Engaging with regulators on possessions brought progress – Vic Jannels
The stimulus for this engagement was the enforcement moratorium, which we believe disproportionately and negatively impacted a large number of short-term lenders and customers, as it disregarded the unique characteristics of the short-term mortgage lending market, compared to the term market.
It’s fair to say that to date we have made greater progress in our dialogue with Treasury than with the FCA, but I am positive about the lines of communication that we have established with both.
Now that we have opened the door, I believe it is imperative we continue to maintain this dialogue and it is important that we do not do so in isolation.
At the ASTL Annual Conference, I spoke about the importance of liaison with our peer groups at FIBA, the NACFB and AMI.
I firmly believe that the closer we are, the better our ability to be recognised and engaged with by the Treasury and the FCA.
I can’t see any point in ploughing our own furrows independently of each other. We have nothing to fear from either the Treasury or the FCA while we are in concert together.
Continue to engage
The fear I have is that unless we are in regular and meaningful dialogue with the regulators and that we speak the same story, further far reaching decisions will be made by them and the potential issue of unintended consequences will remain real.
With the end of the enforcement moratorium and FCA guidance transitioning back towards working with customers on an individual basis, our initial purpose for engagement with the regulators is receding.
However, I am determined this will not mark the end of our dialogue, but rather just the end of a first chapter of a more meaningful, consistent and collaborative period of communication.
The moratorium may be abating, but its impact may be with us for some time yet. Even more important therefore that we co-operate and engage.
Fleet cuts rates and launches lifetime tracker range
Standard buy-to-let deals have been cut by five basis points with rates now starting at 3.19 per cent for two-year fixes up to 60 per cent loan to value (LTV).
At 70 per cent LTV rates now start at 3.29 per cent and at 75 per cent LTV rates start at 3.44 per cent.
Fleet is also offering five-year fixed-rate products with rental coverage calculations of both 125 per cent at 5.5 per cent and 125 per cent at pay rate.
Rates start at 3.54 per cent for five-year fixes at 60 per cent LTV, 3.59 per cent for 70 per cent LTV and 3.69 per cent for 75 per cent LTV.
Standard and limited company deals revert to the Bank of England Base Rate plus five per cent and deals for houses in multiple occupation (HMO) or multi-unit blocks (MUBs) revert to the base rate plus 5.25 per cent.
The specialist lender has also expanded its range of buy-to-let deals with the addition of lifetime tracker mortgages that have no early repayment charges.
Rates start at 3.3 per cent for standard and limited company mortgages and 3.46 per cent for HMOs and MUBs.
All tracker deals come with a rental calculation of 125 per cent at 5.5 per cent and a two per cent fee.
Steve Cox (pictured), distribution director of Fleet Mortgages, said: “Cutting the prices of all our standard and limited company products makes them even more attractive and we’ve been able to do this because of the strength of our relationships with our funders, and their appetite to be active in the UK buy-to-let space.
“We are also changing all our revert rates to track the Bank of England Base Rate which will be easier for customers to understand and provide extra clarity for advisers when explaining our product options.
“In doing this, it has opened up our ability to launch a brand new range of lifetime trackers across our three core product ranges, which, given they come with no early repayment charges at all, will I’m sure be of interest to many landlord borrowers.”
Together and Crystal complete 48-hour bridge to save deal
The £65,000 bridge went from application received to completion in two days.
Crystal was approached by a broker who needed a short-term loan for a borrower in Scotland whose property move was in jeopardy due to unexpected delays in the mortgage process of their buyer.
The case was uploaded onto Together’s system on Thursday afternoon and a desktop valuation was carried out. By Friday lunchtime all underwriting requirements had been satisfied and the offer was issued.
The client completed the offer requirements on the same day and returned the information by recorded delivery, arriving at Together’s office on Monday morning allowing the funds to be released.
The bridging exit was confirmed as the sale of the existing property.
Dan Morris, key account director at CSF, said “A two day completion for bridging finance is rare within our marketplace. To achieve this excellent customer outcome for the client was particularly satisfying as the case was regulated and the security located up in Scotland.
Sundeep Patel, head of intermediary sales at Together, said: “We are delighted with the result of this particular deal. The business is committed to delivering excellent levels of service to all our partners and we will always try to act with speed and remove unwanted barriers to the mortgage process.”
Pepper Money completes £629m securitisations
The first transaction was a £352m securitisation of specialist first charge residential and buy-to-let mortgages originated by Pepper Money.
This was followed by a £277m securitisation of second charge mortgages originated by Optimum Credit.
Both transactions attracted strong investor demand and were oversubscribed in a competitive market and uncertain economic environment, the lender said.
Pepper Money and Optimum Credit recently signalled increased lending appetites with the launch of enhanced products and criteria.
Laurence Morey, chief executive of Pepper Money (pictured), said: “The success of these securitisations is particularly pleasing given the completely unprecedented environment we have lived through in the last six months and the challenges faced by non-bank lenders.
“It is reassuring that there continues to be such strong investor demand for high-quality assets and this provides us with a solid foundation on which we can confidently continue to grow our first and second charge lending volumes.
“We will, of course, remain cognisant of the changing environment and maintain a robust and appropriate approach to underwriting, but we do so with an honest appetite to lend and a deep commitment to supporting our intermediary partners.
“I am confident that the challenges we have overcome will help us to establish a stronger sector that is better able to deliver the solutions that brokers need to meet the changing needs of a diverse group of borrowers.”
Funding 365 trims rate and removes exit fee on light development loans
The lender entered the development finance market early last month with a rate for its light product starting at 0.79 per cent per month, which has now been cut to 0.74 per cent per month with no exit fee.
The product is designed to enable property developers to carry out heavy refurbishments, extensions, building conversions and permitted development schemes, as well as finish and exit development projects.
Loans are available between £200,000 to £3m in size and for properties in England and Wales for up to 24 months.
The maximum loan to value (LTV) is 75 per cent on day one and clients can also borrow up to 100 per cent cost of works, up to a maximum loan to gross development value (LTGDV) of 70 per cent.
A two per cent arrangement fee applies plus legal and valuation or monitoring fees at market rate.
Funding 365 marketing director Laura Kendall (pictured) said: “We previously included an exit fee in our light development product as this is how the majority of development lenders price their loans.
“But as we’ve settled into the development market we’ve found that most of our brokers and borrowers appreciate their loans being priced in the same way that we price our bridging loans, with no exit fees.
“We also found that we were, in practice, writing some loans that were a little lower than our advertised interest rate, so we adjusted that too,” she added.
Registration to attend The British Specialist Lending Awards opens
The awards will take place online at 4pm on Wednesday 28 October to unveil those most deserving of recognition in the specialist lending industry this year.
More than 4,000 nominations were received for the awards and the full shortlists for the 21 categories can be seen one the Specialist Lending Solutions website.
With continued government and health authority advice to maintain social distancing means it is not possible to deliver the British Specialist Lending Awards in person in October.
The welfare and safety of all guests, sponsors, suppliers and colleagues is the top priority and AE3Media and the Specialist Lending Solutions team therefore feels a virtual event is the most appropriate course of action in the current climate.
The online event will continue to showcase the glamour, glitz and the glory of the British Specialist Lending Awards and everyone is invited to join in the celebrations, all from the comfort of your own home.
The event will be streamed live with entertainment from musical comedy duo Flo & Joan, interactivity through a social media wall & chat function and lots more.
For more information visit: https://www.mortgagesolutions.co.uk/events/british-specialist-lending-awards/?pfat=3cf6444efd8041e882f39f3e556806da
LendInvest ups max LTV and launches first-time landlord deals
The lender has also introduced products for first-time landlords and student let houses in multiple occupation (HMO) with up to six bedrooms.
Maximum loan sizes for standard properties have been increased to £1.5m with maximum loan size for multi-unit freehold block (MUFB) cases increasing to £3m with LTVs up to 75 per cent.
Buy-to-let borrowers will receive a £500 cashback contribution towards legal fees when they take out a five-year fixed mortgage for standard property types on products up to 75% LTV.
And there is also the option of £200 cashback on all applications where Open Banking is used.
LendInvest director for buy-to-let Andy Virgo said: “Landlords are looking to move fast, and stay flexible when considering new projects at this time – in order to do that, they need the right products available to them.
“With these new updates, I am confident we are not only able to deliver competitive funding options, but also the right team and expertise behind them to act as a vital partner for our customers as they seek to expand their portfolios.”
Hope Capital expands underwriting team
McGillicuddy (pictured) joined the lender as as an underwriter in 2018.
New underwriter Keiran Holmes will join the team after four years at Together, where he started out as an apprentice
McGillicuddy said: “It has been a very busy period for everyone at Hope Capital, so it is great to have my achievements recognised and rewarded.
“I’m excited to be part of a company that continues to grow and offer innovative new products to the bridging market and I am looking forward to playing my part in that.”
Holmes added: “Hope Capital has been experiencing a surge in enquiries and completions and, with plans for further growth, this is the perfect time to join the team.
“I am looking forward to working with the team to deliver more record numbers in the coming months.”
Optimum Credit eases credit criteria and reintroduces near-prime seconds
On affordability, the lender is now able to accept up to 50 per cent of variable income including bonus, overtime and commission.
It has lifted restrictions on previous defaults, county court judgements (CCJs) and payday loans – returning this criteria to its pre-Covid-19 approach.
The lender has increased its maximum loan size to £1m and reintroduced its Near Prime range for customers whose credit profile falls just outside of its prime rates.
And it has made interest rate reductions across its entire pricing model and re-introduced options for variable rate, discounted rate and interest-only products.
Optimum Credit commercial director Simon Mules (pictured) said: “The last six months have been challenging for everyone and I would like to thank all of our intermediaries for their continued support.
“We hope that this launch is the start of a new chapter – it is certainly a statement of our intent to grow our lending volumes and continue to take a leading role in the second charge mortgage market.”
Second charges shunned by three-quarters of brokers – Brightstar
The specialist distributor undertook a study of more than 1,000 intermediaries, including independent financial advisers, directly authorised brokers and appointed representatives.
Some 26 per cent of brokers said they brought up second charge mortgages to borrowers in discussions about their purchase or remortgage or during the term of their product, leaving 74 per cent of intermediaries who do not highlight the option of a second charge.
The most common reason for not talking about second charge mortgages was not having enough time or that they had forgotton to do so.
Michelle Westley (pictured), head of marketing at Brightstar Financial, said: “It’s now more than four years since second charge mortgage lending came under the same umbrella of regulation as the first charge market and brokers have been required to consider second charges alongside other options for capital raising.
“So it’s astounding that so many brokers are still not having conversations about second charge lending with their clients.”
Westley said it was “widely anticipated” that the purchase market will slow down in 2021 with the amendment of Help to Buy and the end of the stamp duty holiday.
She said the second charge mortgage market was set for growth as demand increases from homeowners who want to release capital from their properties.
New second charge mortgage volumes dropped by 64 per cent year-on-year in July with 966 new agreements arranged, figures from the Finance and Leasing Association (FLA) showed.
The value of new business in the month reached £40m, a decline of 65 per cent compared to last year.
Month-on-month, however, both the volume and value of new secured lending increased by 48 per cent and 46 per cent respectively.