Kensington Mortgages upsizes green securitisation Finsbury Square to £750m
The deal saw strong demand from global investors, attracting 23 backers and being oversubscribed across all three tranches, Kensington said.
The senior notes were deemed as green because they aligned with the ICMA Green Bond Principles and were formally accredited by governance provider ISS ESG. This was the first transition from a lender in the UK asset-backed securities market to be labelled a green bond, and the third such in Europe.
The senior notes were priced at 65 basis points over SONIA, “reflecting strong investor demand for our residential mortgage-backed securities (RMBS) program,” the lender said.
The all-in pricing achieved a total cost of 70 bps for a funding duration of 4.6 years.
The lender’s Green Bond Framework provides for the issuer, Finsbury Square SPV, to finance purchase of a pool of loans by way of a term non-recourse securitisation of the underlying portfolio, which involves issuing securitised green bonds to investors.
Kensington said its target was to allocate £800 million of proceeds from the senior notes to develop its green lending products by 2026, as part of its commitment to sustainable lending.
The green range of products will aim to incentivise borrowers to buy energy-efficient properties or renovate existing buildings to improve environmental performance.
The lender’s Green Bond Framework requires that for properties to be eligible, they must have a minimum EPC rating of B, which puts them in the top 15 per cent for performance on emissions for residential buildings in England and Wales.
Alex Maddox, capital markets and digital director, at Kensington Mortgages (pictured), said: “The majority of UK housing stock is energy inefficient and responsible for 21 per cent of all carbon emissions in the UK. Improving the efficiency of our existing housing stock is one of the best ways to help the UK transition to a low-carbon economy.”
“Our Green Bond Framework reflects our commitment to invest in environmentally sustainable projects, help borrowers to reduce their carbon footprint, and to increase the amount of capital allocated to sustainable uses in the financial sector,” Maddox added.
In February, Kensington completed its £472 million GMG 2021-1 transaction. This year it became one of the first specialist lenders to collect EPC data from applicants and to share the information, at loan level, with investors for all new RMBS origination deals.
Last year, the lender launched its eKo cashback mortgage which rewards borrowers for making energy-efficient improvements to their homes.
The latest deal brings Kensington’s total RMBS issuance to £13 billion, the largest of any specialist lender.
LendInvest adds law firm Juno to BTL legal panel
Juno joins four other firms on LendInvest’s legal panel and will advise on BTL legal matters.
The law firm specialises in property conveyancing and has a fully online process, with an online dashboard that provides updates on case progress to clients.
LendInvest can provide up to £3 million in finance for BTL, with two-year rates starting from 2.9 per cent and five-year rates starting from 3.29 per cent. It has a maximum loan to value of 80 per cent and offers terms from seven to 30 years.
It has been expanding its BTL offering, entering a £500 million funding partnership with JP Morgan in January to back its BTL product.
The lender launched two new 65 per cent and 70 per cent LTV BTL products earlier this month with rates starting from 3.34 per cent. It also repriced a selection of its two and five-year fixed 75 per cent LTV products.
LendInvest’s head of lending operations Lauren Eaton said: “We’re excited to be working with a team like Juno’s, particularly due to our shared ethos of a technology-enabled approach to lending. This new appointment comes at a time of high growth for our BTL business, and we’re delighted to be working with the team.”
Five opportunities in commercial mortgages for brokers to take advantage of in H2 – Simpson
For us, it was trying to build a new commercial mortgages business in the midst of a pandemic, and ensure we were making the right decisions for our customers and our brokers, as well as commercially.
This was especially difficult when investor confidence was severely impacted. Extraordinary steps were required, like mortgage payment holidays, which we introduced with just 48 hours’ notice.
However, despite all this, there was a need to recognise that a positive response was essential to create a strong platform to build success for the future.
It is hard to believe that in 2021 things look so different. Q1 was not only a record lending quarter for us, but we did as much business in this quarter alone as in the whole of 2020. This suggests a great outlook for the commercial market going forwards.
So, what about the second half of the year and into next? What opportunities are out there that you could make the most of? Here are my top five thoughts on this:
1. Staycations – the development of the holiday lets sector
This might feel obvious, but one of the consequences of the pandemic has been a huge increase in people holidaying in the UK out of pure necessity.
Investors recognising this are capitalising on this profitable market, leading to an increase in demand for specialist holiday let mortgage products and lenders are responding. So, if you haven’t already, this could be a very profitable market to explore.
2. Buy-to-let sector growth and change
Recent increases in demand for housing and the resulting higher house prices have caused a shift in the buy-to-let market, leading to sector growth.
This has seen experienced investors expanding their portfolios, and a trend towards professionalisation in the sector.
Lenders have responded to this and amended their product offerings to cater for them, with products such as specialist HMO mortgages becoming more popular. This could mean getting up to speed with these specialist products and branching out, if buy-to-let is a new market for you.
3. Expanding regional markets
The value of residential properties across the country has outpaced London in the past 12 months. This suggests that a sensible course of action would be to focus on regional lending, such as investment in the physical expansion of your business.
This could mean opening new regional offices so that you have a physical presence in other locations, expanding your capability to reach more borrowers who might need your help.
4. Making the most of your people
Relationships have been brought into sharp focus as the pandemic has changed the way we interact. In our sector, lenders and brokers have had to adapt their way of working to provide the best possible support for their clients in uncertain times.
Strong relationships drive positive outcomes and will continue to do so as we move into the future, therefore it is essential to nurture and support your people and give them what they need to provide your clients with exceptional service.
5. Embracing technology
Technology was also moved on by the pandemic as face-to-face interaction became impossible.
Whilst this was initially very difficult to come to terms with, there are advantages such as improved work-life balance and increased efficiencies as employees do not have to commute.
In the future this could mean companies embrace a more hybrid approach to work. But it also means a focus on new technologies, like Application Programming Interface (API) technology.
This can save you both time and money, allowing you to focus on other things, like customer service or relationship-building, to take your business forward.
Signature Property Finance and VAS Audit together reach £200m of audited valuations
The audit company was retained by Signature Property Finance to provide independent analysis of valuation reports to decrease lending risks prior to funding.
VAS Audit and Signature Property Finance have been partners since 2017, and in that time VAS Audit has undertaken 500 reviews of valuations, equivalent to 15 audits a month across 60 different surveyors with an average value of £400,000 per property.
Signature Property Finance’s chief executive officer Tony Gilbertson (pictured) said: “In a market where some lenders will throw out low rates and high loan to value, to attract borrowers who rarely get the promised deal, we have focused on ensuring certainty of funding for our clients.
He added: “If we agree a deal at the outset, we deliver on those terms; no nasty surprises or last-minute rate increases. This approach requires total confidence in accurate valuations of the properties we are dealing with, which is where VAS Audit steps in. They consistently deliver what we need, when we need it.
VAS Audit’s managing director Daniel Owen-Parr said: “Signature understands that while a standard valuation is a solid base on which to make a lending decision, an audited valuation which has gone through a second layer of independent verification helps to further reduce property-specific lending risks.”
Gatehouse Bank hires chief operating officer from Together Loans
Bailey (pictured) will report to chief executive officer Charles Haresnape and be based in the bank’s office in Wilmslow in Cheshire. In her role she will oversee operations in Wilmslow and Milton Keynes.
Bailey joins from Together Loans where she was director of lending and change. She spent over two decades with the Cheadle-based lender, initially joining as head of regulated underwriting and then taking on the role of operational transformation head.
Prior to Together she was head of secured lending at Advantage Mortgage Solutions, and before that worked at HFC Bank and Nationwide.
Haresnape said: “Tracey has considerable experience in key operational leadership roles where she has driven transformation and strategy, so she will be a great asset.
“We’ve been developing new ways to enhance our products and expand our offering, so it is an ideal time for her to join us, her experience will be invaluable as we look at additional ways to grow the business.”
Octane Capital hits £1bn lending milestone after four years
The lender has received 3,274 applications with a combined value of £2.4bn during that time, and issued agreements in principle worth £8.8bn.
The firm has completed 1,375 loans in total since launch.
Last week, it completed its largest and most complex loan to date, a £17.4m, five-year buy-to-let facility for a London-based landlord.
The facility refinanced 40 properties in London, comprising 160 units, at a rate of 4.99 per cent with one per cent interest deferred.
The broker was Liubov Vaskevych at Your Mortgage Advisor, whose role in the deal included securing reassurances to help overcome planning irregularities which existed on some of the properties.
Jonathan Samuels, chief executive at Octane Capital (pictured), said: “Completions of £1bn is a significant milestone and reflects the exceptional efforts of our team over the past four years. We’ve evolved into a hybrid platform since launching, offering product-less solutions and buy-to-let products.”
Mark Posniak, managing director at Octane Capital, added: “We’re only as good as the people we work with, and I’d like to thank all our broker, legal and surveying partners. We’re looking forward to hitting £2bn.”
Buckinghamshire Building Society launches 80 per cent LTV BTL deal
The minimum household income for the product is £35,000 and is available for limited companies and individuals.
The product has a limited tranche, with the lender setting a 31 August deadline for cases to be completed.
The offering is currently the market leading rate according to the lender’s product comparison report done in conjunction with Mortgage Brain.
The product will also use the lender’s online affordability assessment and calculator, as part of its streamlined buy-to-let application process, which will give brokers an instant decision in principle on applications.
Buckinghamshire Building Society’s head of lending Tim Vigeon (pictured) said he expected the product to sell quickly due to the limited tranche, and the affordability calculator and streamlined application process would enable a quick turnaround for brokers with remortgage cases.
Vigeon said: “We anticipate that brokers will welcome this very attractive new product in the crowded BTL market and will seek to take advantage of the short window of opportunity for their clients.”
Landbay cuts rates by up to 0.19 per cent and launches two products
The rate changes apply to its two-year fix at 75 per cent loan to value (LTV), which has been cut by 0.19 per cent to 2.95 per cent.
Its five-year fixed at 75 per cent LTV has been reduced by 0.04 per cent to 3.35 per cent. Both products are subject to a 1.75 per cent fee and a free valuation.
The same rate changes have been made on its parallel two and five-year fixed products at 75 per cent LTV but are only subject to a 1.5 per cent fee.
All the above products are available for standard properties only and can be taken out by limited companies and individuals.
The recently launched products aimed at landlords with three properties or less include a two-year fixed rate at 2.85 per cent at up to 65 per cent LTV. The lender has also brought in a five-year fixed with a rate of 3.25 per cent up to 65 per cent LTV.
Both are available on loans of up to £1.5m.
Landbay’s managing director for intermediaries Paul Brett (pictured) said: “These rates continue to consolidate Landbay’s leading position as a specialist buy-to-let lender, and I am sure there are many brokers out there who will be taking a sigh of relief at being able to offer their clients larger loans that offer added flexibility.”
Tuscan Capital cuts short-term lending rates and launches two products
The lender has reduced starting interest rates on its short-term lending category from 0.75 per cent a month to 0.69 per cent for all loan types bar refurbishment and change of use product.
Rates for refurbishment stand at 0.79 per cent, whilst rates for change of use stand at 0.74 per cent.
The maximum loan amount has also gone up to £10m and its maximum loan term has been increased from 18 to 24 months.
The lender has introduced a developer exit bridge product, which offers funding up to 75 per cent loan to value (LTV) for projects that are close or have reached practical completion.
The other product is a change of use bridging product, which covers conversion of commercial property to residential use.
Funding is available up to 75 per cent of purchase price and 100 per cent of build costs.
Tuscan Capital’s chief executive Colin Sanders (pictured) said: “These enhanced terms and product refinements mean that Tuscan Capital can provide more options and flexibility so keeping us at our most competitive whilst remaining committed to offering an intermediary-friendly service.”
Koodoo and Fluent Mortgages partner to offer mortgage comparison service
The Koodoo platform will integrate Fluent’s contact management system and its MyFluent app with lending application portals to assist customers through the application process.
By using the mortgage comparison tool customers can get a better understanding of their eligibility and acceptance prospects, and choose to apply directly to the lender or via Fluent.
The partnership will also provide reporting and analytic capabilities to consumer sites which will allow them to measure performance and support customers over the course of their mortgage.
Koodoo chief executive and co-founder Seb McDermott said: “Together with Fluent Mortgages, we have developed a mortgage journey that is unique in the market in offering an outstanding digital user experience, expert support over the phone and a choice of applying via a broker or direct to lender.
“Our partnership means consumer sites can get to market quickly with a journey that provides outstanding mortgage support to their audiences and delivers commercially.”
Fluent Money Group’s commercial director Paul Ford said: “We have a shared focus on enhancing the customer experience in the mortgage market, something that is very much a combination of outstanding service and leading-edge technology.
“This partnership is further evidence of our ambition to disrupt the market and offer a next-generation experience to consumers on their mortgage journey.”