Foundation expands BTL and The Nottingham launches limited company deals – round-up
Foundation Home Loans has returned its buy-to-let range to its pre-lockdown offering and reduced rates on a number of products.
The lender has reintroduced its large loan, early remortgage and short-term let products up to 75 per cent loan to value (LTV).
The large loan mortgage is a five-year fixed available up to 65 per cent LTV with a rate of 3.29 per cent and the early remortgage deal is a five-year fixed, up to 75 per cent LTV with a rate of 3.65 per cent.
The short-term let product has a two- and five-year fixed offering with rates of 3.99 per cent and 4.64 per cent respectively. Both are available up to 75 per cent LTV.
These products have seen rate cuts of up to 0.4 per cent from what they were previously and are available to the lender’s F1 borrowers, which is aimed at those who require larger loans.
Jeff Knight (pictured), director of marketing at Foundation Home Loans, said: “It’s fair to say that the buy-to-let market is in a different place to where it was at the start of the year, but with each week we are marking that return to a ‘new normal’ and we are offering our adviser partners access to a wide range of products for their clients.
“We’ve seen a strong demand from intermediaries who say there are many landlords who want to make the most of the opportunity, refinancing in order to fund future purchases, and looking at diversification of their portfolios. These products will allow them to do that.”
The Nottingham launches BTL limited company range
The Nottingham for Intermediaries has released buy-to-let mortgages for clients borrowing through a limited company.
The products are available for purchase and remortgage at 75 per cent LTV.
This includes a two-year fixed at 3.05 per cent with a booking fee of £299 and arrangement fee of £700. The fee-free option has a rate of 3.45 per cent. The five-year fixed option has a rate of 3.75 per cent with no fee, and 3.55 per cent with a one per cent arrangement fee.
Partnerships or LLPs will not be considered and a maximum of four directors will be accepted.
Rental income must cover at least 125 per cent of the monthly interest payment on an interest-only basis and the mortgage payment is calculated at 5.5 per cent.
Halifax cuts mortgage rates and Foundation makes criteria changes – round-up
As of 1 July, Halifax has cut rates by up to 0.98 per cent for existing customers.
Within its product transfer and further advance range, the fee-free two-year fix at 0-60 per cent loan to value (LTV) and the three-year equivalent for borrowing amounts between £0 to £99,999 have both been cut by 0.98 per cent to 1.5 per cent.
The five-year 60 per cent LTV equivalent has been cut by 0.97 per cent to 1.62 per cent.
Other product transfer and further advance deals in higher LTV tiers up to 85 per cent have seen reductions from 0.83 per cent.
For product transfer and further advance deals from £100,000 to £249,999, rates have been cut by up to 0.21 per cent across two-, three- and five-year fixes.
Reductions of up to 0.17 per cent have been made for deals with loan sizes from £250,000 to £7.5m.
This includes a two-year fixed at 60-75 per cent LTV, with a £1,499 fee reduced by 0.06 per cent to 1.17 per cent and the five-year equivalent cut by 0.08 per cent to 1.46 per cent.
Ian Wilson (pictured), head of Halifax Intermediaries, said: “We are constantly reviewing our offering and listening to broker feedback as part of our commitment to the intermediary market. These changes are designed to help support our existing customers in the current environment.”
Foundation Home Loans revises specialist residential criteria
Foundation Home Loans has made changes to the criteria of its specialist residential range following feedback from its adviser, distributor and packager partners as part of its strategy to increase its residential market share.
The lender will now accept one year of accounts for self-employed clients and borrowers no longer need a minimum time in employment for their current job. However, borrowers must have a minimum of three months’ employment history.
It will also accept up to 100 per cent bonus and commission, investment income or rental income.
Borrowers are also allowed to capital raise to purchase buy-to-let properties and the maximum payment term has been increased to 40 years.
These criteria changes follow a recent update to Foundation’s products including raising LTV from 75 per cent to 80 per cent, the launch of five-year deals, and an offering for first-time buyers.
Jeff Knight, director of marketing at Foundation Home Loans, said: “The market is delivering a far greater number of specialist residential enquiries to adviser desks, and we want to be in a strong position to help, especially in terms of those cases which may be beyond the ordinary.”
Foundation ups LTV to 80 per cent and adds first-time buyer exclusive
The specialist lender has added five-year fixed rate deals to its offering, and a new product for first-time buyers.
The deals are aimed at residential borrowers who have missed payments on other loans or agreements in the past that have resulted in a default or County Court Judgement, or for those who have been turned down by a high street lender.
As part of its F1 range, Foundation is offering five-year fixed rates starting at 3.49 per cent at 60 per cent LTV, up to 4.39 per cent at 80 per cent LTV. Five-year fixed rates have also been added to its F2 and F3 ranges.
For residential first-time buyers the lender is offering a two-year fixed-rate product at 4.09 per cent and a five-year fix at 4.49 per cent both up to 80 per cent LTV.
Previously, Foundation’s maximum loan to value was 75 per cent.
Foundation cuts ICRs and ups LTVs
The changes come as part of a buy-to-let product and criteria overhaul by the lender which has increased its maximum loan to value (LTV) and reduced rates.
Limited company and basic rate taxpayers will now need a 125 per cent ICR at 5.5 per cent, rather than the 145 per cent which remains in place for higher rate taxpayers.
Foundation has increased its maximum LTV to 75 per cent, including for houses in multiple occupation (HMOs) and multi-unit blocks (MUBs), as it continues to return towards its previous lending proposition.
As part of the rate cuts, two-year products now start at 2.94 per cent and five-year deals from 3.54 per cent.
Foundation has launched a five-year fixed fee product for F1 borrowers, aimed at borrowers looking for larger loans. It is offered at 3.84 per cent up to 65 per cent LTV or 4.29 per cent up to 75 per cent LTV and comes with a fixed fee of £1,995.
It has also launched a packager exclusive range with no early repayment charges at up to 75 per cent LTV with rates from 3.34 per cent up to £1.5m and a two per cent fee added.
Marketing director Jeff Knight (pictured) said the changes represented the next step forward for Foundation in the buy-to-let space.
“Since returning to new lending last month, we’ve seen a growing interest from advisers and landlords as they seek to both refinance and add to their portfolios,” he said.
“As the market continues to change, we have taken the decision to enhance our product offering, broaden our criteria and introduce new products which we believe provide a greater degree of flexibility for landlords whose circumstances may well change over the next 12 months.”
Foundation praises landlords for ‘responsible’ use of payment holidays
CEO Hans Geberbauer (pictured) noted that there had not been widespread mis-use and landlords had taken breaks for genuine reasons.
He highlighted that guidance from mortgage advisers and industry bodies had been instrumental in ensuring the overwhelmingly responsible use of mortgage payment deferrals by landlords.
“When the initial government announcement was made about the availability of payment deferrals, there was considerable concern that landlords would request mortgage deferrals indiscriminately and potentially with a view to funding new investments, rather than using it to help tenants,” he said.
“While most lenders have experienced some egregious cases of misuse, our analysis shows that landlords should be widely commended for having taken both a considered and responsible approach to this issue over the past few months.
“We know that landlords have been helping tenants wherever possible, while using mortgage payment deferrals only where necessary,” he added.
The lender also noted that while landlords with short-term lets were unsurprisingly highly likely to need a deferral, it believed there was still opportunity in this market.
“As the lockdown eases but the opportunities for travel abroad may remain limited, short-term let landlords may well experience a resurgence in demand for their properties as Britons holiday in their own country,” it said.
Foundation said it had analysed its loan book and found portfolio landlords were no more likely to have taken a break than their non-portfolio counterparts.
And those who borrowed through a limited company vehicle were also less likely to have taken a payment holiday than those borrowing as individuals.
However, landlord borrowers with larger mortgages were more likely to take a break.
Contact your clients with a simple and sincere message of support – Knight
When I am on the walk, I will often bump into people I have not seen for a while – not literally, all from a sociably acceptable distance – and when I do, the same questions seem to arise.
“Are you working from home, or are you furloughed?”.
First, it’s quite amazing how many new words and phrases have emerged from this period. Furlough is certainly a new one on me, as is social distancing.
I also read a recent article which highlighted the terms ‘covidiot’ and ‘covexit’ both of which seem pretty self-explanatory.
Add to these even more obscure ones such as ‘blursday’ (an unspecified day because of lockdown’s disorientating effect on time) and “zoombombing” (hijacking a Zoom videocall), and there is enough to be keeping the new additions committee of the Oxford English dictionary busy for a while.
Second, having been asked those questions a lot, it got me thinking.
The world has changed so dramatically, and with such speed, that I don’t know what kind of impact this has had on all of my friends and acquaintances.
Keeping in touch
So, I thought I would pose a question of my own – how much do intermediaries know about the current working situation of their clients?
The pace at which government decisions have, and are, being made around lockdown, policy, payment holidays and income support have impacted huge numbers of people in some form.
Circumstances are changing with the blink of an eye as a variety of businesses across all sectors are searching for ways to cut costs and continue operating within the confines of the current landscape.
This uncertainty will result in additional pressure on many financial situations and hearing from an expert in financial matters who can help guide them through this turbulent period could well prove to be a godsend for those affected. The key message is to stay tuned-in and stay connected.
When I say stay tuned-in, I mean the importance of getting a real grasp of what impact the crisis has had, or is likely to have, on your colleagues and clients.
Knowing what is happening today could have a big impact on future conversations. So, stay tuned-in and find out how client needs have changed, and how you can better support them.
You can do this by staying connected. See what people are saying on LinkedIn or drop them an email, a text or a call.
It is amazing how grateful people are when someone they know gets in touch. Not to sell something, but just a simple “hello and how are you”. And don’t limit this simple task to just clients.
Understand each other
In a reverse approach, why not reach out and stay connected with your lender BDMs.
People are repeatedly saying ‘we are all in this together’ so two-way communication is especially important in facilitating this.
The role of the BDM is also having to change.
Regular face-to-face meetings are still not feasible and won’t be for some time.
Technology has highlighted that hours spent in cars travelling to meetings are not necessarily the right way to go – all the time at least.
We all need to find ways to better engage and interact in a more effective and collective manner. A little empathy will also go a long way during what will inevitably be a transitional lending period.
So, let’s all make that bit more of an effort to understand individual circumstances and the best way to do this is stay tuned-in and stay connected.
Embrace the boredom to find creative business solutions – Knight
And in the current market, generating ideas is one of the most important things we can be doing to help us overcome current challenges and future ones.
However, things that can often stimulate creative thinking – such as human interaction, a change to the daily routine, or a change in scenery – are not feasible right now.
So alternative solutions many be needed:
Embrace the boredom
I’ve heard a lot of people say to me “yeah I’m fine thanks, just a bit bored”.
The pace of life has changed for many and intensified for others, like NHS workers for example – it’s something we all have to adapt to in our own way.
However, if you do feel bored, then embrace it. Many of us have complained about being rushed off our feet in the past and having no time to think.
I have talked before about soft thinking, so in times of boredom take the opportunity to let your mind wander and wait for those ideas to emerge naturally from its depths.
Try something new
Read a type of book you’ve never read before. Listen to an album or genre of music you’ve never listened to before. Go for a run. Listen to a podcast.
Say hello to that neighbour you’ve never spoken to – from a socially acceptable distance of course.
Any one of these might get your creative juices flowing, or at worst generate a new experience.
Maintain human contact
We’re lucky that we have the technology to stay connected through the internet and telephones.
Make regular contact with friends and family and reach out to people you might not have spoken to in a while.
Ask for help
Tell others your personal and business challenges and don’t be afraid to ask for help.
From a business perspective, people outside our industry see things differently and can be a source of wonderful ideas to help you along the way.
Embrace the change
People talk about some of the positives from the crisis – such as reduced pollution. Focus on the good things which have emerged as a result of this period.
A positive mindset is a powerful weapon.
Doodling is a way of our unconscious mind telling us something. All you need is paper and pen. Hold onto a particular thought and let your mind go blank. Then just doodle.
Or doodle when listening to someone.
I often do this when on teams calls; it’s not because I’m not paying attention, it just helps concentrate my mind.
When doodling, don’t over think it. When finished, put your doodle to one side and return to it another time. When you return, you may be surprised by what you have done.
It will often make no sense and that doesn’t matter, but there are times when it might.
Mind the maps
Einstein is said to have thought in a stream of pictures and, being visual creatures, we all do this to a certain extent. Mind maps are therefore perfect to help solve challenges.
Mind maps work by writing your starting point, your initial thought, the challenge, or idea in the centre of a blank page.
Let your mind wander and simply write down any thoughts associated with this. This will then form branches and you can action, build on or discard your thoughts as you see fit.
We all need solutions, and solutions come from creative thinking. These are the concepts that are currently working for me.
Take some time and have some fun in finding out what works best for you.
Foundation restarts lending with residential and buy-to-let products
The lender is launching a new set of products in its buy-to-let and residential ranges, with loan to values (LTVs) of up to 75 per cent.
Foundation paused new lending in March as valuations could not be conducted, but said it had since been completing pipeline cases, with £37m lent in April.
“All cases remaining in the pipeline which have not received a mortgage offer have now been offered the option to switch to one of the new products, as the previously selected ones are no longer valid,” the lender told Specialist Lending Solutions.
Fixed-rate and discount products
The new buy-to-let deals are suitable for individuals and limited companies, include houses in multiple occupation (HMO) and are available as fixed-rate and discount products.
It has a standardised interest cover rate (ICR) of 145 per cent at either 5.5 per cent or pay rate, comes with a two per cent fee, and reverts to Bank Base Rate plus 4.99 per cent at the end of the deal term.
The fixed-rate products are available on the F1, F2 and F3 ranges.
Discount products, which have no early repayment charges (ERCs), are available for F1 and F2 borrowers with rates starting at 2.94 per cent for F1 borrowers at 60 per cent LTV.
The residential range offers two-year fixed and variable-rate products for F1, F2 and F3 borrowers.
Formal launch next week
Foundation Home Loans director of marketing Jeff Knight said: “Since lockdown was brought in, we have continued to lend by processing our existing pipeline, completing in the region of £37m of lending in April alone.
“However, once lockdown began, we took the strategic decision to only allow new applications once we knew it would be possible to instruct physical valuations again.
“Therefore, given announcements made this week, it is really pleasing to say that we can now offer our products to new applicants once again and will formally launch our full range on Monday.”
Greater home working will bring flexibility to clients and brokers – Knight
However, as we’re all aware, our personal and working lives have had to change radically in light of the Covid-19 outbreak, with many companies asking their workers to work remotely where possible.
For those not accustomed to working away from the office, this may have come as a culture shock – especially for those with young families – and we are all having to evolve and adapt where we can.
The internet is full of working from home tips.
Even as I opened this word document to write this article, I was prompted to check out some helpful ‘Top tips for working more securely from home’ – and in fairness, they were pretty useful.
While we all have to support our colleagues from a technology and mental health perspective, it’s often the case that people have to find their own way in terms of how they juggle their personal and working lives, not to mention where and when they can be at their most productive.
Many people have really embraced the concept, others may struggle, but to keep the wheels of commerce in motion we all have to do our bit.
Becoming more sociable
From a personal perspective, I have worked from home since the lockdown and the thought of returning to an office environment on a full-time basis is becoming less and less appealing as each day progresses.
During the lockdown, I have had more productive conversations with people than ever, and by conversations, I mean picking up the phone or video calls to quickly catch up with people rather than lazily sending out emails or wasting time scheduling meetings.
In the world of social distancing, it seems like more of us are finding different ways to actually become more sociable and this is also the case when it comes to successfully managing colleague and client relationships.
I have been able to have regular contact with my team and colleagues very easily due to the available technology and I have found working from home (WFH) to be highly effective.
Maybe this is because everyone is in the same boat and it has certainly formed a ‘we’re in this together’ bond to make the most of, let’s face it, a frightening situation.
And, once we get through this, I believe there may be a shift in how companies operate, how people work and where they work, including the integration of more WFH days in the new future.
I believe this additional flexibility, will also help the intermediary market.
Brokers often have to work into the evening to enable face-to-face meetings with their clients due to their work commitments.
However, perhaps if more people are utilising the WFH option, then this will offer brokers more flexibility in terms of dealing with clients during the day, while utilising the new communications world.
Brokers can liaise with a couple at the same time in different locations, so no more waiting for one partner to arrive, and files can be shared on the screen if required.
So, let’s continue exploring the WFH movement.
It’s more effective, it helps the environment and it will give brokers more flexibility to do their jobs, what’s not to like?
Foundation halts lending and furloughs staff
All pre-offer applications with the lender have also been put on hold.
Some staff are to be furloughed in April, during which time advisers’ normal contacts may not be available.
Brokers have been asked to contact Foundation’s central helpline if they need assistance.
The suspension of new lending is a temporary measure, according to Hans Geberbauer, chief executive of Foundation Home Loans.
He said the move allows the group to focus on supporting existing borrowers, including arranging payment holidays.
And that during this time, Foundation can re-evaluate its product offering within the current environment.
Geberbauer added: “These decisions have not been taken lightly but we believe they are necessary; we will be doing all we can to assist both our staff and all our intermediary partners during these challenging times.”
It comes as many specialist lenders make changes to their offering amid the coronavirus pandemic.
TML has paused residential applications, while Fleet and Landbay have limited products to 60 per cent LTV.
Kensington has limited applications to 70 per cent LTV.