Barnard: Bridging growth at Masthaven an unexpected trend of lockdown
The bank has also introduced an income declaration for pipeline customers who submitted cases prior to the outbreak and subsequent economic impact, along with vastly reducing the number of people working in offices as it adapted to the sudden changes.
Director of intermediaries Rob Barnard (pictured) told Specialist Lending Solutions he was cautiously optimistic following an increase in sales over the last three weeks since property market restrictions were eased.
As is typical across the market, Barnard explained the key weeks of lockdown had seen lower business volumes than would usually be expected.
But he noted this was now recovering and Masthaven was able to able to dedicate time to pro-active outbound sales activity and this was gaining traction.
“We’re starting to see green shoots which is encouraging but we have to tread very carefully,” Barnard said, adding that it was good to see lenders opening out into the 90 per cent loan to value (LTV) area.
One of the more unexpected trends to come though this period is a growth in bridging activity at Masthaven, Barnard noted.
“Bridging has remained really robust and we have picked up some business from that,” he said.
“We introduced an automated valuation model (AVM) at up to 50 per cent LTV, were pleased with it and have since increased it to 60 per cent LTV – that has been successful.”
He added that in the unfortunate situation where some lenders had been forced to pause their operations, Masthaven had been able to pick up new deals and relationships.
“It is interesting to see where the support comes from and it’s not always the common brokers – we have seen a spike in new registrations,” he continued.
“I think people normally register when they’ve got a bit of business to write with you.”
And having previously worked at non-bank lender Pepper, Barnard was sympathetic to those lenders that have been hit hardest in the crisis.
“The non-banks have been hit three ways: the securitisation markets have been closed, the cost of funds has gone up, and a good chunk of borrowers might have been hit by payment holidays,” he said.
“We have been able to stay open right the way through, but in non-bank lenders you do have to work to meet funders’ requirements.”
Prudent income approach
As with many others, introducing AVMs was one of the key changes the lender made to navigate the situation – this enabled it to process new applications and also go through its pipeline.
However, given the significant changes over the few weeks, the lender emphasised a cautious approach when underwriting its pipeline, but noted that borrowers were also being prudent.
“We’ve taken a bit more caution with applying the AVM regime to checking income and did introduce a standalone form to check with people,” Barnard said.
“I think people are sensitive in the main and they know that if their finances have been affected is it the right time for them to take on a mortgage?”
As far as practical operational changes and adaptation, Barnard explains that the lender had only moved into new offices in central London towards the end of last year.
This had prompted it to test business continuity plans and other scenarios, which resulted in a serviced office space being introduced in Reading as well.
He says this served the bank well and there are typically fewer than 10 people combined working in these two locations at present, with the whole operation being able to work remotely when needed.
Broker confidence remains
Barnard concluded by discussing the lender’s broker research which found there still remained a decent level of confidence in the market.
Of more than 200 intermediaries quizzed by Masthaven in May, 71 per cent said they were either confident or very confident in the market’s prospects for the next 12 months. A quarter said they were unsure.
The survey also found that half of specialist intermediaries were now using video calls to liaise with customers, while 42 per cent were sending regular email updates.
Only four per cent of brokers have introduced live chat platforms on their websites while just two per cent extended opening hours since the start of the pandemic.
But notably, a third of specialist intermediaries said they were recommending lenders based on their access to reliable funding.
“I think it’s made brokers think about making the most of their business, to make sure their clients don’t go back to the lender direct,” Barnard said.
“I think the confidence is still there, it’s the market that’s been taken, not the confidence.”
Mint Bridging launches lockdown development products
For firms looking to continue with developments while following safety guidelines relating to the pandemic, Mint has released a new development product.
This is based on a maximum four-house scheme with a loan value of up to £750,000, and a rate of 0.89 per cent. The product is available up to 55 per cent loan to gross development value (GDV).
Alternatively, for those impacted by building delays or unable to offload their premises due to market changes, Mint is offering a development exit loan which is available to those seeking up to £750,000.
It is based on a maximum six-house scheme and has a maximum loan to value ratio of 65 per cent with a rate of 0.89 per cent.
Sinead Moynihan, head of sales at Mint Bridging, said: “We have, like others in the market, to this point offered solely new bridging loan products, with Covid-19 in mind.
“However, we noticed a gap in the market for development-specific products and knew that it was necessary to widen our product portfolio with development loans that measure up to the needs of our brokers and borrowers at this difficult time.
“We hope these two new loans will help many who’ve found themselves in a difficult situation amid the coronavirus crisis yet are eager to keep Britain building,” Moynihan added.
Pepper limits all lending to 80 per cent LTV and withdraws BTL purchases
Lending at 80 per cent LTV is also being removed across buy-to-let, limited company buy-to-let, debt management plan and select residential ranges.
Due to the coronavirus, all applications to Pepper are currently being manually underwritten.
It comes as the lender restarts full physical valuations in England for pipeline cases and new business.
Full risk assessments will be carried out to ensure the safety of residents and surveyors.
Pepper is currently not using automated valuation models (AVMs) or desktop valuations.
The lender took all products off sale last week to make way for its new ranges.
Applicants who had county court judgments (CCJs) or defaults as recently as six months ago will be considered, but only at a maximum LTV of 70 per cent.
Pepper is also taking applications from borrowers in debt management plans at a maximum LTV of 75 per cent.
Rates on offer from the lender start at 3.15 per cent.
Roma and Aspen increase LTVs and lending limits – round-up
This is a five per cent increase on previous products following the reintroduction of physical valuations in England.
The maximum LTV on its buy-to-let range will remain at 75 per cent.
Roma Finance returned to the market in May with automated valuation model and desktop valuation products which will remain available.
Scott Marshall (pictured), managing director at Roma Finance, said: “We are delighted we are taking another important step in this challenging time.
“The pandemic has given businesses a new perspective on continuity and innovation. Adaptation is essential and we will continue to be proactive and support brokers, customers and the overall industry.”
Roma Finance was also recently added to the Right Mortgage and Protection Network’s lending panel giving network members access to all the lender’s products.
Hedd Richards, national account manager at The Right Mortgage and Protection Network added: “This partnership is a great opportunity for both businesses and our clients, and I am looking forward to a future full of success.”
Aspen ups LTVs and loan amounts
Aspen Bridging has increased its maximum LTV to 75 per cent and raised its maximum loan amount to £3m net.
The lender will make use of physical and desktop valuations to process applications.
In its new rate card, the lender’s Flat and Stepped Rate Products include residential and light refurbishment, residential and medium refurbishment, homes in multiple occupancy, prime semi-commercial and prime commercial property.
An underwriter will visit each property and either meet the client in person or over a video call.
Aspen will also lend on residential properties for loans up to £1m net and a maximum 75 per cent LTV using desktop valuations where necessary.
All Flat Rate Products have a rate of 0.89 per cent, with terms running from 12 to 14 months while Stepped Rate Products have an initial rate of 0.59 per cent for six to 12-month terms.
Jack Coombs, director at Aspen Bridging said: “During the crisis we stayed true to our bridging market commitments, a decision which was warmly welcomed by the broker community and as such applications have continued to be submitted at exceptionally good levels.
“We have also learnt how to further streamline our processes during lockdown, and that is why physical and desktop valuations will continue to be utilised, which mark another exciting step forward.”
Landlords likely to sell as confidence drops to ‘all time low’ – TMW
According to the research, which was compiled using BVA BDRC’s Landlords Panel in April, just 19 per cent of landlords said they felt “good” or “very good” about the next three months.
This is down from the 37 per cent of landlords who felt positive about the following quarter in Q1 2019, and the lowest the measure has been since BVA BDRC first started collecting data in 2007.
More landlords are looking to sell properties than buy, as the research revealed 21 per cent wanted to sell in the next 12 months while 12 per cent plan to buy property.
This is a one per cent decline on the number of landlords who said they would be selling in the next year, and a two per cent drop on landlords looking to make a property purchase.
TMW’s barometer found that landlord confidence in capital gains and rental yields had also reached an all-time low.
Some 15 per cent of respondents said they were confident about their capital gains for the next three months compared to 25 per cent in Q1 2019. As for rental yields, 24 per cent felt confident about the next quarter down from the 46 per cent who responded positively to the question last year.
According to TMW’s barometer, just 16 per cent of landlords have seen an increase in tenant demand while 24 per cent have seen demand decline. Some 33 per cent said they saw no change.
The report was conducted with the responses of 843 landlords between 20 March and 2 April. It asked landlords if they thought the coronavirus pandemic had affected their lettings business.
It was found that eight in 10 landlords had been negatively impacted by the pandemic, with those in London and the South West being the most severely affected.
Some 43 per cent of landlords predicted they will suffer financial hardship following the pandemic, and those who are looking to exit the buy to let market the soonest feel they will be hit the hardest.
Further, the survey found that self-employed landlords thought they would be worse affected with 54 per cent saying the pandemic would have a significant negative impact on them.
Pepper withdraws all products ahead of new range
Brokers have until 6pm tonight (21 May) to secure one of Pepper’s existing deals with a decision in principle (DIP) illustration status.
Full mortgage applications for those cases must be submitted with fees paid by 12pm on 26 May. Pepper will not be able to honour any cases that miss these deadlines, it said.
Full details of the valuation process alongside a refreshed range of products and rates will be available on 22 May.
Paul Adams, sales director at Pepper Money (pictured), said: “Last week’s government guidance enabling surveyors to carry out property inspections means that we are now able to recommence physical valuations in England.
“This means that we can refresh our range to reflect the re-introduction of physical valuations, with products that continue to provide options for brokers to serve their clients.
“As a non-bank lender, we are doing all that we can to support our intermediary partners throughout this difficult period, and we continue to explore opportunities to build our proposition in a way that suits the market conditions and the needs of borrowers.”
Beneficial Network adds Aspen Bridging to panel
The network has 120 advisers who will now be able to access the lender’s bridging range.
All members will have access to the lender’s introduction technology via a dedicated web portal which will give brokers a decision in minutes on any bridging case.
The company will also deliver training with webinars, one-to-one support and eventually broker visits all planned to further promote expertise in the sector.
Aspen Bridging director Jack Coombs (pictured) said: “Now more than ever, bridging has a vital role to play in assisting brokers and their customers as a core financial solution to their current plans.
“We will work closely with the Beneficial community to relay this message and meet their needs in a timely manner.”
Beneficial managing director Jason McDonald added: “Beneficial welcome a new innovative lender to our panel. Aspen Bridging will be well received by our network advisers and we look forward to our future synergistic mutual relationship.”
Paradigm partners with Paragon Bank
Earlier this week Paragon confirmed it had restarted physical valuations with it’s in-house surveyors.
Portfolio products are available for houses in multiple occupation (HMOs), multi-unit blocks, limited companies and liability partnerships for properties in England, Wales and Scotland.
Portfolio deals are available to landlords with four or more mortgaged properties and for expatriates.
Non-portfolio products, for landlords with up to three mortgaged properties and expats, are available for single self-contained units and consumer buy-to-let customers.
John Coffield (pictured), head of mortgages at Paradigm Mortgage Services, said: “Ensuring our member firms have access to as broad a range of mortgage products as possible is absolutely vital and we are therefore very pleased to be bringing Paragon Bank on board.
“We’re looking forward to working with the team at Paragon and to ensuring our firms have access to its proposition.”
Paragon launched the second phase of its intermediary portal earlier this year which includes the introduction of an alerts service to keep brokers informed as their application moves through the process.
Hampshire Trust Bank promotes BDM
Attridge will report to sales director Marcus Dussard (pictured).
Dussard said: “We always look internally to see if we have the talent able to fill any new role that comes up.
“Like each and every member of our team, Charlie will be instrumental in carrying out the exciting plans we have for the second half of the year to help support the market as it begins to move again.
“During my time at HTB, Charlie has shown himself to be a very capable individual ready for that next step in his career and he will be able to showcase his talents in the field as soon as it is safe to do so. In the meantime, he’ll be available via the normal channels.”
Knowledge Bank criteria
HTB has also added its criteria to the Knowledge Bank platform, joining over 200 lenders on the mortgage criteria search tool.
Dussard added: “We are delighted to be able to join Knowledge Bank to bring our specialist lending proposition to an even wider audience of professional brokers and intermediaries.”
Nicola Firth, CEO and founder of Knowledge Bank, said: “The team at HTB have really embraced Knowledge Bank and fully understand how we can not only get them in front of thousands of brokers immediately, but also how it fits into their overall distribution strategy.
“With traffic on our site increasing dramatically since the start of this pandemic, it’s a great time for HTB to come onboard and we look forward to working with them.”
Zephyr restarts BTL lending
The buy-to-let (BTL) lender was forced to pause its applications as a result of the coronavirus restrictions but is now resuming operations with mortgages available at up to 60 per cent LTV with a maximum limit of £1m.
Two, five and seven-year fixed rate products are available with rates starting from 3.19 per cent for a two-year fix with 1.5 per cent product fee.
In a communication, Zephyr said that alongside taking new instructions, it will be working through its pipeline with panel surveyors as quickly as possible and had contacted brokers with applications in progress.
It noted that strict protocols will be followed at all times during the property inspection process to protect the health and safety of the occupiers and the surveyor.
Zephyr added that if a valuer visits a property after a pre-valuation risk assessment has been carried out and the occupier does not comply with the agreed protocol, the valuation will be charged in full even if this could not be carried out.
The lender also noted that it was working to its usual service levels for all types of applications and conveyancing was continuing with solicitors working at home.
Three month offers
For cases in the pipeline prior to 31 March 2020, offers are valid for six months and Zephyr said it had an offer extension process in place.
However, for any new applications submitted from 31 March, the offer validity has been reduced to three months.
Zephyr Homeloans managing director Paul Fryers said: “It’s great news that physical valuations are possible again and that we can now support new customers and progress existing loan applications.
“Now that physical inspections are available, our primary concern is ensuring the safety and well-being of all parties – tenants, valuers, landlord and anyone else on site.
“As a specialist lender, we’re working hard to assess how the funding market reacts to the changes and challenges brought on by the pandemic and will keep our network, packager and broker partners up-to-date on any product changes we make to serve them and their customers better during this difficult period.”