On average, Together’s monthly gross lending reached £97.6m down 31 per cent from £140.7m in 2020.

The specialist lender’s loan book, which totalled £4bn down from £4.2bn the year before, is made up of residential first and second charge lending, buy-to-let, unregulated bridging, commercial and development loans. The largest portion of the book is made up of buy-to-let lending at 27 per cent followed by first and second charge lending which accounts for 26 per cent of the loan book.

In March at the start of the pandemic, the lender stopped all new lending and in June it cancelled all commercial and pre-offer residential pipeline cases, before laying off 180 staff in July. At the start of September, Together cautiously resumed lending.

Some 98 per cent of Together’s new lending was advanced at less than 80 per cent loan to value (LTV). The average LTV for the book was 52 per cent.

Profit before tax was up by 59 per cent from £94.6m to £150.3m which the company attributed to successful securitisations and new process and product improvements.

Together’s net interest margin was squeezed from 6.4 per cent to 6.1 per cent.

Chairman Mike McTighe (pictured) said: “Our momentum has been increasing, and monthly lending in the final month of the [financial] year returned to pre-pandemic levels.”

He added: “This increase in lending is supported by strong levels of liquidity and the group’s funding headroom has never been higher at £1.4bn. We have continued to raise new funds from the debt-capital markets across our financing structure.

“Later in the year we launched our first two commercial mortgage-backed securitisations and, shortly after the year end, a further private securitisation facility.

“Thanks to such measures, and a raft of process and product improvements the group’s profitability not only exceeded last year’s but reached its highest ever level.”

Research by second charge lender Evolution Money revealed the proportion of loans lent to prime borrowers rose from a share of 26 per cent in Q2 to 35 per cent in Q3. 

Over the same period, the value of second charge loans taken by prime borrowers dropped from 36 per cent to 32 per cent. 

Evolution Money’s figures showed that more prime borrowers were primarily using second charges to consolidate debt. Some 52 per cent took a second charge loan for this reason, up from 43 per cent during the previous quarter.  

Over Q3, home improvement with some debt consolidation accounted for 32 per cent of second charge loans taken by prime borrowers, while 12 per cent used the money solely for home improvements. 

On average, prime borrowers were consolidating five debts using a loan, the same as the previous quarter. Meanwhile, the average value of debt rose to £22,366 from £20,447.  

The average loan amount saw an uptick from £33,650 to £33,794, with the typical term rising from 157 months to 161. The typical loan to value (LTV) tier of a prime borrower using a second charge remained flat at 69 per cent. 

Debt consolidation borrowers 

For adverse borrowers needing to consolidate debt, the average loan amount stood at £21,151, down from £21,290. 

Over half used the money to pay back a loan provider, followed by paying a bank, repaying retail credit, and paying off car finance. 

Evolution Money analyses data from two different types of its second charge mortgage products, split between borrowers using the loans for debt consolidation purposes, and those with prime credit. 

Steve Brilus, CEO of Evolution Money, said: “The overwhelming reason for either prime, or any other, borrower to take out a second charge mortgage is still to pay back debt of some kind, however prime borrowers are increasingly likely to want to use some of the money to make improvements to their home. 

“Inevitably, there has been a focus on house price values over the last 12 months specifically, as many of the UK house price indices are showing close to double-digit growth. Homeowners want to be able to access some of the increased equity this has generated, and we have continued to see strong volumes of business for second-charge mortgages as a result.” 

Brilus said he anticipated the trend towards prime borrowers to rise as housing demand remained high and supply was low. 

“Many homeowners are looking at their options to achieve greater space in the current environment and deciding that the best way to do this is via extending their existing home, rather than moving and having to pay significantly more for properties and cover the fees that accompany any purchase,” he added. 

According to the latest figures from the Finance & Leasing Association (FLA), there were 2,433 new second-charge deals agreed in July, an increase of 149 per cent on July last year.

This continues a trend, as in the three months leading up to July there were 6,396 agreements, an increase of 198 per cent on the same period in 2020.

The value of the new second-charge loans agreed in July was up by 153 per cent on the previous year at £101m, though again the trend is more pronounced on a quarterly basis. The new business agreed in the three months to July totals £279m, a jump of 217 per cent on the same quarter last year.

Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA, noted that the market is seeing a “strong recovery” from the troubles of the pandemic, with the new business figure now at its highest level since February 2020.

She continued: “We expect to see further growth this year as the market returns to pre-pandemic levels of new business.” 

What locations and how many advisers and broker firms do you cover in your role? 

I cover Yorkshire and the M62 corridor – it’s a key area and plenty of advisers and brokerages based along it. The number I deal with is growing every week so it’s difficult to say.  

How have you changed the way you establish and maintain a good relationship with brokers in the pandemic?  

The pandemic has allowed me to save my travel time in the main. However, I am really glad that we are starting to see a relaxing of the rules and it is great to be out seeing people face to face again.  

What personal talent/skill is most valuable in doing your job?  

I have a passion for helping SMEs as I believe they are poorly serviced by the traditional funding banks. The most valuable skill I think, given the number of people we deal with and the number of cases, is to keep all those plates spinning and to make sure everyone gets the outcomes they want.  

What personal talent/skill would you most like to improve on? 

To probably stop saying yes and spreading myself too thinly. It’s a good skill to be able to learn how to say no. 

Where would you rather be stuck, in bumper-to-bumper traffic or back-to-back Zoom calls?  

In a strange way, probably neither – I think any good BDM would want to be communicating with advisers in the ways they want to be communicated with, so hopefully a mix of phone, email and face-to-face.  

Actually, sitting down with people has a lot going for it, and I think you can build really strong relationships by doing this, although I accept that’s been incredibly difficult over the last 18 months.   

What’s the best bit of career-related advice you’ve ever been given? 

“Slow down Jonny.” Sit up and smell the coffee, so to speak.  

What is the most quirky/unique property deal you’ve been involved in? 

There have been a few, for instance, I have lent to a couple of high-profile sports clubs in the past, which was, shall we say, very interesting.  

What has been your lockdown coping strategy? 

The simple ‘pleasures’ of cutting grass and walking the dog – essentially anything that gets me outside for some time.  

What was your motivation for choosing business development as a career?  

It’s great to help the SME market in Britain and knowing that you are really helping, shaping and changing people’s livelihoods.  

If you could do any other job in the property sector, what would it be and why?  

I think I’d like to be a valuer. I would love to be able to drive from site to site and take pictures for the day, although I appreciate there’s a lot more to the job than that.  

They are an essential part of our risk element, and their opinions are invaluable.  

What did you want to be growing up?  

A physiotherapist. 

What’s your favourite face mask design/pattern to wear? 

Paisley pattern – in pink. 

And finally, what’s the strangest question you’ve ever been asked? 

‘When you play water polo, how do the horses breathe under the water?’ If I had £1 for every time that was asked, I could open a bank. 

A rate cut of 20 basis points (bps) was applied to the lender’s two-year fixed first charge residential mortgage, giving a starting rate of 3.04 per cent.

The two-year fixed fee-free version was reduced also by 20 bps to start from 3.54 per cent. 

The five-year fixed equivalents were lowered by 25 bps, to go from 3.34 per cent, and for the fee-free 3.64 per cent.

The criteria relaxations saw additional earnings like bonus and overtime allowed in affordability calculations.

Changes for self-employed cases saw projections now considered, as well as not having to provide bank statements in all circumstances.

BTL cases also do not now require bank statements in all situations. 

Further, the lender extended its policy on automated valuations so that they are now possible for purchase and BTL cases, and up to £350,000 on first and second charge.

Rob Barnard, director of intermediaries at Masthaven (pictured), said that “a return to many of our pre-Covid underwriting approaches”, would let the lender “continue supporting borrowers, brokers and the wider market, even as some may begin seeing affordability issues owing to high prices, the end of stamp duty relief and the furlough scheme closing.”

The addition of Precise Mortgages will give network members access to residential, buy-to-let (BTL) and second charge loans, as well as access to its underwriting and credit risk management processes.

The network has set out to assemble a broad lending panel that covers mainstream, BTL, specialist and short-term finance, as well as protection and general insurance providers.

It also offers full complaints support and tech packaging containing features such as remote file checking, a CRM system, research tools and a general insurance package.

F4B Network’s commercial director Steve Swyny (pictured) said: “Precise Mortgages is a lender which is operating at the top of its game and combines an exciting proposition with a huge amount of experience and expertise across the specialist markets.

“It’s a lender which prides itself on strong service values and utilises the latest technology and scorecards to give decisions on a range of transactions within minutes. This approach aligns perfectly with our offering and will provide a great option for our advisers and their clients who continue to be underserved by the more traditional element of the lending community.”

Emily Machin, Precise Mortgages head of specialist finance and new build, added: “We’re delighted to join the F4B Network and bring our innovative offering to an even wider range of brokers.

“As one of the country’s leading specialist lenders, we’re excited to be partnering with a network which is dedicated to generating more opportunities for brokers to grow their businesses in the right way.”

Net interest margin hit 236 basis points (bps), a 19 bps improvement on H1 2020.

Underlying profit before tax rose 62 per cent to £252.8m, against H1 last year.

OSB Group operates across two segments, One Savings Bank, and Charter Court Financial Services (CCFS), which it bought in 2019.

One Savings Bank

At One Savings Bank, four sub-segments cover buy-to-let/SME, commercial, residential development and funding lines.

Organic originations at the BTL/SME sub-segment were £963.5m, up 12 per cent, and at tighter criteria than pre-Covid.

The average interest coverage for BTL originations was 197 per cent in H1.

At Kent Reliance, 73 per cent of applications came from limited company landlords. Five-year fixed rates represented 59 per cent of the lender’s completions in the first half. Its retention programme Choices saw 76 per cent of existing borrowers stay with the brand, within three months of their product end-date.

The sub-segment contributed £154.7m to group profit, up 39 per cent on H1 2020.

The residential sub-segment, which writes first charge, second charge and bridging loans, saw originations of £299.4m in H1.

The average LTV for new residential origination was 48 per cent in H1, owing to record levels of Shared Ownership business.

Contribution to profit was £44m, up 61 per cent compared to H1 2020.

Charter Court Financial Services 

The CCFS side of the group comprises BTL, residential, second charge and bridging.

This segment reported organic originations of £1,193.1m, up 11 per cent, in H1.

In the BTL sub-segment of CCFS, organic originations though Precise Mortgages grew 16 per cent to £805.5m.

Precise loans for houses in multiple occupation and multi-unit properties made up 24 per cent of completions. Limited company landlords comprised 72 per cent of completions.

On new lending, the average LTV was 74 per cent and interest coverage ratio 192 per cent.

CCFS’s BTL segment contribution to group profits was £73.7m.

In the residential sub-segment of CCFS, organic originations were £312.5m, up 32 per cent. 

This was driven by a spike in Help to Buy completions as borrowers were quick to finalise before new rules came in at end of March, as well as the stamp duty holiday. The trends led to purchases making up 89 per cent of completions.

For new lending, the average loan size was £134,000 and LTV 65 per cent.

The contribution to group profit was £39.5m, up 72 per cent, on an underlying basis.

At CCFS’s bridging sub-segment, originations were £67.7m, down 37.7 per cent. This was owing to controls put on volumes by limiting the number of products available, restricting criteria and increasing prices. 

The underlying contribution was £4.2m.

The second charge sub-segment of CCFS reported organic originations £4.4m, down 84.1 per cent. This reflected “significant lending policy restrictions”, as a result of the pandemic.

View forward

Looking ahead, OSB Group said it was confident to deliver full-year loan book growth of 10 per cent, based on current pipeline and application levels. 

Net interest margin was expected to be 270 basis points for the full-year, with underlying cost-to-income ratio “marginally higher” than in H1.

Andy Golding, group chief executive at OSB Group (pictured), said: “While we continue to control lending in our more cyclical businesses, demand remains strong in our buy-to-let and residential segments, where we have recently reintroduced pre-pandemic criteria due to the improving economic backdrop and outlook. The new products will help build our pipeline for completions in the first quarter of 2022.”

Controls review

OSB Group noted that it had commissioned an external review of processes and controls in H1, after discovering a potential fraud by a third party on a funding line it provided, secured against lease receivable and hard assets.

It said: “The review confirmed that it was an isolated incident and the majority of recommended enhancements to processes and controls have been implemented with the remainder to be made before the end of the year.” It would not add any more non-property funding lines in the future.

The product, which has a rate of 5.7 per cent and a maximum loan size of £1m, can act as a standard term loan or credit facility, where borrowers can draw and repay funds at any time for up to five years.

The monthly repayment amount is determined based on the outstanding amount, and permits borrowers to lower interest payable over the loan term.

It has no early repayment charges and no additional fees on further drawdowns. Third charges are also permitted with no rate-loading.

Selina Finance’s key account manager Stacey Woods said that the product was an “exciting addition” to its range and its creation was based on feedback from broker partners and client demand.

She added that there were more “positive enhancements” lined up for the rest of the year.

The lender will now issue loans up to 70 per cent LTV on semi-commercial bridging products and 65 per cent LTV on commercial loans.  

Second charge lending can now support purchases up to 65 per cent LTV of a property’s open market value. 

The lending limit for land with planning purchases has risen to 55 per cent LTV and development works plus fees will now be eligible for loans up to 60 per cent loan to gross development value (LTGDV). 

Steve Smith, national sales manager at Roma Finance, said: “These criteria enhancements have been made to support the increasing commercial opportunities available and also the growing development market. We are continuing to see significant growth across the board in all areas and believe these new enhancements will further stimulate this. 

“We are continuing to recruit across all business teams to ensure service levels are maintained with the goal of enhancing these too. We have some very exciting times ahead.”  

What locations and how many advisers and broker firms do you cover in your role?  

I cover a number of advisers and brokers, mainly in the North of England. 

How have you changed the way you establish and maintain a good relationship with brokers in the pandemic?  

Zoom has changed the dynamic but I would like to think the strong relationships I had before has helped in the Zoom era. Having said that, I am looking forward to getting back out there when it’s safe to do so for face-to-face meetings. 

What personal talent/skill is most valuable in doing your job?  

Communication is key regardless of the product or service being offered and to articulate that knowing people take on information differently. Trust is also so important with who you are dealing with and you earn that over time – however when you have that it is invaluable. 

What personal talent/skill would you most like to improve on?  

Everyone can improve on something, even their strong points, but I sometimes have too many plates spinning so I am improving on taking a step back and delegating some of that work.  

Where would you rather be stuck, in bumper-to-bumper traffic or back-to-back Zoom calls?  

I hate to say it – and it’s something I never thought I would – but it has to be traffic as it means we are back in the normal world. 

What’s the best bit of career-related advice you’ve ever been given?  

Be honest. If you’re not, then it will come back and bite you. 

What is the most quirky/unique property deal you’ve been involved in?  

You get a lot of curveballs and cases that sit outside of standard criteria and as we look at so many referrals that other lenders are not able to do, we get a fair number of cases that fit the bill.  

The most pleasing aspect is a lot of the time we are able to help when we are asked to, which is especially gratifying for us and the broker especially if they have introduced a case as a real long shot. 

What has been your lockdown coping strategy?  

I like to run and where I live, the countryside is not far away at all so I clocked a lot of miles over the lockdown. 

If you were head of the FCA for the day, what would you change about regulation in the mortgage industry?  

Evolution is really proud of how we ensure we are compliant in what we do, and I don’t see anything that I feel doesn’t make sense or that I would like to change. 

What was your motivation for choosing business development as a career?  

I liked the idea of working with so many different types of businesses and people, building relationships, helping on different cases, helping individuals and businesses hitting targets and the like.  

I’d seen BDMs visit the business when I was as an underwriter, and it always seemed like a role which I thought would be a good fit for me. 

If you could do any other job in the property sector, what would it be and why?  

Maybe a surveyor? Seeing other properties inside and out – I am nosey like that. 

What did you want to be growing up?  

Footballer. I am a big Manchester City fan and I did get to run on the pitch to a full house at Maine Road once – as a ball boy. 

What’s your favourite face mask design/pattern to wear?  

I have quite a few ‘buffs’* (see below) from running so I wear them as much as masks.   

And finally, what’s the strangest question you’ve ever been asked?  

In a job interview I was once asked, ‘If you could be a biscuit, what biscuit would it be?’ All my interview prep went out of the window when that came up. 

* (For the non-runners among us) A Buff is a seamless tubular garment made from a high-performance microfibre. A buff can be worn as a beanie; headband; neck gaiter; helmet liner; balaclava; sun, dust or wind screen; bandanna; scarf; pirate-style cap; hairband; wristband; or even a halter top.