West One cuts second charge rates for self-employed borrowers
Self-employed borrowers who are the main income earner will need evidence of minimum income of £40,000 through their latest SA302 and have been trading for a minimum of two years.
The lender has also added a product allowing parents to take out a second charge loan to use as a gifted deposit with a maximum loan to value (LTV) available of 75 per cent.
The second charge is placed on the supporting family member’s home, not the property being bought.
Rates on all ranges start at 3.99 per cent.
West One sales director Marie Grundy (pictured) said the family support product highlighted the flexibility of second charge mortgages and how they can work in tandem with the first charge market.
“This is particularly relevant at a time when there have been significant supply issues with higher LTV products in the mainstream market mainly affecting first-time buyers,” she said.
She added: “Our latest set of changes will be of significant benefit to self-employed borrowers whose needs are often more complex and best served by a more bespoke approach to underwriting.”
Bridging applications soar to record Q3 levels
Applications totalled £7.6bn in the third quarter, representing a 25.7 per cent rise on the same period in 2019 and an increase of 39.1 per cent over the previous quarter.
Completions in Q3 2020 were £680m, an increase of 44.8 per cent on Q2, although still down by 27.6 per cent on the same period last year – as the market bounced back from the impact of the first lockdown.
Loan books increased 0.6 per cent on the previous quarter and five per cent on the same period last year – remaining at around £4.5bn. Average loan to values (LTVs) rose slightly since Q2, but continue to remain sub-60 per cent.
The value of loans in default showed a small increase of 3.3 per cent over Q2 2020 but were 23.1 per cent higher than the same period last year, as borrowers continued to feel the financial impact of the pandemic.
The figures were compiled by auditors from data provided by members of the trade body.
Speaking to Mortgage Solutions, Vic Jannels, chief executive of the ASTL, said: “The increase in demand for bridging is down to the versatility and speed that short term finance can offer in an uncertain environment.
“We know that many term lenders are running at long delays currently and so, for people who want to move quickly – perhaps to beat the deadline for the stamp duty holiday – bridging can prove a very useful product. There has been huge demand for bridging in recent months, and we expect this to continue.
“As always, the value of advice is crucial and we anticipate that any short term lending will be recommended only where it is absolutely the right option for a customer.”
Vic Jannels, added: “This has been a hugely busy period for bridging lending.
“If the recent positive news about vaccines comes to fruition and lenders continue to underwrite loans sensibly, while taking a proactive and collaborative approach to customers in default, then there is no reason why this quarter’s figures should not prove a strong foundation for a robust and sustainable recovery.”
The BridgeCrowd secures £300m investment and rebrands to SoMo
The firm originally formed as a peer-to-peer (P2P) lender but has since started taking on institutional funding as well.
It has completed more than £132m in lending during its eight years and has now secured £300m in backing from Deutsche Bank.
The lender said this would allow it to “continue its sustainable growth trajectory, and increase its customer and borrower base in the UK”.
It added the name SoMo was chosen as it stands for Social Money Limited.
It launched in 2012 and completes bridging lending to cover residential or commercial property purchases, property refurbishment, and auction finance along with other needs.
The P2P lending sector has seen significant upheaval over the last 18 months including high profile failures such as that of Lendy.
Speaking last month, Lendy administrator Damian Webb said he expected the vast majority of the P2P space would turn to institutional funding following regulatory changes.
Commenting on the rebrand Louis Alexander, CEO of SoMo, said: “We have seen significant and steady growth under the BridgeCrowd name, not rushing to increase the loan book at the expense of the quality of our loans.
“This has served us well in the face of a difficult year, allowing us to deliver for borrowers, brokers and investors.
“Now we are preparing for our busiest 12 months to date as we predict more brokers and lenders will need to explore specialist loan options to aid their resilience and recovery in light of Covid-19.”
Aldermore and Allica Bank bolster teams with new hires
Aldermore bank has appointed Joanna Winterton to the role of head of commercial mortgages south and Graham Ritchie to the role of head of commercial mortgages north.
The two new positions have been created to replace the head of commercial mortgages role and reinforce regional support for origination teams serving brokers.
Winterton has more than 25 years of property lending experience and has been internally promoted from her role as a relationship manager within Aldermore’s commercial mortgages in-life team.
Prior to joining Aldermore, she was a business consultant and at Barclays and Nationwide in various property lending roles.
Ritchie has almost 20 years of commercial property experience and was also promoted internally. He was previously Aldermore’s interim head of commercial mortgages, and prior to that, interim head of property development.
Before joining Aldermore, Graham worked at Nationwide, Yorkshire Bank and Bank of Scotland, in commercial real estate, corporate and private banking roles.
John Carter, commercial director for commercial real estate at Aldermore, said: “It’s fantastic to have such an outstanding pool of talent in our team and I’m thrilled that we’ve promoted colleagues from within. Both Graham and Joanna have a tremendous amount of experience and will add greatly to the compelling service we continue to provide our customers.”
Allica hires mortgage operations manager
Small and medium business bank Allica has hired Carly Nutkins as mortgage operations manager.
She joins from Redwood Bank, bringing over 12 years of banking experience and operational know-how to ensure effective processing of commercial mortgage applications submitted to Allica.
The bank has also announced that it will be growing its business relationship management team by more than half to help service the surge in demand from SMEs.
Allica Bank said it has grown its lending capacity to now average over £30 million per month in committed loan offers to established SMEs.
Nick Baker, head of intermediaries, Allica Bank, said: “We’re delighted to welcome Carly to the team, she will drive the ‘engine room’ of commercial mortgage processing – ensuring a smooth, hassle-free application process. We’re also excited to be expanding the team further and are on the hunt for more talent to join our award-winning broker team.”
Recognise begins bridging and commercial lending in accelerated launch
It expects to launch loans for professional landlords and asset finance offerings next year.
The lender, which is part of City of London Group (COLG), started offering four lending products last month – bridging and working capital loans, loans to the professional practice community and commercial property loans.
In its half year results COLG revealed it expects Recognise to bring its full lending capability on stream in April 2021 but had accelerated its move into these four areas.
COLG, which also owns lenders Property & Funding Solutions and Milton Homes, is also applying to change the Recognise name to Recognise Bank to accompany the licence award.
The Property & Funding Solutions book, which had seen new deals put on hold since March, has been used as a seed for the Recognise business.
COLG also revealed a successful £27m cash raise was completed in October which has been invested in the development of Recognise.
“Recognise is now working to complete the development and testing work necessary to position it to receive a full banking licence, with a target to achieve this in the first half of 2021,” the lender said.
“The full banking licence will also be dependent on a further capital raise.”
It added: “As Recognise has now begun lending activities, Property & Funding Solutions will wind down its loan portfolio and Recognise will redeploy the funds as loans are repaid.”
Landlord loans to follow
Discussing its bridging market entry, chief executive officer Michael Goldstein said: “There is already deep experience within the business development and credit control teams to support this market engagement and Recognise is well positioned given that it has no legacy exposure or hangover from Covid-19.
“The senior management team carries the experience of previous crises and is looking forward to helping drive the growth of viable and ambitious SMEs as the UK economy begins to recover.
“Looking forward, 2021 will see loans for professional landlords and the development of an important asset finance capability.”
The firm delivered a £348,000 loss in the first six months of its financial year from April to September, however this included the £2.77m cost of its banking licence application.
The bridging operation secured a £200,000 operational profit while Milton Homes produced a £3.4m profit, although the broking arm Acorn to Oaks recorded a £16,000 loss as business was hit by Covid-19.
Recognise re-deploying funds
Goldstein continued: “We are delighted that our Recognise subsidiary achieved a major milestone when it received authorisation with restriction from the Prudential Regulation Authority (PRA) with effect from 10 November.
“As Recognise has now begun lending activities, Property & Funding Solutions will wind down its loan portfolio and Recognise will redeploy the funds as loans are repaid.
“The results of Milton Homes for the period were pleasing, reflecting both an increase in the number of reversions and the removal of the uncertainties on the future strength of the UK housing market that depressed the March valuation.
“Covid-19 adversely affected the commercial finance broking division of Acorn to Oaks as there was little activity in that market in the first half of the year although there are now signs of improvement which should benefit the second half.
“Overall, looking forward, we are well placed to implement our core strategy of developing a business focusing on the SME market that will deliver value to our shareholders,” he added.
First for Bridging appoints Pearce head of intermediary relations
Pearce, who joins from Together, will oversee F4B’s intermediary support centre in Manchester, which opened in October, and the sales team in the head office in Surrey.
Her main role will be building and maintaining relationships with intermediaries.
Pearce said: “F4B has already shown great foresight and ambition in setting up an office and building a support team who are making a real difference to our northern advisers, especially in such a challenging and complex marketplace.
“I hope my experience can help establish even stronger connections and generate more opportunities for those brokers with clients who can benefit from a wider range of alternative lending solutions.”
F4B director Donna Wells said: “Erica will play an integral role in a concerted and coordinated effort to promote our presence and encourage more introducers to approach us with transactions which require an additional layer of specialist support.”
First 4 Bridging added Hope Capital to its lender panel in July.
InterBay relaunches commercial mortgage offering
Earlier this month the lender also reintroduced its semi-commercial product range after it withdrew from both markets earlier this year as the pandemic hit.
The new commercial product range has rates starting from 5.74 per cent with two, three or five-year fixed terms and goes up to a maximum 65 per cent loan to value (LTV).
Loans are available between £150,000 and £1.4m for properties up to £2m in value, however the lender noted that it will consider larger loans or property values if requested.
It added that brokers with a proposal are encouraged to speak to their local business development manager for guidance and to help tailor their application.
OneSavings Bank group sales director Adrian Moloney said: “InterBay Commercial are back to doing what they do best, offering their intermediary partners a range of commercial, semi-commercial and buy-to-let propositions, fully supported by an award winning business development team.”
Precise reintroduces refurbishment mortgages
The product involves bridging loan before exiting on to a buy-to-let mortgage, which does not need to be repaid while the refurbishment works are being completed.
Precise said it is designed to help landlords maximise rental yields by refurbishing a property before renting it out, as well as allowing them to take value from the property to reinvest elsewhere.
Landlords can borrow up to 65 per cent LTV on the bridge and 75 per cent of the post-works valuation on the exit buy-to-let mortgage.
The lender added that one application form will produce two offers, one for the bridge and one for the buy to let, as well as two procuration fees.
OneSavings Bank group sales director Adrian Moloney said the relaunch demonstrated its commitment to supporting the market.
“Landlords have traditionally faced difficulty in securing finance to refurbish a property before letting it out,” he said.
“Refurbishment Buy to Let enables them to do so by bringing together the flexibility of bridging finance together with the surety of an exit onto a long-term buy to let once the improvement work has been completed, provided the property meets the expected valuation following refurbishment.”
Home ownership desire falls with age as ability to raise deposit dwindles – Paragon
The study of 2,000 tenants found that overall, 72 per cent of tenants wanted to own a property one day. Those aged 25-34 had the greatest desire for home ownership, with 88 per cent saying this was a goal of theirs.
In contrast, 70 per cent of tenants aged 45-54 want to own their own homes, while just half of tenants between the ages of 55-64 have the same aspiration. This drops to a third for tenants aged 65 and over.
The ability to put money towards a deposit likely affects the desires of older tenants, as Paragon’s survey found three quarters of those aged 18-24 put money away monthly.
For those aged 25-34, 71 per cent saved towards a deposit regularly while just 58 per cent of 35-44 year olds did the same.
Additionally, 45 per cent of tenants aged 45-54 said they put money away for a home compared to 41 per cent of those aged 55-64.
However, for those who were slightly older at over the age of 65, the capacity to put money away on a monthly basis for a deposit rose to 43 per cent.
The findings indicate that despite 49 per cent of private tenants being aged between 29 and 44, such tenants are more likely to move on as two thirds of those aged 18-24 expect to purchase their own homes in the next five years along with 42 per cent of 25-34-year olds.
Suiting a lifestyle
Older tenants tend to be happier with their rented properties, as the survey found this was the case for 68 per cent of over 55s who said they enjoyed renting or it suited their needs. The satisfaction with renting dropped to 49 per cent for those under the age of 55.
Across all age groups, 54 per cent of respondents said renting suited their needs or they enjoyed it.
As for the reasons people prefer to rent, 48 per cent said it meant they did not have to worry about repairs, while 35 per cent liked the ability to move when they wanted.
A third were happy with the location of their rented homes while 31 per cent said it gave them the option to live in an area they would otherwise not be able to afford. For a fifth of respondents, the property was said to be “perfect” for their needs.
Overall, two thirds of tenants were happy with their accommodation despite four in 10 believing some improvements could be made.
The satisfaction with accommodation was even greater for the 62 per cent of respondents who said despite not owning it, their properties felt like home.
Security and contentment in the private rental sector was not common for all respondents however, as 12 per cent said they did not like renting and 38 per cent said it was too expensive.
Furthermore, 36 per cent had worries they would be asked to move out while a third said they did not like the fact they could not decorate properties to their liking.
The majority of private tenants have a good relationship with their landlords, as 68 per cent of respondents said the interaction was positive.
Some 80 per cent said contacting their landlord was easy while 65 per cent said repairs were dealt with quickly and a further 58 per cent said repairs were done to a good standard.
Richard Rowntree, Paragon Bank managing director of mortgages, said: “Our research shows a strong desire to buy amongst younger tenants who will typically use rented property as a starter home before stepping on the property ladder. This cohort also is more able to save for a deposit, making their aim of buying a home more attainable.
“As tenants reach their middle-aged years, the desire to own a home becomes less pronounced, but so does the ability to save for a property. These tenants will typically stay in the private rented sector for a longer period, maybe for the rest of their lives.”
He added: “Of course, the UK is a nation of homeowners and many tenants naturally aspire to own their own property, particularly those in the younger age brackets, but people are generally happy in their rented home, recognise that it suits their needs and, on the whole, enjoy a good relationship with their landlord.”
West One launches limited edition BTL deals and Zephyr ends Libor use
The lender is adding two five-year fixed rates, one at 65 per cent loan to value (LTV) and the other at 70 per cent LTV, with rates of 3.39 per cent and 3.44 per cent respectively.
Both deals come with a two per cent fee.
Maximum loan size is £500,000, while maximum property value is £800,000.
Andrew Ferguson, managing director for buy to let at the lender (pictured), said: “Demand from landlords remains strong at the moment as they seek to maximise the window of opportunity created by the preferential stamp duty position.
“These products are competitive and combined with our specialist expertise and strong service proposition, should prove attractive for brokers concerned about meeting deadlines.”
Zephyr ends Libor use
Meanwhile, Zephyr has ended its use of the London Interbank Offered Rate (Libor).
The buy-to-let lender has removed all Libor-linked reversion rates on products and replaced them with reversion rates linked to the Bank of England Base Rate.
The new products feature the same initial fixed rates as the previous range and there are no changes to core criteria.