Secure Trust Bank exits resi market with £54.6m loan book sale
The portfolio will be acquired for £54.6m by financing vehicle Jacqali Designated Activity Company.
The purchase price took account of the net book value of £77.7m as of 31 December 2020. The portfolio contributed £1.95m, including allocated costs, to profit before tax in 2020 on an unaudited basis.
The buyer was “a financing vehicle established by a global financial institution,” with the “purchaser’s obligation to pay backed by the institution,” STB’s statement said.
The sale was in line with a strategy to focus on specialist lending segments offering higher yields, and capital released will be invested into the business.
STB said in January 2019 that it would withdraw from residential lending, citing competition and pressure on the housing market, and stopped taking new mortgage applications a month later.
It has continued lending in the commercial, development and real estate finance spaces.
David McCreadie (pictured), chief executive at STB, said: “The disposal is in line with STB’s strategy of maximising value, simplifying the group and focusing on the areas of the business that have the strongest prospects for delivering sustainable and profitable medium to long-term growth.
“The proceeds will be used to strengthen STB’s capital position, provide additional financial flexibility to deliver its growth strategy, and ultimately enhance returns for shareholders.”
The sale is subject to agreement.
CHL Mortgages reduces rates; Precise Mortgages releases larger loan products and raises LTV
The five-year fixed option for individuals and limited companies will now begin at 3.10 per cent, down from 3.25 per cent.
Its two-year fixed deal for individuals and limited companies now stands at 3.15 per cent, a decrease from 3.30 per cent, and the five-year fixed rate with a one per cent arrangement fee has gone from 3.45 per cent to 3.30 per cent.
Its two-year fixed product for houses in multiple occupation (HMO) and multi-unit freehold block (MUFB) borrowing will start from 3.39 per cent, a reduction of 0.15 per cent.
The lender’s five-year fixed rate for HMO and MUFB at 75 per cent LTV has decreased from 3.64 per cent to 3.48 per cent.
Its five-year fix for HMO and MUFB borrowers at 75 per cent LTV with a one per cent arrangement fee is now priced at 3.68 per cent.
The lender has also reduced the arrangement fee for its five-year fix for individuals and limited companies at 65 per cent LTV to one per cent.
The interest coverage ratio will start at 125 per cent of the mortgage payment and is calculated at payrate for all five-year fixed purchase and remortgage products.
CHL Mortgages’ commercial director Ross Turrell (pictured) said: “We’ve seen positive movement in the markets with long-term swap rates improving and so have moved quickly to pass these savings onto landlords through our intermediary partners.
“The buy-to-let marketplace is hugely competitive and it’s important to outline our product and service values on an ongoing basis. Passing on these savings – alongside no loading on our valuation fees – demonstrates our commitment to promoting transparency throughout our proposition. Attributes we will continue to build on in H2 2021.”
Precise Mortgages brings in larger loan products and raises BTL limits
Precise Mortgages has reintroduced its maximum 80 per cent LTV limit to buy-to-let lending and brought out a pair of limited edition larger loan products.
The 80 per cent LTV limit applies to two and five-year fixed mortgages, with rates starting from 3.79 per cent, a two per cent product fee and a refund of valuation fee.
The lender has also brought out two limited edition five-year fixed products aimed at customers searching for larger loan sizes.
Rates start at 3.34 per cent and a product fee of £1,995 is applicable for loans between £200,000 and £500,000. The fee for loans between £500,000 and £1m stands at 0.5 per cent.
The BTL range also permits top slicing on personal ownership, limited company, portfolio and HMO applicants, which allows them to use surplus portfolio or disposable income as proof of resilience against financial stress.
Precise Mortgages also allows landlords up to 20 BTL mortgages with a combined value of £10m.
Precise Mortgages’ group sales director Adrian Moloney said: “As a leading specialist lender, we’re pleased to reintroduce up to 80 per cent buy-to-let LTV limits which are designed to offer increased product choice for landlords.
“We’re also pleased to be able to support the larger loan market by offering landlords a choice between a fixed fee product for loans up to £500,000, which may appeal to those with a limited company set-up, or a low percentage fee product for loans up to £1m.”
Foundation Home Loans and The Mortgage Works expand BTL offering
The products are limited edition and have no product fee, no application fee and come with one standard valuation.
The first product is available at 3.24 per cent with a maximum loan of £750,000 and is part of the lender’s core F1 range.
The second product has a rate of 3.44 per cent, and also has a maximum loan size of £750,000, and is aimed at landlords borrowing against standard houses of multiple occupancy (HMO) of up to six occupants.
They are both available for purchase and remortgage, while individuals and limited companies are eligible.
The rental cover requirement is at a notional rate of 5.5 per cent and is stress tested for 125 per cent for limited companies and basic rate taxpayers, and 145 per cent for all other borrowers.
Foundation Home Loans commercial director George Gee (pictured) said the products would give portfolio landlords more options, especially if they wanted a shorter fixed term or wanted to finance a specific property type.
He added: “Upfront costs can prove a real issue for some landlords who are looking to secure a competitive rate and can offer especially good value to those purchasing or remortgaging multiple properties.
“By introducing these no-fee products – which include one free standard valuation, no product fee and no application fee – we are aiming to deliver a product range which offers portfolio landlords access to greater flexibility.”
The Mortgage Works brings in limited company products and cuts rates
The Mortgage Works has brought in a two-year and five-year fixed rate limited company mortgages, with free legal incentives, to minimise upfront costs.
Both products have a rate of 3.39 per cent and are available up to 75 per cent LTV. They are both subject to a £1,995 fee.
The products come with free standard valuations and The Mortgage Works will appoint the conveyancer, cover the professional fee and standard disbursements.
The lender has also cut rates for five-year fixes with the limited company option up to 75 per cent LTV going from 3.59 to 3.09 per cent. It has a fee of £1,995 and free standard valuation.
Its BTL remortgage up to 65 per cent LTV has been cut by 0.3 per cent, with rates now starting from 1.59 per cent.
The rates for the lender’s BTL remortgage up to 75 per cent LTV have decreased by 0.4 per cent with rates starting from 1.79 per cent.
Both the remortgage products have a two per cent fee and free valuation and legals.
The Mortgage Works head, Daniel Clinton, said: “There are a number of costs to consider when investing in a BTL property, particularly for incorporated landlords where conveyancing fees can be higher.
“Our new purchase products with free standard legal and valuation fees aim to help minimise upfront costs.
BFS posts record month for lending in June
Lending in June was 51 per cent higher than for its previous best over 15 years of lending.
Lee Gilmore, head of business development at BFS (pictured), said: “We have far surpassed our goals and to do it during the pandemic is an amazing achievement.
“Three months in early 2020 were severely impacted by Covid, however, comparing H1 2021 to H1 2019 we still increased lending by 36 per cent.”
“We believe some of the increase has been through a shift in the way we structure deals, with more focus on the headline interest rates, which has undoubtedly attracted more customers,” he said.
“This performance gives us solid foundations on which to build further still,” Gilmore added.
BTL lenders most flexible in market, brokers say
The Mortgage Lender Benchmark by Smart Money People consisted of 597 brokers reporting on 44 lenders across banks, building societies, specialist lenders and lifetime providers.
It found complex buy-to-let lenders were rated 96 per cent for their flexibility.
Mainstream buy-to-let lenders followed, with a score of 87 per cent for their tolerance with mortgage applications.
Lenders across all categories were scored 79 per cent for their flexibility.
Brokers rated the underwriting from complex buy-to-let lenders higher than mainstream, with a score of 50 per cent compared to 32 per cent. The overall average across all lenders was 51 per cent.
However, complex lenders did not do too well when it came to how quickly mortgage applications were processed, likely due to the more intensive underwriting.
This was evident in how brokers rated complex buy-to-let lenders for speed, which was given a score of 29 per cent compared to the 55 per cent rating for mainstream buy-to-let lenders.
Again, potentially due to the nature of these cases brokers said they felt mainstream leaders were easier to place applications with. Mainstream buy-to-let lenders were rated 80 per cent for their ease, while complex lenders were scored 67 per cent.
Jacqueline Dewey, CEO of Smart Money People, said: “It’s clear that brokers realise and appreciate the complex nature of non-mainstream buy-to-let cases and how lenders approach them, especially when it comes to how flexible a lender is willing to be for these cases.
“However a rating of 29 per cent for speed compared to the overall lender average of 58 per cent shows that complex buy-to-let lenders still have room for improvement in their backend processes.”
Brokers expect bridging to be a lead growth segment in H2 – Shawbrook
The lender’s study of 187 brokers showed 26 per cent expected bridging to grow in H2, while 24 per cent said the same for semi-commercial lending and 23 per cent for buy-to-let.
Attitudes towards the market have shifted since the end of 2020. Some 74 per cent of commercial brokers in June said they felt confident about the prospects for growth for the rest of the year, up from 60 per cent in December.
Additionally, 71 per cent of brokers operating in the buy-to-let, bridging and commercial sectors predicted landlords would increase the number of properties in their portfolio in H2.
Investors’ buying patterns appeared to be shifting. Some 44 per cent of respondents said they noticed a change in the types of properties being purchased, with 42 per cent saying this was down to expected yields.
Brokers reported healthy business in general, with 67 per cent saying they had seen a rise in volumes since the start of the year.
Half of respondents had seen growth of 20 per cent or more in business levels.
Gavin Seaholme, head of sales at Shawbrook Bank, said: “In what could have been a really difficult period, a sense of urgency from buyers and sellers has instead created increased activity and higher values.
“Those in a position to diversify or expand their portfolios are not shying away from current opportunities.”
He added: “Bridging has evolved significantly in recent years and is now viewed as an effective financial solution for the longer term. It allows investors to access capital at a much faster rate than through more traditional finance options.
“The popularity of the product, and opportunity for growth, show no signs of slowing. For brokers, it’s important they make clients aware of all possible finance options,” Seaholme said.
Octane Capital tops £100m of lending in a quarter for first time
Octane received 325 applications and completed 166 loans in the three months.
The performance included a 15 per cent rise in the number of foreign nationals among its customers, the steepest quarterly rise yet.
Mark Posniak, managing director at Octane Capital, (pictured) said: “Activity levels have been off the scale. The stamp duty holiday was a driver. And we are seeing high demand from foreign nationals, mostly from outside the EU, who increasingly see UK property as a safe haven.”
The proportion of foreign national borrowers buying properties outside London was 36 per cent in the six months to end of June, up from eight per cent in the lender’s launch year in 2017.
The Mortgage Lender launches holiday and short-term lets product
The five-year fixed product has a rate of 4.16 per cent and the two-year fixed has a rate of 3.67 per cent. Both are available at 75 per cent loan to value (LTV).
The products are open to individual landlords and limited companies with a minimum of one buy-to-let (BTL) property in their current portfolio for 12 months. It is eligible for purchase and remortgage and has a maximum loan value of £1m.
There are no minimum income restrictions, with the lender explaining that lending is based on a “sustainable” assured shorthold tenancy figure. Affordability is available from 125 per cent of payrate for a five-year fixed rate.
The Mortgage Lender sales and product director, Steve Griffiths, (pictured) said: “The holiday and short-term rental market in the UK has been particularly buoyant for a number of years, but especially so since the pandemic cancelled a lot of people’s plans for holidays abroad.
“For established landlords and investors this segment of the market provides an attractive route to diversifying their property portfolios.”
Holiday lets have grown in popularity over the past year as tax benefits, UK holidays and lockdown savings have persuaded would-be investors into the sector and growth is set to continue.
Catalyst Property Finance hires sixth relationship manager from Paragon’s Iceberg
Griffiths will take on the role of client relationship manager and oversee origination of loans, structuring, pricing lending terms and building customer relationships.
He was most recently an account manager at Iceberg, a division of Paragon Bank that provides commercial funding and asset finance to the SME market.
Prior to that he worked at Savills as an agent network manager for nearly six years and before that worked at Health-on-Line in life insurance sales for just under five years.
Catalyst Property Finance’s new business head, James Farge, said: “The recruitment of Lee into the new business team at Catalyst was an easy decision to make. He had previously worked with Sam and Josh, who have established themselves as top performers at Catalyst, and Lee came highly recommended by them both.
“I am looking forward to working closely with Lee as he further enhances our ability to originate quality business, in what is, a very competitive market.”
The lender’s intermediary relationship managers include Josh Hawker, Stuart Heavens, Oliver Jenkins and Andy Keeher.
Investors to get 10 per cent of proceeds from Lendy-backed Gloucestershire project
In an update to investors last week, receivers RSM Restructuring Advisory said that lenders’ contractual entitlement was estimated to be around £104,720. It noted these were interim distributions and there could be further disbursements in the future.
It said that the firm had been trying to the sell the properties since 2016 but that the sales process had been “challenging” as Lendy insisted on securing an unachievable price.
Following its appointment in 2016, the receiver secured a range of offers in excess of £3m, however, these were rejected by Lendy who said that they would only accept offers in accept of £4m.
RSM Restructuring Advisory said that it was not able to secure offers at this level and the level of interest for the assets dwindled between 2017 and 2019.
As the properties would be held for a period of time the receivers asked for more funds to maintain and secure the site, which was declined by Lendy and led to a deterioration of the plot.
The receivers also explained there were problems relating to litigation from crowdfunders who had advanced funds to the borrower, title issues, multiple security and insurance issues as well as securing vacant possession from the original borrowers.
They noted that the underlying conveyancing was “time consuming” due to the delayed completion timetable.
The update continued that total third party costs were estimated to be £672,421, which include £223,611 to insurer JLT Specialty, £156,000 in legal fees to Shoosmiths and £49,199 to RSM itself.
Lendy, founded by Liam Brooke (pictured), went into administration in May 2019 due to concerns around levels of arrears and defaults.
In a progress report in June this year RSM Restructuring Advisory said that there were 16 live development finance loans with a value of £83.1m and 31 live property bridging loans with an outstanding value of £34.6m.
Around 11 of the development finance loans and 28 of the bridges are in insolvency proceedings.
It added that joint administrators had realised £13.3m in gross realisations over the past six months across 12 loans in its loan book.