Copland spent 10 years with LSL Property Services after its acquisition of Pink Home Loans from Skipton Building Society.

Property Master, a direct to landlord business, launched three years ago and is a digital mortgage broker focussed on UK buy-to-let landlords and uses algorithms and artificial intelligence to search and match landlord’s mortgage requirements.

Angus Stewart, chief executive, Property Master, said: “I am delighted to welcome David to the team. He brings with him a wealth of experience of both the property market and of mortgage finance.”

Stewart said: “David’s role will be to complement that effort with the development of partnerships with organisations who can support us in bringing what we have to offer to even more landlords looking to find a better mortgage deal.”

Copland said: “I have followed Property Master’s development over the last few years, and I am excited at the prospect of now having a more hands-on role. Property Master has successfully made great strides in disrupting the market for buy-to-let mortgage finance which I know to be complex and challenging. The company’s use of technology is truly market leading and the savings they can make for individual landlords can be transformative. “

Copland was a founding director of Pink Home Loans a packager, a mortgage club and a mortgage and protection network and held various sales and marketing roles before being appointed to chief executive officer.

Speaking to Mortgage Solutions, Copland said the part-time role will be an entrepreneurial one and he will be working with the most accurate and sophisticated buy-to-let sourcing system in the market.

“The greatest appeal to landlords is that the system stores all their information in the back office CRM so you don’t have to collect that information again and therefore repeat business is extremely high,” said Copland.

“This will appeal to portfolio landlords of any size, but particularly those with larger portfolios,” he added.

Copland will also depart from his role at deputy chairman on the Association of Mortgage Intermediaries (AMI) board, where he has been for nearly eight years. 

He joined LSL when the group acquired Pink Home Loans in 2010, where Copland was CEO. Before this, he was the founding director of Pink Home Loans which was established in 1988, before going on to launch the Pink Mortgage Club and the Pink mortgage network which is now part of Primis. 

Copland (pictured) said: “I have thoroughly enjoyed my time with LSL fulfilling a number of roles including supporting the hugely successful TMA mortgage club, managing mortgage lender relationships on behalf of the group and more latterly working on digital propositions, including the investment in Mortgage Gym.  

“2020 has been a turbulent year for the mortgage industry, but Primis and TMA have performed extremely well throughout this period and I will leave proud in the knowledge that these businesses are in great shape and well positioned for future growth.”  

Jon Round, group financial services director at LSL, added: “I would like to take this opportunity to express my sincere thanks to David for his support and contribution over the last ten years.  

“David has played a significant role in the successful growth and direction of our financial services businesses, applying his depth of industry knowledge and insight. I will miss working with David as a colleague – and as a fellow West Bromwich Albion fan – but I wish him every success for the future.”

The alarming results show that lenders operating directly take more cases from remortgaging borrowers than they do new mortgages initially.

Indeed, the reversal of outcomes is so stark that the market share has been totally reversed by the time borrowers complete their remortgage.

With new property purchases severely limited under the present coronavirus restrictions, this means brokers will need to place a far greater emphasis on retaining their current customers and reverse this trend.

Mortgage Solutions analysed Financial Conduct Authority (FCA) data published in the occasional paper number 54, When discounted rates end: The cost of taking action in the mortgage market.

This was commissioned as part of the FCA’s compliance with the Competition and Markets Authority (CMA) investigation into the cost of mortgage loyalty.

The FCA followed the progress of almost 270,000 new two-year fixed rate mortgages taken out between July 2013 and June 2014 for a house purchase.

It then tracked the outcomes of these mortgages between January 2015 and December 2016, providing a six-month extension at either end of the 24-month initial rate period.

The results were generally encouraging for brokers, showing they were far better at ensuring the borrowers they dealt with did not end up on the reversion rates and remortgaged either internally or externally.

Losing remortgage battle

However, the total number of customers they dealt with fell sharply at the end of the process, as the chart below shows.

Of the 268,690 new mortgages originally issued at the start of the time period, 187,164 were completed through a broker, giving intermediaries a 70 per cent market share.

Just 81,526 new house purchase mortgages were completed directly with lenders, giving them a 30 per cent market share.

However, the analysis shows that by the time it came to remortgaging, brokers only completed a deal on 69,343 of those original mortgages – more than 100,000 fewer than were done at first.

In contrast, 109,170 remortgages, including internal switches, were completed directly with lenders – over 25,000 more than were done two years earlier.

Stuck on SVR

Lenders also retain all those customers who fail to remortgage and instead slide on to the standard variable rate (SVR) at the end of the term.

And once borrowers who pay off the loan are factored in, lenders can claim 161,911 borrowers out of the original 268,690 cases which were completed – only 81,000 of which were done directly with them to start with.

This gives lenders a 70 per cent to 30 per cent market split – a complete reversal of the original position.

While the data reflects a market from four years ago and brokers have made improvements to retention strategies since, it serves as a strong reminder as to how much work there is for brokers to do if they wish to retain their market position.

‘Way to get through this’

TMA director of mortgage services David Copland said he was not surprised by the original results and that brokers needed to focus on this part of their business.

“Some brokers are working hard on existing clients but not I’m not sure all brokers have been working hard enough, meanwhile lenders have been really focusing hard on these borrowers,” he said.

“In the market where there’s not much face-to-face business going on brokers have got a great opportunity, but only when putting themselves out there.

“They need to lean on their existing client bank, use technology and do contact them regularly. That’s a way of getting through this situation,” he added.

He said: “This represents a huge opportunity for advisers to talk to their customers about remortgaging, and to help them lock in the best deals available to them. As more brokers work to secure the best possible outcomes for their clients, there’s no reason why today’s remortgage numbers can’t continue to rise as we look ahead to the rest of the year.

“For certain borrowers, a product transfer may be the best option – another reason why advisers should be checking in with clients and reviewing their circumstances regularly. This is an area of the market I hope will be more frequently and robustly reported on in the future,” he added.

UK Finance figures out this morning show in June, the final month in Q2, there were 16,880 new remortgages with additional borrowing, 8.3 per cent higher year-on-year.

The average amount borrowed was £56,100. There were also 15,320 new pound-for-pound remortgages in June 2019, 23.9 per cent fewer than in June 2018.

Fewer fixed-rate mortgages came to an end and the growing popularity of product transfers partly accounts for this, said the trade body.

Landlord mortgages

In buy to let, however, both purchase and remortgage financing has been trending downwards.

Around 5,300 new buy-to-let home purchase mortgages completed in June 2019, 3.6 per cent fewer than this time last year, with 12,500 remortgages in the buy-to-let sector, 0.8 per cent fewer than the same month in 2018.

In June 2018, the number of five-year fixed rate mortgages overtook the number of two-year deals across the market for the first time.

This trend has continued into 2019, with five-year fixes remaining the most popular product options for new mortgages.

On residential and buy to let, Callum Bilbe, analyst, data and research, UK Finance said in his blog this month: “This, coupled with some borrowers locking into attractive rates early, may have contributed to the slight drop in the number of homeowner mortgage deals coming to an end, with 400,000 ending in Q2 2019 compared to 440,000 in Q2 2018,” he said.

Making their move now

Andrew Montlake, managing director, Coreco, said the stupendously low’ remortgage rates have also driven frenzied remortgage activity through June and July.

“Paradoxically, the growing likelihood of a no-deal Brexit and the uncertainty that could bring has created a lot more activity in the mortgage market,” he added.

“Homeowners and prospective buyers are wary that lenders could retreat into their shells if it all goes pear-shaped and even raise rates so they’re making their move now.”

Montlake said a lot of households have concluded there is as much risk to the wait-and-see approach to Brexit as simply getting on with it.

“Better the Brexit devil you know than the one you don’t.”

Conor Murphy, CEO of Smartr365, agreed that homeowners were choosing to improve not move, adding: “Consistent mortgage lending is good news for brokers, as consumer demand remains strong for intermediaries and advice.”

The popularity of product transfers continues to soar with 1.2m borrowers refinancing this way last year, against 460,000 remortgages, with the trade body’s next data on the sector out on 23 August.

According to the trade body’s data there were 25,450 homemover mortgages completed in April, up 6.4 per cent from the same period last year.

There was also a sharp annual rise in the number of first-time buyer deals completed in the move, from 25,370 in April 2018 to 27,370, an increase of 7.9 per cent.

The value of this lending jumped in line with the increase in loan numbers. The value of new homemover mortgages rose from £5.11bn to £5.63bn, while first-time buyer loans jumped to £4.62bn from £4.16bn.

In contrast, the number of pound-for-pound remortgages dropped notably over the period. In April there were 19,140 such remortgage deals completed, 6.2 per cent fewer than the 20,400 a year ago.

There was a slick uptick in the number of new remortgages with additional borrowing, from 18,860 to 18,890.

Overall the total number of residential remortgages dropped by 3.1 per cent over the year, while the value of that lending shifted from £7.18bn last year to £6.77bn this year.

On buy to let, there were 5,100 new purchase deals completed in the month, with 14,400 remortgages as well. This is unchanged in number and value from the same period last year.

Opportunity for advisers

David Copland, director of mortgage services at TMA, suggested that remortgages presented a huge opportunity for brokers, noting recent data from Barclays suggested there was £90bn of residential remortgages coming to the end of their terms in the coming months.

He said: “Advisers should be tapping into this area of the market sooner rather than later, engaging with those clients and reviewing their circumstances to ensure they’re on the most cost-effective product for them.”

Vikki Jefferies, proposition director at Primis, described the outlook for first-time buyers as “broadly positive”.

She continued: “Market innovations like Help to Buy have gone a long way towards helping this pool of buyers get their foot in the door – quite literally. Advisers also play a key role in helping more want-to-be homeowners to take that first step onto the ladder.”

Andrew Montlake, director of Coreco, said it was interesting that the impact of tax changes for buy-to-let borrowers “appears to have settled down”.

He added: “The buy-to-let market is not what it was but has now reached a new equilibrium.”

With mortgage technology continuing to advance it is even more important for brokers to maintain a strong relationship with their customers, NatWest has urged.

Speaking on Mortgage Solutions Television in association with NatWest, senior corporate account manager David Toulson argued technological progress would continue whether brokers thought it was a good or bad thing.

And he noted technology and the implementation of artificial intelligence would have an impact, particularly on the remortgage market.

“It’ll be those who embrace this as an enhancement of the service being offered who will see the biggest benefit from it,” he said.

“One thing to watch for is the new entrants coming in to the market, such as Podium from Moneysupermarket, where customers have traditionally used them to search for a deal and then referred to the broker market.

“But they aim to change behaviour and act as an onsite mortgage broker and there is an impact there in terms of the lead source,” he warned.

Toulson continued by highlighting that the stronger the relationship the broker has with the client the better.

“The more touch points and engagements that they have throughout the relationship I believe the better the chance brokers have of keeping customers and that customers keep coming back to them,” he added.

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In the video, in association with NatWest, the broker firm noted that these and other flexibilities were becoming more important as customers increasingly take-on longer fixed rate deals.

Speaking on Mortgage Solutions Television, John Charcol product technical manager Nick Morrey said: “The idea of knobs, bells and whistles that come with a mortgage is still very important.

“So lenders that differentiate themselves by allowing or being a bit more flexible with overpayments, or payment holidays, or potentially offering offset type facilities will definitely help as people’s needs change so much over the years, especially now that people tend to be going for five-year fixed-rates more.”

He added that by taking out consecutive five-year fixed deals borrowers could potentially be with a lender for a decade.

“A lot changes in a decade, so the more flexible a lender is to their approach to the client and their circumstances the more we’re going to favour them as someone to look after our clients,” Morrey said.

Other videos in this NatWest video debate series include discussions about the rise of older borrowing and the importance of conveyancing and free legals.

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Speaking on Mortgage Solutions Television, LSL director of mortgage services David Copland said there had been issues with free legal services on remortgage products.

“Brokers find it difficult to justify through compliance department the reason they’ve decided not to go with the free legals, because there’s been really poor service, and therefore ask the client to actually put their hand in their pockets,” he said.

Copland also agreed there had been problems in the last 18 months with the volume of business going through some solicitors.

But he added that without a free legal option it made product transfers more attractive.

John Charcol product technical manager Nick Morrey noted that it was a difficult situation for brokers as they were unable to put any pressure on conveyancers when things went wrong on free legals.

He noted this was more likely to happen on cases which may have any sort of complexities to them.

Speaking on Mortgage Solutions Television, NatWest senior corporate account manager David Toulson said the lender appreciated it was a huge growth market.

“It’s something we’ve been actively assessing and reviewing, but we don’t have a timescale of any decision as such,” he said.

“However, there’s a lot of things to consider taking into account partly due to the recent pension reforms that have been implemented.”

He added that NatWest would like to see how this develops as people utilise the ability to draw down lump sums from their pension pot.

Not a lot of training

Also speaking in the debate, John Charcol product technical manager Nick Morrey questioned whether brokers had the right support and knowledge to be advising on the whole range of later life products.

“Retirement Interest Only has come in with a little bit of fanfare, but not a lot of training or support may have been provided by some broker [firms] and the brokers themselves are now facing a challenge,” he said.

Last month NatWest announced it will direct interest-only customers aged 55 and above who are at the end of their mortgage term and unable to repay their loan towards Legal & General Home Finance’s lifetime mortgage range.

Named houses in multiple occupation (HMOs), the definition of these properties was expanded on 1 October to include any property occupied by five or more tenants.

The changes also mean that flats above high street shops could now be included in mandatory licensing, as well as smaller blocks of flats.

In addition to these adjustments, the room size of properties must now meet minimum requirements.

This includes single bedrooms for a person over 10 years old measuring a minimum size of 6.51 square metres and a double bedroom measuring at least 110.22 square metres.

The previous rulings defined a HMO as ‘a property at least three storeys high, with communal facilities such as bathrooms and a kitchen, rented to at least three people who account for two or more households.’

As HMO legislation has expanded this has had a knock-on effect for landlords.

Broker impact

For brokers, it is likely that these changes will lead to increased pressure from their landlord clients to understand the new requirements.

It is vitally important to engage with landlord clients to ensure that their property portfolio meets the HMO requirements.

Landlords should be reminded that failing to meet these could lead to hefty fines.

Each property requires its own HMO licence, and for property investors and those with significant property portfolios this could dramatically increase the amount of administration and checks that the landlord must undertake.

Coupled with the fact that a HMO license is only valid for a maximum of five years, brokers should be speaking with clients regularly to understand their needs, and requirements.

Consider landlord protection policies

In addition to the legal requirements, brokers should also be encouraging clients to consider additional policies, such as additional risk protection for damage due to the fault of a tenant.

The option to guarantee income in case a tenant is left in arrears is another vital aspect that brokers should discuss with their clients, as is cover should the tenant be unable to meet rental payments.

The buy-to-let market has undergone a significant period of change, with recent months seeing stamp duty changes in addition to the HMO rulings.

Brokers can help to ensure clients are prepared for the changes and are also considering additional provisions.