Vida Homeloans: Why we have eyes on the seconds market

Vida Homeloans has set out to do what many other lenders aren’t: arrange finance for people with impaired credit records or jobs not deemed mainstream creditworthy, such as freelancers or the self-employed.

The firm began trialling its first residential and buy-to-let products with three mortgage packagers – 3mc, the Buy to Let Club and RHL – on 5 October.

Despite having its plate full, the lender already has second charges on its radar, said sales and marketing director Guy Batchelor. Perhaps a clue that the launch may not be too far off is already visible on its website, which features a tab titled ‘second charge’ alongside the two other products just launched.

“If you look on our website,” Batchelor said, “you will see our director of sales, Simon Burnell, comes from the market. We are seriously looking at launching into the market, it’s the next thing on our agenda.”

He explained Vida wanted to ensure it had a broad product range and besides, seconds offered a good opportunity as the firm is already a specialist business.

But recent regulatory changes also played a part, he said. The second and first charge market were brought under one regulatory umbrella earlier this year when the regulator’s Mortgage Credit Directive (MCD) took effect.

This means seconds now have to be discussed at every refinancing interview. “It’s more at the forefront of a lot of intermediaries’ minds now,” Batchelor said.

And that is a good thing, he said. “[Seconds] are a good alternative for consumers in certain circumstances.”

For instance, he said, consumers who have a good interest rate on their first charge may want to stick with their current lender. Those on fixed rate products with early redemption charges who want to access money from their property but not pay the charges could also benefit, he said.

Batchelor did not want to disclose the exact launch date of its second charge products, but said it will be sooner rather than later and will likely be in the form of a select trial period, same as the firm’s residential and buy-to-let products.