We have taken our time to ensure that we have recruited a team with the appropriate credentials who fully understand the ethos of the company.
“Andy is well known, vastly experienced and highly regarded across the intermediary mortgage market. His experience and connections will ensure that we build key strategic partnerships from the outset and establish CHL Mortgages as a real force within the specialist buy-to-let sector.”
Video: Brokers moving into commercial lending need ‘greater due diligence’ – Roma Finance
Speaking on the Roma Finance ‘Evolving high street’ discussion, hosted by Specialist Lending Solutions, Joe Aston, national sales manager at Vantage Finance, said “greater due diligence,” was needed for commercial cases.
He said that while some buy to let and commercial cases were comparable with regards to debt service cover and rental income, there was more to it.
“You want to keep an eye out for strength in the tenant, strength in the lease. Whether there are any break clauses and actually, is there a strong covenant on that site?
“How is the payment history in the last 12 months? Because crucially now, that’s vitally important.”
He also said it was a broker’s job to set the client’s realistic expectations and to prepare them for typically higher loan rates and the fact they would not be able to go to a mainstream lender.
Knowing the difference between an owner-occupier mortgage compared to a commercial investment before looking to place a case was also essential, he added.
Aston said: “Understand that it’s a very different proposition. If the company is buying the site, you need to get a really good understanding of their accounts, and how their financials look, before you even approach a lender.
“If in doubt, consult the experts. Use the help, and hopefully you’ll have a successful result.”
Watch the full panel debate [08:50] below, chaired by former editor of Specialist Lending Solutions, Owain Thomas, and featuring Harry Landy, MD, Enterprise Finance, Joe Aston, national sales manager Vantage Finance and Nick Jones, formerly commercial director at Roma Finance.
TMW reduces limited company rates; Mansfield BS launches deal with reduced ICR
This will include the reduction of its two-year fixed product, up to 75 per cent loan to value (LTV), with a £1,995 fee, now priced at 2.94 per cent, down from 3.19 per cent.
The two-year fixed deal, up to 75 per cent LTV, with a £999 fee, has been cut by 0.35 per cent to 2.99 per cent.
The five-year fixed with a £1,995 fee up to 75 per cent LTV, has been cut by 30 basis points to 3.34 per cent. The £999 alternative has been reduced by 35 basis points to 3.39 per cent.
All the mortgages are available for purchase and remortgage and come with free valuation.
In addition, TMW will lower the rate on its two-year, fixed-rate buy to let remortgage product, up to 65 per cent LTV, by 0.20 per cent to 1.39 per cent with a £1,995 fee.
This product offers free valuation and free legals.
Daniel Clinton, head of The Mortgage Works, said: “The limited company part of the market continues to grow as more and more landlords choose to build their portfolios through limited companies.
“These latest changes will improve our competitive position and showcase our continued commitment and support to limited company landlords.”
Mansfield launches five-year fixed buy to let with reduced ICR
Mansfield Building Society has launched a five-year fixed rate standard buy–to–let mortgage with a reduced interest cover ratio (ICR).
Rental income must be at least 125 per cent of the monthly mortgage payment calculated at five per cent — lower than the lender’s typical ICR of 5.5 per cent.
For higher rate taxpayers purchasing a property, rental income must be at least 145 per cent of the monthly payments calculated at five per cent.
The product is priced at 2.74 per cent, has a £199 application fee and £1,300 completion fee. There is also a three per cent early repayment charge for the first three years.
Andy Alvarez, head of mortgage sales at Mansfield Building Society, said: “We think the new product will appeal because it comes with the certainty of fixed repayments over five years and the reduced ICR will enable landlords to perhaps borrow a little more than our rental income may ordinarily allow.
“This means that landlords may be able to consider new property opportunities or raise extra funds for light refurbishment work on an existing property.”
Foundation cuts fees and First 4 Bridging adds new BTL product
The product fees were lowered to 0.75 per cent, down from one per cent, on the F1 two-year fixed rate at 2.99 per cent, and the F2 homes in multiple occupancy (HMO) two-year fixed rate at 3.34 per cent. Both are up to 75 per cent loan to value (LTV).
The fee was cut to one per cent, down from 1.5 per cent, on the F1 five-year fixed at 3.24 per cent, also with LTV up to 75 per cent.
The new sums represent up to 1.25 per cent off Foundation’s standard fees on buy-to-let products.
The range of loan sizes on all three products is £200,000 to £1m.
George Gee, commercial director at Foundation Home Loans, (pictured) said: “Cutting fees provides and ultra-competitive offer to landlord borrowers for purchase or remortgage. We’re acutely aware that landlords want to keep costs as low as possible.”
First 4 Bridging and Castle Trust
First 4 Bridging and Castle Trust Bank have partnered on a buy-to-let product for first-time and portfolio landlords who are purchasing or remortgaging.
The product has a five-year term, with a two-year early repayment charge at 4.5 per cent.
The loan size range is £150,000 to £2m, and the maximum LTV is 75 per cent.
It covers holiday lets, HMOs, portfolio loans and refurbishments.
There is a two per cent arrangement fee.
Donna Wells, director at First 4 Bridging, said: “We are experiencing a huge uplift in activity across all areas of buy to let. Many landlords are looking for lenders with appetite for lending based on unconventional circumstances. As such, Castle Trust has become a great option, and we expect this to be a popular product.”
Rob Oliver, sales director at Castle Trust Bank, added: “This semi-exclusive product lets landlords refinance or sell after two years without penalty.”
Maslow Capital completes £14.2m facility on Fulham Palace Road scheme
The development by Mountwood Homes will revitalise a disused brownfield site on Fulham Palace Road to provide 34 homes and commercial space.
The scheme will use innovative green technologies including solar panel roofing, rainwater harvesting, heating by air source heat pumps and cooling by air extraction and circulation.
It includes green roofs, secure underground parking for 60 bicycles and six electric vehicle charging points.
It’s expected to complete in Q1 2023.
The gross development value of the project is £28m.
The deal follows on from Maslow Capital funding a £69.9m residential scheme in Bracknell, Berkshire.
Emma Burke, deal origination, at Maslow Capital, said: “Charles and the team at Mountwood are revitalising a previously disused brownfield site in an area that has seen huge growth in retail demand as the result of the pandemic.”
Charles Rahder, owner and chief executive at Mountwood, said: “We chose Maslow as funding partner from a number of options owing to its ability to meet expectations and timeline. We look forward to working together again on future projects.”
Ying Tan to exit Dynamo after Connells Group buyout
Tan (pictured) leaves Dynamo after 15 years, during which he guided the business to a plethora of industry awards.
Tan said his mission when setting the business up was “to be respected by the clients and the marketplace as one of the leading mortgage intermediaries in the UK.” He feels this has certainly been achieved with his relentless drive for excellence.
He said: “Every entrepreneur dreams of starting, building, successfully scaling and exiting a business when the time is right; and this certainly represents the right time for me.”
“It’s been an amazing journey, having started from a tiny office in Guildford with no windows to operating out of a 13,000 sq ft office which has capacity for up to 200 people. Last month was a record revenue month for the business in our 15 year history. The Dynamo rebrand took us to a whole new level and the company is in a fantastic position to continue moving forward, at pace. It has a great new owner in Connells Group who has a proven track record with companies they have acquired and there are significant synergies which Dynamo will greatly benefit from.”
Tan said: “From a personal perspective this was too good an opportunity to turn down. It feels fantastic to leave the company in a strong position with records being broken and poised for continued growth having recruited aggressively since the beginning of the year. No one person is bigger than the business and I’m sure that it will continue to be a huge force in the intermediary market for many years to come. I’d like to thank everyone for their support over the years, the amazing staff and particularly my leadership team who have provided the backbone to the immense success of this wonderful business.”
Adrian Scott, Connells Group mortgage services director, said: “Dynamo has built an impressive reputation across the intermediary market and Ying has been the driving force behind this. He leaves the company operating at the top of its game and we are delighted to have been able to acquire it on the back of company records and with such a strong infrastructure in place for continued growth. The company is a great fit for Connells Group and I look forward to working with the strong Dynamo management team.
“I’d also like to take this opportunity to wish Ying well in his future endeavours and I’m sure he will continue to achieve phenomenal success in whatever he chooses to do next,” Scott added.