Brightstar Group launches fifth summer work placement programme
The company will onboard a wide range of young people, ranging from year 11 GCSE students to undergraduates, and aims to inspire young people to take up a career in financial services.
This is the fifth year of the programme, and its biggest intake thus far, during which time the company has created strong links with local schools and partners, and with one school that hosts a BTEC business course.
The business course allows Brightstar to offer motivational talks, taster days, mock interview days as well as office experience to study entrepreneurialism, graphic design, and social media and IT.
Brightstar’s group director of people development Clare Jupp (pictured) said: “We are keen to welcome people from groups of all protected characteristics and this programme certainly helps us attract those who are starting out in their careers.
“This programme meshes perfectly with our culture of ‘growing our own’ and our ‘greenhouse effect’ which we are immensely proud of.”
She continued that the firm had had great success in training and nurturing young people, pointing to group chief operating officer, William Lloyd Hayward, who started out as its first administrator.
Jupp said that there are other team members who had trained to become mortgage advisors and brokers, team leaders and sales captains, or taken on other finance and PA roles.
She added that it currently has four members of the team who completed a work experience placement, adding that it was an “effective recruitment tool” for the specialist lender.
“It is fantastic to see other organisations in the mortgage industry also engaging in these kind of activities and I would personally commend this to other businesses,” Jupp noted.
Brokers are offering bridging finance despite lack of sector knowledge – Brightstar
The survey of more than 500 brokers showed that only 27 per cent of advisers claim to have ‘excellent’ knowledge of bridging, while 40 per cent think they have ‘good’ knowledge; 23 per cent, say their knowledge is ‘average’ and 10 per cent admit their knowledge is ‘poor’.
Not enough referrals
The lenders also found that 85 per cent of brokers tend to recommend bridging to clients who were purchasing a property at auction.
Three quarters said they would recommend it for a property chain break, and 73 per cent said they would suggest it for a property conversion. Just over half, 54 per cent, see bridging as a short-term cash flow solution for their clients.
However, only 45 per cent of respondents currently refer a client to a specialist distributor when their bridging needs fall outside of their remit, with the other 55 per cent saying they didn’t.
Michelle Westley (pictured), head of marketing at Brightstar Financial, said: “It’s great that so many brokers are offering bridging. But we really recommend that brokers who do want to offer bridging to their clients, partner with a specialist that is fully immersed in the market.”
‘Dangerous’ lack of knowledge
Westley said she felt it was “dangerous” that so many brokers offer bridging finance without being sufficiently confident in their knowledge, or aren’t utilising their specialist partnerships properly to protect their clients.
She added: “This is clearly bad for customers, bad for the reputation of the sector and, ultimately, bad for those brokers.”
Aisling Birch, partner marketing manager at West One, said the research has shone an interesting light on how brokers are engaging with bridging.
She added: “Brokers should make the most of the resources available to them to stay on top of the key considerations and opportunities for their clients. This includes making use of educational material, such as webinars and guides, as well as engaging with lender business development managers to help them with specific questions.”
Brightstar and West One are therefore launching specialist workshops to bridge the knowledge gap for brokers about the sector, as well as providing client-facing guides.
OSB Group launches bridging range with Precise Mortgages and InterBay
The group said the proposition will help brokers meet client requirements for short-term lending solutions.
It added that there was high demand for heavy non-regulated refurbishment on properties due to lack of available property stock.
The range is a two-tier offering, in addition to standard bridging finance range, and will allow a “wider choice of streamlined options for brokers”. It covers structural works and extensions for residential customers as well commercial conversion.
Rates begin at 0.47 per cent for regulated and non-regulated products through Precise Mortgages and InterBay and up to 75 per cent loan to value (LTV) is available.
There is also a develop exit range up to 75 per cent LTV available through InterBay.
House to flat conversions and works that require planning permission are both allowed in the range through both Precise and InterBay.
Commercial to flat conversions are permitted through InterBay, and the firm also has a expanded solicitor panel which has dual legal representation.
Emily Hollands (pictured), head of specialist finance at OSB Group, said the launch coincided with the changing property market, which included heightened demand for houses in multiple occupation and changes in permitted development rights.
She added: “From our own research and market knowledge, we know that investors are looking at a wider range of properties for conversion into residential units as well as changing commercial usage from pure office space into a combined “work/eat/sleep” offering.
“With our combined expertise across both Precise Mortgages and Interbay, we’re confident in being able to offer the best support and knowledge across short term lending and this new product range cements our commitment.”
Rob Jupp, chief executive at Brightstar Financial said that it was a “really exciting announcement” from OSB Group and it was pleased to see a “comprehensive range of products”.
He said: “It’s wonderful to have InterBay back into the bridging market, alongside Precise Mortgages and their dual-branded approach offers the next level in terms of support and expertise. This new product range is very timely for the market.”
Bridging loans soar by nearly 40 per cent in 2021
A total of £626.7m bridging finance was approved by Bridging Trends contributors in 2021, a 38 per cent increase on the previous year when it totalled £455m.
Bridging Trends is a quarterly publication which tracks bridging loan completions from several UK specialist bridging finance packagers including Adapt Finance, Brightstar Financial, Capital B, Clever Lending, Complete FS, Enness Global, Finanta, Impact Specialist Finance, LDNfinance, Optimum Commercial, Sirius Group, and UK Property Finance.
In 2021, lending surged during the third quarter, at £190.24m, as buyers attempted to take advantage of the stamp duty holiday before it ended.
Regulated bridging loans accounted for an average of 40.8 per cent of all contributor transactions during the 12 months.
Demand for regulated bridging was highest in the first half of the year, accounting for 47.7 per cent during the first quarter and 41.6 per cent the second quarter as homeowners rushed to complete before the end of the stamp duty holiday at the end of June, before falling to 37.7 per cent in Q3 and 36 per cent in Q4.
Second charge bridging loans accounted for 15 per cent of total contributor transactions in 2021, down from 23 per cent in 2020. This is the lowest annual figure recorded for second charge bridging loans since Bridging Trends launched in 2015.
The average monthly interest rate in 2021 fell to 0.76 per cent from 0.79 per cent in 2020 and the average loan to value level hit a record high in 2021 at 56.9 per cent, up from 50.7 per cent in 2020, 52.9 per cent in 2019, and 54.6 per cent during 2018.
Funding an investment purchase was the most popular reason for borrowers using a bridging loan in 2021. This accounted for 25 per cent of all contributor completions, up from 22 per cent in 2020.
Funding a chain-break was the second most popular use at 18 per cent of all lending, up from 17 per cent in the previous year. The data highlights how bridging finance continues to be an attractive proposition to buyers looking to save their delayed property purchases.
The average loan term was 12 months, while the average completion time on a bridging loan increased to 52 days, up from 50 days in 2020.
Dale Jannels, managing director at Impact Specialist Finance said the full effects of the stamp duty holiday appear “loud and clear”.
He said: “It feels like a watershed moment for the bridging finance market. With it still being a sellers’ market in many parts of the UK, I expect regulated bridging to continue to be popular throughout 2022 and this is being mirrored in our business currently.”
Joshua Elash, founding director at MT Finance said: “In 2022 we expect gross lending figures to fully recover and surpass the 2019 gross figures as more and more investors return to the market with a view to taking early advantage of the anticipated impact inflationary pressures will have on asset prices. Indeed, we note that ‘investment purchase’ is again the single largest demand driver for bridging finance.”
Chris Oatway, director, LDNfinance said bridging finance had been a lifeline to those experiencing lengthy solicitor delays. “It’s not surprising we’re seeing that ‘funding a chain-break’ was a popular reason for bridging finance. Based on the enquiry volumes we received in January, we anticipate a good year ahead.”
Chris Whitney, head of specialist lending, Enness Global said the continued decline in second charge loans was slightly surprising. “However, we have lost some lenders in this sector, and no one really seems to have filled the gap. I think there is definitely room for some product and criteria innovation here.”
Matthew Corker, operations director, Knowledge Bank said maximum LTV continued to dominate the most searched terms.
“[This is] suggesting that brokers are trying to make the most of their budgets and borrowing the maximum they can. Regulated bridging again featured in our top three. With buyers vastly outnumbering sellers in the residential property market, it appears more common than ever for perspective home movers to use bridging loans to purchase an onward property before theirs has sold.
“Completing our list for the quarter was ‘minimum loan amount’. Interestingly, we’ve seen an increasing number of borrowers look to bridging finance to make minor improvements to properties, in contrast to the beginning of the 2021, where this search term rarely featured.”
Brightstar Financial and The Mortgage Mum launch women in finance forum
The forum will consider and address the outcomes of a recent Association of Mortgage Intermediaries (AMI) survey which consulted on diversity and inclusion in the sector.
The first Moving Forwards Forum event will take place on 17 March. The agenda will be based on the outcomes of a survey involving all founding members of the forum; the survey is being held on International Women’s Day, 8 March 2022.
Clare Jupp (pictured), group director of people development at The Brightstar Group, said she was delighted to be working in collaboration with The Mortgage Mum.
She added: “I believe that both businesses have a pioneering spirit and a strong commitment to supporting and accelerating the careers of women in the mortgage industry. As an ongoing spokesperson and activist for women in finance and the Women in Finance Charter, I have shown a genuine commitment and determination to supporting individuals and businesses so that we can increase the presence and success of women across the sector.”
“Our forum will assemble like-minded individuals from forward thinking businesses with the purpose of moving things forward for everybody. Improvements will come about through a cohesive approach and our focus will be on action and change.”
Sarah Tucker, founder and managing director of The Mortgage Mum, said she was thrilled to be working with Jupp and the Brightstar team.
She said: “Both Clare and I share a huge passion for improving this industry for women, and we feel that by joining our voices, we can make a much bigger impact. The industry has demonstrated a huge shift forward recently in their mindset towards diversity and inclusion, particularly in highlighting the problems in the recent AMI report, but it is clear there is still more work to do.
“Moving Forwards will allow us to find new and innovative ways to create a safe, uplifting, inspiring environment for everyone, and we believe we can collectively form part of the solution. I can’t wait to get started.”
Time for landlords to think about energy efficiency – Taverner
Currently, the minimum energy efficiency standards (MEES) allows for rented properties with a minimum of an E rating on the EPC. But from 2025, all new tenancies will require a certification of rating C or above and, from 2028, this will apply to all existing tenancies.
Upgrading a property from an EPC rating of E to an EPC rating of C is likely to carry considerable cost with potential works including improving wall and roof insulation, installing double or triple glazing and installing a more energy efficient boiler. Other methods of improving the EPC rating could include investing in renewable energy, using products such as solar panels and ground-source heat pumps.
It will be beneficial for landlords to plan for the implementation of these regulations sooner rather than later. Landlords we speak to on a daily basis often don’t know the current EPC rating of their property, so we are now speaking to them about their responsibilities and the upcoming changes.
Lenders offering more green products
We are already seeing a change in the way lenders are offering products, with a variety of green and EPC products now available, and we have access to exclusive products, often with lower rates and fees than those that are available direct to brokers.
For example, we have a range of specialist products that promote greater energy efficiency as they are only available on properties that have an EPC rating of A, B or C. These are seven-year fixed rate products with free valuations and a one per cent fee and rates start from as low as 2.65 per cent, varying on the property’s individual EPC rating. They are available on HMOs and multi-unit freehold blocks as well as standard properties. We anticipate there will be more products like this, and products that offer capital raising to help landlords improve the energy efficiency of their properties, in the near future.
Pandemic created ‘massive, renewed spirit of opportunity’ – Jupp
Speaking to Specialist Lending Solutions after Brightstar’s 10-year anniversary, chief executive Rob Jupp said: “When we started back in early 2011, there really wasn’t a specialist lending market in operation in the UK market, it was entirely shut, so we had to do our bit to reopen it.”
He said this was because the market was still recovering from the global economic crisis and credit crunch, which impacted the liquidity of the UK lending market.
According to Jupp, this meant a lot of borrowers were not able to buy a home as they did not fit traditional criteria and could not borrow.
He said: “Unless you were middle aged, middle class, low loan to value and a home mover you would really struggle to obtain a mortgage. I looked at them [other borrowers] and would wonder ‘why on earth is this client struggling to obtain a mortgage? They have a good job, there is no damage in the background like excess credit, it’s just a little bit unconventional’.”
He said the specialist market started to gain momentum with the likes of Precise and Together in 2012 and 2013, and then in 2014 and 2015 the “world and their wife decided they would fund a lender in that world, and the rest is history”.
After a decade in the specialist market, the company has worked with nearly 30,000 customers on 18,000 completions worth more than £5bn. It also has grown its reach to 75 per cent of the intermediary market and its team has expanded to 85 employees.
Speaking on more recent market conditions, Jupp said the specialist lending market “fared well” during the pandemic, especially those who used automatic valuation models at a time when valuers were unable to visit sites.
“Most of our lenders continued lending, only a small number didn’t. There was a lot of maturity, most lenders didn’t knee jerk. They worked with borrowers and supported borrowers with payment holidays.”
He continued: “The pandemic has created a massive, renewed spirit of opportunity, where the specialist market is now awash with potential borrowers that need to use that market in order to provide an entry to home ownership.”
He added that consumers were more aware of the specialist lending market and said there were increased options to achieve home ownership outside of traditional lenders.
“The specialist lending market is a very good pathway and entry point in to lending. There is no shame at all about using a specialist lender for a mortgage. You could be self-employed or have different income streams or had a tax issue in the past, or you want to buy a property with unusual construction or build a property in your garden. You can do a range of things.”
He added: “In the past if you needed a specialist mortgage you were sub-prime, and that could not be further for the truth now.”
Looking ahead, Jupp said the question around how to reach carbon neutrality would become increasingly important to lenders, particularly as one of the largest pollutant emitters is property .
Jupp added: “What we are finding is a revolution whereby it will be commonplace that people who take green mortgages will be very much rewarded and incentivised by their lenders on the basis that they will get a better price for their assets if they are more environmentally sound.
“That is growing by the day, not just because of COP26. Every lender I speak to the green agenda is at the forefront of everything they do.”
He cited upcoming legislation in three years’ time requiring landlords to get their existing properties to an EPC rating of C or above as an example of this, adding that many were uncertain as to how they would fund it as the bill for portfolio landlords especially would be “significant”.
“I think a lot of lenders in the mainstream market in the years to come will say if you’re buying a particular housing stock that isn’t energy rated A, B or C you might not be able to get a mortgage, we might not lend on that. Actually, energy ratings may be as significant as someone’s current credit rating,” he said.
He added that from a product innovation perspective, the specialist lending market had a key role to play and its actions would inform the mainstream market.
He said: “If we do it right, what we do is provide the environment and a template for mainstream lenders with cheaper cost of funds to replicate and produce mass market solutions. That’s where the specialist lending market is so imperative in the UK as it gives the intellectual capital of ideas to the mainstream market to improve on for the benefit of consumers.”
Changing role of the high street
Jupp said pandemic had “sped up the inevitable demise of the high street as a place to shop and to eat” and it would now be a “place to live”.
He said five years ago it would have been rare to get planning permission to convert flats above shops and there was no real need as retail tended to be on long-term contracts.
However, the high street has since changed with the growth of out of town and online shopping. That has left “swathes of vacant properties at ground level and above that are absolutely perfect housing”, Jupp added.
He said he expected the process of development to become “easier to realise” and this would occur on almost every high street. He added that this was already occurring in some areas.
“The CBD [central business district] is not going to be a place where people just go to shop and eat. It will be a place where they live, and probably eat and probably shop, but not very often. There might be a few nice shops and a few corporates, but it will be mainly independent retailers, nice restaurants, and places where you want to live,” he said.
This would provide opportunities for renovation, refurbishment, conversion, bridging and and so on, and will be something the specialist lending market should keep an eye on.
Lenders are responding to increased demand for second charges – Simpson
In general, the trend we have seen is that the shock of the pandemic has encouraged many people to be more cautious with their money. So, even while the home moving market was booming, many clients decided to increase the footprint of their existing property rather than engage in the competitive market and the associated costs of moving.
It’s definitely now the case that many people are seeing home improvements as a cost-effective way of progressing up the property ladder.
We’ve also seen many customers who have had to tighten their belts and live off of a reduced income for many months and this has jolted them into doing something to sort out their finances.
Unsecured credit has been so easy to access for so long and many people have taken on big commitments. The pandemic has created a lot more urgency for people to lower their outgoings.
Whereas borrower appetite remained strong throughout the pandemic, lender appetite definitely dipped last year. However, we’re now seeing many lenders returning to the product ranges they offered before Covid and often the rates are now even better.
It definitely feels like lenders want to lend at the moment.
Potential hurdles and forecast for next year
The one potential hurdle will be the impact of government support schemes coming to an end and whether this has a notable effect on unemployment. However, the uncertainty around this will be short lived and I think we will know pretty quickly what effect this will have.
It’s unlikely to change lender appetite overall, but it will make it harder for those clients whose finances suffer as a result.
However, while this may reduce demand amongst some potential customers, at the same time, we are now seeing client applying for second charge mortgages who were previously unable to access the market because they were on furlough or have had reduced income. This is likely to offset any reduction in demand caused by a potential increase in unemployment.
As we move into next year, I wouldn’t be surprised if we saw more lenders coming into the market, or broadening their proposition, to provide even more options for customers. The second charge mortgage market definitely continues to offer new opportunities to customers, to lenders and to brokers.
Mortgage firms collaborate on mental health charter
The MIMHC is a non-profit organisation founded by Crystal Specialist Finance, Coreco, Landbay, Chartwell Mortgage Services and The Brightstar Group. Knowledge Bank and Simplybiz Mortgages are also involved.
It follows recommendations made in the independent review into mental health at work in 2017 by Lord Dennis Stevenson and Paul Farmer, chief executive of mental health charity Mind.
The organisation’s steering group will set out to continuously produce reference material and practical support to support mental health and wellbeing.
Information will be available on its website www.MIMHC.co.uk. The site will also direct people to expert support.
An annual review will be produced by the organisation to demonstrate how the mortgage industry is performing against mental health metrics and whether the sector is progressing in improving the wellbeing of staff.
Signatories to the charter will commit to developing mental health awareness among employees, encouraging open conversations, providing employees with good working conditions that encourage a healthy work life balance. They must aim to promote people management through line managers to ensure there is a focus on wellbeing.
Signatories will also pledge to routinely monitor employee mental health and wellbeing through surveys and have a named contact for support.
Jason Berry, group sales and marketing director at Crystal Specialist Finance, said the pandemic highlighted the importance of mental health.
He said: “There is a lot of work for all of us across the mortgage industry to do in order to provide more substantial support to the mental health and wellbeing of our colleagues. I’m certain that the Mortgage Industry Mental Health Charter will give businesses across the sector a helping hand in delivering best practice.”
Nicola Firth, founder and chief executive of Knowledge Bank, said the firm was “incredibly proud” to be co-founders of the charter and said the help it would provide would be far reaching.
Rob Jupp, group chief executive at The Brightstar Group, added: “We all have mental health, and we are all vulnerable to suffering poor mental health, which can often be debilitating and isolating. We’ve always taken mental health very seriously at Brightstar and we have a team of mental health first aiders available to help any of our people who may be suffering.
“I’m so pleased that this Mental Health Charter for the mortgage industry has got off the ground and absolutely delighted that Brightstar is a signatory to it.”
Renewed opportunities remain in the commercial finance market – Fulcher
However, there remain options for strong applications, and good relationships along with strong sector expertise can still make the difference in getting a case across the line.
We’re currently seeing quite a few investment transactions, with investor clients looking to buy either commercial or semi-commercial property. Experience is the key to finding a solution for these cases.
A client doesn’t necessarily have to have previous experience in commercial investments, but if they are looking to finance a commercial asset, a track record in at least semi-commercial is useful.
Similarly, clients have options to invest in semi-commercial even if they don’t have semi-commercial experience, as long as they can demonstrate some experience in buy-to-let investing. Another consideration here is the rental track record on the property.
Typically, loans are available for up to 65 per cent loan to value (LTV) or sometimes 70 per cent LTV. In some cases, mainly on semi-commercial where a significant proportion of the asset is made up of residential, loans can be available up to 75 per cent LTV.
Strength of the individual business
Banks are still lending to trading businesses and the maximum LTV tends to be 70 per cent.
The main consideration in lending to trading businesses is clearly the strength of the business. Lenders will factor in whether that business has made use of the Bounce Back Loan Scheme (BBLS), and this is hitting the borrowing prospects for many.
However, if a business is strong and can demonstrate that it can sustainably service its BBLS debt, or pay off the balance, then there are lending options. In addition, the Recovery Loan Scheme continues to run until the end of the year and we are aware of lenders that have funds ready to deploy on this scheme.
In terms of sectors, retail, pubs and offices are still generally out of favour – which accounts for a lot of commercial lending. However, there are lenders willing to lend to businesses in these sectors and it is down to the strength of the individual business.
So there remains opportunities for brokers who want to secure commercial finance for their clients, whether they are investors or trading businesses.
The key is to work with the right partner that has the depth of knowledge, strength of relationships and access to make the most of renewed opportunities in the commercial market.