SVR cap would not impact wider mortgage market – UK Mortgage Prisoners
In a written response to a question posed by shadow defence minister Chris Evans, Glen said that an SVR cap would “undermine the principle of risk-based pricing”. He added that the SVRs on closed books and active books were in-line.
Rachel Neale, lead campaigner for UK Mortgage Prisoners, said the comparison between the SVRs on closed books with those on the active market were not appropriate.
“The issue is those in closed books cannot access fixed rate products available in the active market, so only to compare mortgage prisoner rates with active SVRs is not appropriate. We are not in an ‘active market’ and a cap on closed books would not impact the wider market as claimed.”
Last year, UK Mortgage Prisoners said a guarantee scheme similar to that used for first-time buyers should be used if SVR caps were voted down in government.
Neale said Glen has made “empty promises” to look at other solutions since April 2021 and had come up with zero solutions in that time period, nor had he responded to those solutions suggested by UK Mortgage Prisoners and others.
She added that interest-only borrowing was “perfectly acceptable” and promoted by brokers and lenders pre-financial crisis. She said customers were often misled with promises of switching from an interest-only mortgage after a short fixed period “without any care by the lenders or brokers to have repayment vehicles in place”.
Neale noted that changes to affordability regulation were then made, meaning loans were sold off to non-lending entities.
“John Glen continues to blame the victims rather than resolve the issue which was not created by the borrowers,” she added.
Neale said: “Our members are overwhelmed by a cost-of-living crisis and interest rate rises, we live crisis within crisis after over a decade of unfair treatment.
“There is a tsunami of repossessions on the horizon with almost one million pre-crash interest-only loans maturing over the next decade. It is high time victim blaming and repeated feeble excuses were left behind by the government and replaced with action.”
Kensington Mortgages appoints Adam Sheldon as national account manager
He joins from Legal and General Mortgage Club where he was key relationship manager for just over three years, and before that he worked at Leek United Building Society for just under eight years, most recently as national business development manager.
Hall said: “Adam joins us at a fantastic time at Kensington, as we continue with our ambitious growth plans whilst maintaining market leading levels of service. Adam will be responsible for developing and nurturing the relationships with some of our valued intermediary partners.
“His skill set will be invaluable as we continue to strengthen Kensington’s brand as an innovative and forward-thinking specialist lender while adding value to our partners’ businesses.”
Sheldon added: “I’ve admired Kensington’s customer centric propositions, people and ambition for some time now.
“With all the well documented macro-economic challenges in the market, I believe specialist lending will continue to grow and I look forward to helping Kensington achieve their goals in helping clients with more specialist needs and supporting more customers into home ownership.”
In recent weeks it has been announced that Barclays will acquire Kensington Mortgages from funds associated with Blackstone Tactical Opportunities and Sixth Street.
It was also reported that Pimco would also purchase some of Kensington Mortgages’ assets.
The lender also confirmed £1.3bn in additional funding and has partnered with equity loan lenders Even and Proportunity.
Kensington has also partnered with insurer Rothesay for long-term fixed rate mortgages.
Natwest extends product transfer roll off window to six months
The lender said it believed this change would be beneficial for customers as it would “give them more time to complete their product transfer and the opportunity to secure their new mortgage rate sooner”.
Natwest said the change also applied to its Metro to Natwest customers.
For customers whose deals were due to expire in December, their product transfer roll off window will now be 1 July.
Deals that were due to expire in January next year product transfer roll off window will start from 2 August, and for deals due to end in February next year the window will open from 1 September.
The product transfer window for deals ending in March, customers can start the product transfer process from 1 October.
The lender added that customers whose product ended in November would also be eligible to switch from 1 July.
Natwest said that if the date fell on a Monday, Sunday or bank holiday then the roll off window would start from Tuesday.
Central Trust develops origination platform
As a result, new applications can be submitted directly via the portal and into the origination platform. There will be no need to email any details or documentation separately.
The improved portal will now be able to provide agreement in principle (AIP) referrals direct to the mortgage desk, electronic income verification and real-time case tracking.
Central Trust has promised that its underwriting team will provide a same day update on all submissions received prior to 1pm when documents are sent via the portal, otherwise updates will be within 24 hours of receipt.
Similarly, all AIPs that require a referral will get a response within one hour when the portal is used. Referrals are visible to the underwriting team when an application is submitted.
Maeve Ward (pictured), director of commercial operations at Central Trust, said that the lender was committed to delivering a quality service to all brokers, whether they have used Central Trust before or are new to the lender.
She continued: “We appreciate that a journey for one person might not work for another, and while the system is our preferred submission route, we will for a period of time accept email submissions from brokers while we provide them with training on the new system.
“We have invested heavily in our systems and today’s announcement is the culmination of much of that investment, all in service of our commitment to providing service which is second to none.”
Central Trust recently announced its move into lending in Northern Ireland, while it has also expanded its arrears criteria and accepted income streams.
Air hires senior business development consultant to spearhead proposition
In her role, she will engage with potential and existing partner firms and advisers to examine how they use Air products. This includes Air Club, Air Sourcing and Air Academy.
Palmer most recently worked at Canada Life for nearly three years, latterly as a key account manager.
She won best business development manager at the Equity Release Awards earlier this year.
Prior to that she was a mortgage arrears specialist at Capital Home Loans for just over a year and has also worked at RBS and John Charcol.
Jon Tweed, distribution director at Air, said: “Nicola is a great addition to the team and I am looking forward to working closely with her.
“Air is committed to supporting all brokers and lenders operating in the later life lending sector, no matter how large or small and Nicola will be an integral part of strengthening and deepening our relationships with both new and existing contacts moving forward.”
Palmer added: “I am thrilled to be joining Air at such an interesting time for the business. Air recently relaunched its proposition at the National Later Life Conference as well as revamped its adviser CPD training programme via Air Academy.
“There are lots more exciting developments happening behind the scenes at Air and I can’t wait to get out there and discuss these propositions with new and existing contacts.”
Around three quarters of key workers fear owned-homes out of reach – Vida Homeloans
According to research from Vida Homeloans, which surveyed around 2,000 key workers, 94 per cent said that they did not believe that they could get a mortgage right now.
Around a quarter said that it would be at least five years before they could consider applying for a mortgage, and even at that point over a third did not think it would be possible to get a mortgage to purchase property in their desired area.
One factor cited was the rising cost of living, with 22 per cent of those surveyed saying that they were struggling financially.
Vida’s research found that key workers on average had £130 of disposable income left each month.
According to the Office for National Statistics, the median household disposable income was £31,400 in the year ending 2021. This is equal to around £2,616 per month.
Nearly half of key workers said they had considered changing their career to increase their earning potential to save for a house and improve affordability for a mortgage. This rose to 59 per cent of those aged 18 to 34.
Around half of those surveyed said they were not fully aware of the options that are available to them.
Anth Mooney, chief executive at Vida said that key workers had been the “backbone of this country” for the past two and a half years and the findings were worrying.
He said that he was particularly concerned that many were considering changing jobs in order to buy a home.
“If the pandemic has taught us anything it is that we need these people, and the vital services, they perform,” Mooney added.
“It is clear that quite a few of these incredible people feel cut out of traditional mainstream lending and this is why Vida decided to launch a bespoke offering for keyworkers. I would really urge anybody who is looking to get on the housing ladder to speak to a mortgage broker who will be able to help them”.
Majority of brokers don’t shop around for affordability tech ‒ MBT
According to a survey from Mortgage Broker Tools (MBT), which collated responses from 400 brokers, 70 per cent said they used an affordability platform for research purposes on at least two thirds of their cases, but very few shopped around.
Affordability and criteria platforms have become a crucial part of a broker’s arsenal, with MBT, Twenty7Tec, Knowledge Bank and Criteria Brain among some of the providers available.
The survey said that only one in five shopped around for the best platform, with most sticking to the first one they used.
Tanya Toumadj (pictured), chief executive at Mortgage Broker Tools, said it was “encouraging” to see more brokers using technology to assist their affordability research, but it was “surprising” that many settled for the first one they used.
“There are many different options available now and some are better than others,” she said.
The research found 64 per cent brokers said accuracy was the most important to them, so they could ensure that they were selecting the most suitable lender.
Toumadj noted that different platforms had different levels of accuracy, adding that 79 per cent of brokers said MBT was accurate on majority of cases and a further 11 per cent said it was always accurate.
This compares to 67 per cent who said other platforms were accurate on majority of cases.
“The conclusion is that perhaps the market requires a bit more awareness of the platforms on offer for brokers and brokers could shop around first before jumping on board,” she said.
Later life lending definition helps assess worth and growth prospects – Wilson
For a start, AKG Financial Analytics’ research paper on the UK later life market, perhaps for the first time, gives us both a definition of later life lending and what it actually might be worth.
Firstly, the definition – ‘Standard, retirement interest-only (RIO) or equity release mortgages for borrowers over the age of 55 with terms that extend into, or start during, retirement’.
Now, on the face of it, many practitioners and stakeholders will say, ‘Of course that’s the definition’, but it’s not been widely agreed upon before, and there has been a tendency to look at this sector purely within the confines of equity release, even if we’re all acutely aware that the sector is much broader than this.
Introducing that definition also leads on to being able to assess its worth, and unsurprisingly, it goes way beyond the £6bn-ish of lending we might see purely in the equity release space in 2022.
AKG estimates that in 2021, £54.9bn worth of new later life lending and product switching took place, while it estimates the entire later life lending market is worth up to £153.9bn.
Later life lending is more than equity release
Why does this matter? Well, up until relatively recently we have tended to believe, as mentioned, that later life lending was simply equity release, but that due to the relatively small amounts of business being written, that it was a niche market, with a niche attraction for both advisers and providers.
Again, for us working within the space, we could see it was moving beyond that and the sector was growing strongly, but I suspect there were few of us who could put a figure on the entire market, let alone the business being achieved in any given year. And, if we could, I doubt it would be at the levels cited above.
This makes a huge difference, because it shows the significant amount of lending that has already taken place, but it also shows the potential that exists, and it generates a pathway for new entrants, both from an adviser and a provider point of view.
Ongoing education vital for later life growth
Now, of course, there are still obstacles to overcome here, and the report doesn’t shy away from highlighting those, particularly in terms of the ongoing education that is going to be required if later life lending is going to continue on this trajectory.
Those of us within the sector might think we have done a relatively good job in terms of both adviser and consumer education, but what strikes me from this report, and other research into this area, are the significant barriers that still exist when it comes to later life lending particularly around getting consumers comfortable with it.
The Equity Release Council continues to do sterling work in this area, but we know the sector comes with a large amount of historical baggage which can weigh heavily on consumers, even when it is the most suitable solution for their needs.
Standard Life Home Finance research into this area highlights the questions that are often raised around security of tenure, inheritance concerns, the expense and the complexity of the process, and of course the sector is still fighting a reputation gained over 30 years ago.
That said, we have the answers to alleviate all those concerns and the broader range of products we have now, the ways they can be used, the criteria elements that can ensure the client gets the money and the peace of mind they want, all add up to a position where these products should not be feared at all.
But, consumers are not going to know this unless we tell them. We recently held our national conference and the message that was heard time and time again around developing the sector, helping more customers, and advisers’ role within it, was about the ongoing need for education.
There can be no doubts that education will help us build on the very firm foundations we have in place and will open up the later life lending sector to far more practitioners and far more consumers who can benefit from it.
Chorley BS joins Primis Mortgage lender panel
The mutual offers later life, remortgages, buy to let, standard variable rate (SVR), Help to Buy, First Homes, shared ownership, historic adverse credit rehabilitation loans known as renew mortgages, a discount market scheme on new build properties and holiday let products.
Primis is owned by LSL Property Services and offers a wide range of support including training, events, business development, regulatory guidance, technology, and a broad product panel.
Julie Goodwin, head of business development at Chorley Building Society, said it was thrilled to be part of the Primis Mortgage Network and looked forward to supporting members with its “flexible approach to lending”.
She added: “We specialise in buy to let, self-build and later life lending and we are happy to help advisers with their complex cases. We look forward to working with Primis advisers, and seeing the benefits our individual underwritten service brings their clients.”
Vikki Jefferies (pictured), proposition director at Primis, said: “We’re pleased to welcome Chorley Building Society to our network, in a move which ensures our brokers continue to have access to the broadest range of products available, in order to best serve their clients’ needs.
“Their specialist lending products as well as their prime residential products will add real value to our panel.”
Accord Mortgages adds discounted SVR products
Buy-to-let rates start at 2.15 per cent for a two-year term at 60 per cent loan to value, based on a discount of 2.84 per cent on the lender’s SVR. The SVR is currently 4.99 per cent.
For residential products, variable rates start from 2.14 per cent at the same LTV.
Residential customers can access a fee-free discounted variable rate of 2.21 per cent at 75 per cent LTV and a discounted variable rate of 2.34 per cent at 85 per cent LTV with a £495 fee and £500 cashback.
Products are available for purchase and remortgage and come with a free standard valuation. Cashback and Accord’s remortgage legal service is also available.
Simon Garner (pictured), mortgage manager at Accord, said: “We’re pleased to reintroduce our discounted standard variable rate mortgages, now with additional incentives, to give brokers more choice when advising both residential and landlord clients.
“These products provide a lower initial rate than our equivalent fixed rate products and with the additional features, could provide great value options for brokers and their clients.”