Santander ups new business and PT rates; TSB pulls select five-year fixes – round-up
Residential purchase mortgages have seen rate increases of up to 0.5 per cent on mortgages up to 95 per cent loan to value (LTV).
Changes include the two-year fixed rate at 75 per cent loan to value (LTV) product, which now has a rate of 3.09 per cent up – a 0.5 per cent increase. This product has a £999 fee.
The rate on the five-year equivalent has risen by 0.4 per cent to 3.14 per cent.
At the same lending tier, a fee-free deal has been introduced with a rate of 3.39 per cent. The rate is fixed for five years.
At the other end of the scale, the fee-free five-year fixed rate at 95 per cent LTV has seen a rate increase of 0.15 per cent, up to 3.54 per cent.
The rates of Santander’s new-build products at 75 and 85 per cent LTV, fixed for either two or five years, have risen by up to 0.5 per cent. Help to Buy deals at 75 per cent LTV have risen by up to 0.45 per cent while large loan products, across both purchase and remortgage, have gone up by as much as 0.5 per cent.
Remortgages up to 90 per cent LTV have also seen rate increases and a fee-free, five-year fixed remortgage at 75 per cent LTV has been added with a rate of 3.44 per cent.
Buy-to-let purchase and remortgage products have had rate increases of up to 0.5 per cent, while both residential and buy-to-let product transfers have risen by up to 0.55 per cent.
The bank is also cutting the rate of its buy-to-let lifetime tracker by one per cent.
Elsewhere, Santander has pulled first-time buyer exclusive deals at 85 and 90 per cent LTV, and withdrawn remortgages at 90 per cent LTV with £999 fees.
TSB has also pulled five-year fixes for first-time buyers and home movers with a £995 fee for residential borrowers.
This change is effective from today.
Government should prioritise homebuying process improvements and leasehold reform – Rudolf
I think it would be fair to say that this was something of a hotchpotch of ideas, a number of which – let’s be frank – were not on the agenda until very recently. Hence, we have the idea of opening up Right to Buy for housing association tenants and the ‘Bricks for benefits’ idea for working people receiving housing benefit, aiming to allow them to choose whether to pay it to a landlord or a lender.
That is a very simplified version as we await further details, but alongside these was a commitment to review the mortgage market again, particularly to look at how to turn ‘Generation Rent into Generation Buy’.
As a number of people have already pointed out, this is hardly been an issue not fully explored in recent times, and indeed we might well argue that part of what stops many first-time buyers making their first move, is the thought of what it might cost, but also whether they will actually get to the point of completion, given the large number of fall-throughs, 30 per cent, that happen each and every year.
Which first-time buyer do you know that would be happy to put up to £1,500 on the line each time they tried to purchase knowing full well that 30 per cent of all transactions are aborted, and at a time when the level of housing supply available is at such low levels that even getting to the point of offer accepted can be a real struggle?
Improving the homebuying process and leasehold reform on cards too
You might conceivably argue that one way to get more people onto the ladder is to have a process which delivers greater levels of certainty and transparency to all concerned, and which gives all parties the very best chance of working through a transaction to its conclusion.
However, while the Prime Minister may not have explicitly mentioned this in his speech, we know that there is a significant push at Department for Levelling Up, Housing and Communities level for improving the process, the greater use of upfront information, and the like. We are expecting further progress here with a strategy plan hopefully to be published before Parliament’s summer recess, which will start from 21 July.
There was however one major Conveyancing Association (CA) workstream – leasehold reform – which was mentioned by the Prime Minister and we do appear to be getting the progress we have been seeking from the government in this area.
Back in January the CA was involved in a cross-industry letter to Michael Gove, urging him and his department to implement the measures which had already been announced that would improve the lives of many leaseholders. Measures such as legislation on Leasehold Reform, reasonable fees and timescales for administrative activities, and managed freehold.
It would appear we are to get that leasehold reform in, what we hope will be, the very near future. The Prime Minister talked about a reaffirmation of its commitment to end unfair leasehold terms ‘to give leaseholders better control over their homes and lives’.
Specifically, it said will help leaseholders buy their freeholds, with ‘discounts of up to 90 per cent for those trapped with egregious, escalating ground rents’. As we’re all acutely aware there has not been a great deal of fairness in the leasehold system for a long time and leaseholders have felt like second-class citizens, so these changes and measures can’t really come quickly enough, especially as they have cross-party support, are generally non-contentious and have been discussed for what seems like an age.
It is therefore positive to see leasehold reform highlighted again, backed by the government and with a hint of what might be to come, hopefully very soon. The fight and work will go on until we get the fairness leaseholders deserve.
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.”
Proportunity to launch zero deposit mortgage product
Proportunity said the product would service potential home buyers who were unable to meet the minimum five per cent deposit requirements of most mortgage lenders.
The announcement of the planned product was made at the launch of part of Proportunity’s crowdfunding campaign with Seedrs.
The lender said it wanted to help one million more people onto the property ladder by 2030.
Proportunity claimed its product would also fill the £4.4bn market gap that would be left when the government Help to Buy scheme closes for applications on 31 October this year.
The lender’s zero per cent deposit deal will be made available on any home, removing the restriction to new builds, and would be capped at £1m.
It will use AI technology to analyse millions of data points to see if a property is being purchased at or under its true market value.
Proportunity will also offer a mortgage booster loan which will offer up to £150,000 to customers purchasing viable properties.
Proportunity said the addition of a zero deposit mortgage product and the inclusion of the mortgage booster loan was its latest attempt to disrupt what it claimed was a “broken borrowing system”.
As well as the zero deposit product, Proportunity said it would be looking into a Rent to Buy offering.
The current crowdfunding campaign will be live until 30 June and the final investment will be announced in July 2022.
Vadim Toader (pictured), chief executive and co-founder of Proportunity said: “In today’s market, rising interest rates, an unaffordable mortgage, and cost of living crises are making the process of buying a home even more challenging. We are committed to becoming a trusted provider of home buying services for anyone struggling to buy the home they desire. The new products we are developing will enable buyers to overcome various barriers to homeownership. We’ve already financed over £100m of homes, helping over 260 people onto the property ladder, and we’re not slowing down anytime soon.”
Stefan Adrian Boronea, co-founder added: “With house prices in the UK increasing at such a pace, it’s more important than ever for home buyers to know which areas are currently most undervalued, so they are able to make sound and informed decisions – Proportunity can help them do that. Our Proportunity home index (PHI) enables customers to buy smarter – identifying undervalued homes and avoiding overpriced ones.”
Proportunity currently offers loans modelled on the Help to Buy scheme, interest rates vary between 5.99 per cent and 8.49 per cent, depending on circumstances and property type.
Mortgage advisers unite with view to lower barriers for first-time buyers
The group, working with Sesame Bankhall Group (SBG) and with contributions from the lenders Nationwide and Kensington, said the top three barriers facing today’s first-time buyers are raising a deposit, affordability pressures and a lack of suitable homes to buy.
Alex Beavis, proposition director – mortgages and later life, SBG, said: “Getting onto the housing ladder has always been difficult but this generation of first-time buyers is facing perhaps the toughest set of challenges yet. The end of Help to Buy, the spiraling cost-of-living, rapidly rising house prices and huge economic uncertainty have combined to create the perfect storm for a generation of aspiring homeowners.
“For a lot of young people out there, the idea of one day owning their own home has become a pipe dream. We need to work together to create positive change.”
The IPFA said in a statement that it was “imperative that we protect and increase the number of homes being built through the government’s affordable housing schemes, thereby maintaining choice for home-buyers seeking affordable solutions.”
It called for the establishment of an industry-wide campaign to raise awareness of Help to Buy alternatives, such as privately backed shared-equity schemes, and for those programs to be opened up to include people trying to buy homes other than new-builds.
Another suggestion was to tie equity release or retirement interest-only loans to a first-time buyer mortgage in a multi-generational scheme that could help buyers who can’t rely on the “bank of mom and dad” for their deposit. This would be a sort of rebranding of joint borrower sole proprietor loans combined with a push by mortgage advisers to raise awareness of such loans.
The group asked the industry, government and regulators to work together to consider different approaches to high loan to value (LTV) lending, such as split-term mortgages, as a way to help new buyers clear deposit and affordability hurdles. One example cited would see a 95 percent LTV offered for a 35-year term with the other five percent being a secured or unsecured loan over five years. After the first five years, the borrower would be able to remortgage onto a mainstream home loan, the IPFA suggested.
Finally, the group suggested exploring the idea of ‘low-start’ mortgages that combine capital and interest-only borrowing. Such loans could cover, it said, a 35-year mortgage term and reduce the portion on interest-only as the borrower’s earnings rose over time.
Stephanie Charman (pictured), head of strategic relationships, Sesame Bankhall Group, said that the problems facing first-time buyers were “complicated and varied, meaning we need fresh thinking.”
However, she added “to make that a reality, we need the buy-in from all stakeholders, including those from the advice industry, mortgage lenders, the government and regulators – and fast. This is simply too big a problem to tackle by any one party alone.”
Help to Buy application deadline ‘brought forward’
Homes England, which runs the Help to Buy Equity Loan scheme has confirmed the deadline to apply is 6pm on 31 October 2022.
While no formal or specific deadline had been set, many believed the application cut-off point would run until December 2022.
This would give applicants enough time to complete their purchase by the 31 March 2023 scheme closure date, based on statistics from house developers on how long the process takes between reservation and completion.
The Sunday Telegraph first reported the move to set an earlier-than-anticipated application deadline, adding that concerns were raised that the deadline had not been publicised.
A spokesperson for Homes England, told Mortgage Solutions’ sister publication YourMoney.com: “As the Help to Buy Equity Loan scheme draws to a close there are a number of key dates and deadlines in place, including the deadline for new applications. These dates have been agreed with government and are being communicated to key stakeholders.
“Homebuilders were informed about the deadline for new applications around the 17 May. The guidelines for applying for the Help to Buy Equity Loan on gov.uk were then updated on 20 May to clearly state the deadline for new applications. Help to Buy agents also updated their websites week commencing 16 May.
“When the scheme closes on the 31 March 2023 homebuyers must have legally completed on their home. The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase including finalising conveyancing etc.”
It is understood the new deadline will be communicated via social media channels in the coming weeks.
Help to Buy Equity Loan
The Help to Buy Equity Loan scheme was launched in April 2013. The latest version which was launched April 2021 is only open to first-time buyers. It allows them to buy a new-build property with a minimum of a five per cent deposit and to use an equity loan of up to 20 per cent of the purchase price, or 40 per cent in London. The loan is interest-free for the first five years.
There’s also a maximum property purchase price limit which varies depending on which region it’s in. In London, it’s capped at £600,000, while in the North East, it’s £186,100. Meanwhile in the South West it stands at £349,000.
Latest statistics from the Department for Levelling Up, Housing and Communities revealed that from 1 April 2013 to 31 December 2021, 355,634 properties were bought with an equity loan.
The total value of these equity loans stands at £22bn, while the total value of properties sold under the scheme stands at £99bn.
The Tipton partners with Even
Even’s proposition is modelled on the Help to Buy scheme, except it is only available on secondhand homes and there is no interest payable for the duration of the loan term.
Borrowers can now use an Even loan to boost their deposit then go to The Tipton for a first charge mortgage.
Even offers loans worth up to double that of a borrower’s deposit, up to a maximum of £100,000. It holds a share in the property it has offered a loan against at the point of repayment, and the value of this increases and decreases depending on price fluctuation.
There is a profit cap on Even’s share in a home.
James Turford, co-founder and COO of Even said: “Even is built for the 50 per cent of aspiring first-time buyers who don’t have access to the Bank of Mum and Dad. We’re thrilled to be partnering with Tipton, our first building society, and are impressed with how quickly they’ve moved to support our innovative product.
“We’re looking forward to offering more options for people to get into their first homes.”
Jason Newsway, sales and marketing director of The Tipton, said: “At the Tipton we’ve been enabling people to own their own home at all stages of life for 120 years, and we’re proud to be partnering with Even team to offer this innovative solution to our broker partners, helping the next generation of homebuyers onto the property ladder.”
Newcastle BS expands Deposit Unlock range
The mutual will now offer three-year fixes at 95 per cent loan to value (LTV) with a rate of 3.17 per cent for the £999 fee paying option, and 3.57 per cent with no fee.
Newcastle Building Society was the first lender to offer products through the Deposit Unlock scheme, a mortgage indemnity scheme developed and launched in partnership with the Home Builders Federation and insurance brokers Gallagher Re.
This was to help bring high LTV lending back to new-build properties.
It was initially only available on a few new-build plots through a small number of builders, and has now increased to 19 developers with sites across the UK.
Some 70 per cent of applications to the mutual under the scheme have been made by first-time buyers at the maximum LTV of 95 per cent.
Newcastle BS has also completed on almost half of the purchases made through the First Homes scheme, which was also launched last year as an initiative to provide homes for first-time buyers at a minimum discount of 30 per cent.
Stuart Miller (pictured), chief customer officer at Newcastle Building Society said: “I’m delighted that we have been able to help people achieve their dreams of home ownership through Deposit Unlock – that’s thanks to the hard work of everyone involved in the scheme, not least our intermediary partners.
“It’s even more rewarding to know that it’s first-time buyers, particularly, who are benefiting from the scheme and shows how this product innovation is making a real difference.”
He added: “The cost-of-living squeeze makes it even harder for first-time buyers and low deposit borrowers to get on and up the property ladder, demonstrating the importance of collaborative innovation in the mortgage industry. As the leading provider of both Deposit Unlock and First Homes mortgages, we’re seeing consistent interest in both schemes.
“That’s even before Help to Buy comes to an end next year, at which point these initiatives will become even more critical for first-time buyers in an already challenging market.”
TMA Club adds Even to panel
Even’s proposition has been modelled on the Help to Buy scheme and offers borrowers a loan to boost their deposit. It can give loans up to double a borrower’s deposit at a maximum of £100,000.
The loan is interest-free for the entire duration and there are no early repayment charges.
The value of Even’s share in the property increases and decreases depending on how this changes.
There is a cap on how much profit Even can make from its share and the homeowner keeps all increases in value from structural renovations.
Lisa Martin, development director at TMA, said: “Recently, the private sector has had to find creative solutions for those seeking support with their homeownership ambitions.
“Even brings a new and innovative product to the market, and this latest partnership will allow us to continue providing our members with a wide range of products to suit each client’s needs.”
Ben Bailey (pictured), CCO at Even, added: “Even bridges the gap for aspiring first-time buyers who just can’t save enough to get on the property ladder.
“We’re excited to be joining TMA, one of the UK’s leading mortgage clubs, and we can’t wait to help its members help more first-time buyers.”
Platform raises resi and BTL rates
For new residential customers, two-year fixes have risen by up to 0.16 per cent and now begin from 2.7 per cent for a product at 60 per cent loan to value (LTV) with a £1,499 fee.
Elsewhere, three and five-year fixes at 60 to 90 per cent LTV have gone up by up to 0.17 per cent while at 95 per cent LTV, three and five-year fixes have reduced by 0.04 per cent.
At 95 per cent LTV, the three-year fixed rate with a £1,499 fee is now 3.16 per cent while the five-year equivalent is 3.17 per cent.
Across its professional mortgage range, two and five-year fixed rates have gone up by as much as 0.15 per cent.
Its two and five-year buy-to-let products have risen by up to 0.16 per cent, as have the two-year fixed premier options. Equivalent rate increases have been made to buy-to-let customers making product switches.
Help to Buy mortgages fixed for two and five-years have risen by as much as 0.20 per cent. Equivalent rate hikes have been made to product switching borrowers.
For those switching rates across Platform’s mainstream residential range, rates have increased by up to 0.12 per cent across two, three and five-year fixes.
Changes apply from 17 May.