HSBC and Nationwide increase variable rates – round-up
HSBC has increased its residential standard variable rate (SVR) from 4.04 per cent to 4.29 per cent.
Any borrowers who currently on HSBC’s residential SVR will be notified of changes to their payments in writing.
There are no changes to HSBC’s buy to let (BTL) SVRs or any of its other products.
Nationwide said it had increased its base mortgage rate (BMR) from 2.75 per cent to three per cent and its standard mortgage rate (SMR) will be increased from 4.24 per cent to 4.49 per cent.
From 1 August 2022, Nationwide will be increasing tracker mortgage interest rates to reflect the Bank of England’s base rate change.
Nationwide confirmed that tracker mortgages reserved between 1 December 2004 and 16 February 2009 will not be affected by the rate rise, because their tracker floor is higher than the base rate.
LendInvest platform assets under management rise over a third to £2.1bn
According to LendInvest’s full-year results to 31 March 2022, its buy-to-let platform assets under management, which it defines as the amount of money customers have borrowed from, grew by 67 per cent to £1.5bn year-on-year.
The lender said that demand for buy-to-let products remained strong and grew further following the launch of its seven-year fixed rate and green mortgage products.
Its seven-year fixes accounted for 27 per cent of buy-to-let completions in Q1 2022.
For short-term lending, its platform assets under management fell from £678m in the same period last year, to £646m this year. This decline was attributed to a “buoyant property market” where borrowers completed projects and sold assets quickly.
LendInvest’s overall profit before tax grew by 190 per cent to £14.2m, nearly triple its prior year figure. The firm said this was due to the completion of its third securitisation and transfer of £100m portfolio of buy-to-let assets to JP Morgan.
From a funding perspective, the company said it had entered a £150m financial partnership with HSBC and Barclays to fund short-term bridging loans, with a focus on retrofitting and renovating ageing housing stock.
LendInvest added it had extended its separate account mandate with JP Morgan and secured £500m financial partnerships with Citi and National Australia Bank. It also closed a third residential mortgage-backed securitisation deal worth £280m.
The lender added that it had onboarded 510 brokers to the platform with a signed application.
LendInvest’s chief executive Rod Lockhart (pictured) said this had been a “landmark year” for the firm, as it had delivered its “most profitable set of results to date”.
He added that it had listed on the Alternative Investment Market to support its growth ambitions.
Lockhart said: “Our performance is testament to the attractiveness of our model, demonstrated by our ability to attract significant capital from our investors and the strong demand from borrowers for our innovative offering and stand-out customer service.
“We remain at the forefront of the digital transformation of one of the last verticals of financial services yet to be disrupted by technology. While we are mindful of the uncertain economic environment, we are very excited about the significant opportunities ahead.”
Lockhart said the war in Ukraine had created “global uncertainty and macro headwinds”, pointing to high inflation and rising interest rates.
However, he said the property market continued to be strong with 9.7 per cent annual house price growth over the 12 months to March 2022, and whilst that was expected to slow down it was not a “material concern” as the lender’s book has a lower loan to value.
Lockhart said: “The rising interest rate environment and volatility in interest rate swaps has been challenging, particularly for pricing our buy-to-let products. Our strategy has been to pass on the rising costs with higher borrowing rates, as well as offering longer-term fixed rate products that have been hugely popular.”
He added that the diversity of its type of funders and its lending product range was one of its “key strengths”, and along with the agility of its platform, it could adapt its product mix, launch new products and adjust its risk appetite in-line with market conditions.
“The combination of these factors provides for a resilient business model and one that gives us confidence in meeting market expectations,” Lockhart concluded.
DIFF: Internal communication on neurodiversity vital for ‘journey of acceptance’
Speaking on a panel at the Diversity and Inclusivity Finance Forum (DIFF) executive briefing, Ali Crossley, managing director of distribution for Legal & General Retail, said that as part of its reverse mentoring scheme the executive team had partnered with neurodivergent people and other sub-groups to see things from a different perspective.
She said that during the scheme, the executive team found that the work environment was vital for neurodivergent people to succeed, and they could bring a huge amount to an organisation.
Crossley cited an example of a younger female employee with autism who, through the partnership, told the chief executive that people being able to approach her from behind when she was at her desk and the open plan layout of the office made her anxious and stressed.
This had been “game changing” for the chief executive who said he had not been, and would not have been aware, of these kinds of issues neurodivergent employees faced.
The employee now has a desk that has some screens with her back to the wall, so she feels more comfortable, Crossley added.
Crossley said that L&G was “proactively recruiting” neurodivergent people as they had “fantastic” skills around creativity and data analysis, for example. She added that it was rolling outs its reverse mentoring programme to the whole organisation.
Internal communications and case studies good tools
Crossley said that raising awareness was crucial and having internal communications and talking openly were good steppingstones. She pointed to a neurodiversity panel the firm had last week internally which had 100 people dialling in.
She added that case studies of people were good to celebrate difference, noting that it had done so for a few employees who work in data analysis and are on the spectrum, but the label should be secondary.
“We mentioned it because it’s important to bring people on a journey of acceptance and embracing difference. We’re basically saying how brilliant is this person at this kind of job and we need to recruit more [people like them].”
She concluded: “We need diversity of thinking, we need really healthy challenge and debates. Internally, we need to be able to storm and then form within business environments in order to get better business outcomes.”
Barbara Schonhofer, founder of Group for Autism, Insurance, Investment and Neurodiversity (Gain), added that communicating shared experiences and what people could do to help each other was a great starting point for neurodivergent employees and people who supported them.
She added that Gain offered a “diagnostic tool” to help organisations evaluate how friendly or welcoming their company is to neurodivergent employees.
She said that this would allow companies to track their progress and how effective reasonable adjustments or interventions are.
Schonhofer added that supporting employees whose family or friends were neurodivergent was also important.
She said: “The first thing [is that] this is hard. It is not an easy journey, mainly because people are just discovering that they are neurodivergent.
“The biggest thing that we’re finding is building community. What we are looking to do is to have a membership model where we have corporate members, individual members, partners, and then we have the research piece, but looking at building the community of members [is crucial].”
She said that awareness was rising and that more people were saying that they identified with neurodivergent characteristics, even if they had not been officially diagnosed with them.
‘Open conversations’ with employers crucial
Tracie Burton, senior corporate account manager at HSBC, said that she had only told her employer about her dyslexia in the last two years and said she wished she had done so earlier as it would have “made life a lot easier for myself”.
“I did have to spend a lot of extra time at the weekends and evenings doing work, because I was too ashamed to talk openly and honestly to my employers throughout my earlier career about it.”
She explained that she would have to take longer to reread emails, text messages and that there would sometimes be errors in her messages.
However, Burton said that she had talked with her current manager, and it was a “simple conversation” and that it had vastly improved her work life.
“I think honesty and openness from the employee, as well, as well as the business leader, or the firm or company, is important and don’t be ashamed of it.”
Five key takeways
- Open and honest conversations between employees and employers about neurodiversity and your experience is very helpful so support can be offered
- Internal communications and case studies of neurodivergent employees are good to raise awareness
- Neurodivergent employees may need more support in terms of work environment, have open conversations about reasonable adjustments
- It’s about ability not labels and what they can bring to organisation
- Supporting employees whose family members or friends are neurodivergent is also important
Links to key organisations
Lenders react to base rate change
Yesterday, the Monetary Policy Committee (MPC) decided to increase the base rate from one per cent to 1.25 per cent as a means to curb inflation. Many lenders responded to the announcement by raising rates.
Nationwide will increase rates on its trackers products to reflect the base rate from 1 August.
It said it was “working through” what the change means for its variable reversion rates, Base Mortgage Rate and Standard Mortgage Rate, noting that it previously rose both to reflect the BoE’s May decision. At the time, these went up by 0.25 per cent each to three per cent and 4.49 per cent respectively.
HSBC’s tracker mortgages will see rate rises to reflect the 1.25 per cent base rate. Its residential and buy-to-let standard variable rates (SVRs) will remain unchanged.
Earlier this week and ahead of the rate rise, HSBC increased a number of two, three and five-year fixes between 60 and 95 per cent loan to value (LTV) for new and existing residential and buy-to-let borrowers.
All Santander’s tracker mortgages linked to the base rate will rise by 0.25 per cent from the beginning of July. The bank’s follow-on rate will increase to 4.5 per cent.
Mortgage products linked to the base rate issued by its subsidiary Alliance and Leicester will also see a 0.25 per cent uplift which will come into effect in the beginning of August.
Both brand’s SVRs will rise to 5.49 per cent from August.
Skipton Building Society has decided not to increase its SVR or mortgage variable rate. Despite the base rate rising by one per cent over time, the mutual has only increased its variable rates by 0.25 per cent since.
A Skipton Building Society spokeswoman said: “For our borrowers, the society will not be increasing its MVR or SVR, meaning for the bulk of mortgage customers – those not on base rate tracker linked products – there will be no increases to their payments as a direct result of today’s bank base rate announcement.”
The mutual will also withdraw its base rate-linked tracker products on 19 June, to replace them with repriced alternatives on 20 June to reflect the rate change.
Leeds Building Society made the decision to hold its SVR, which is currently 5.54 per cent for standard mortgages and 5.84 per cent for buy-to-let products.
Richard Fearon, chief executive at Leeds Building Society, said: “We work hard to balance the needs of our membership as a whole, whether savers or borrowers. So to support our borrowers, we’ve again agreed not to increase our standard variable rate following today’s MPC announcement.”
For Aldermore borrowers with mortgages linked to the base rate, pricing will rise by 0.25 per cent from 1 July for existing borrowers and 21 June for new business.
Its SVR, otherwise known as the Aldermore Managed Rate, will increase to 5.73 per cent from 1 July for existing customers and from 23 June for new borrowers.
Legal and General Mortgage Club Awards 2022 – in pictures
Attendees were so pleased to be back at this stand-out venue, with Comedian Tom Allen providing the entertainment.
Find a list of all the winners here. Congratulations to all.
Top 10 most read mortgage broker stories this week – 10/06/2022
Halifax’s latest house price report pegging annual growth at 10 per cent and indicating a slowdown, as well as analyses around the buy-to-let market and four-day working weeks also piqued readers’ interest.
Boris Johnson to extend Right to Buy and allow housing benefit for mortgage payments – reports
Johnson launches mortgage market review and confirms Right to Buy extension and benefit changes
Specialist lenders and building societies are shaking up the BTL market – Armstrong
Lenders should improve withdrawal process and work with brokers – Simpson
Buy-to-let market may be shifting, but it isn’t broken, say brokers
HSBC confirms agenda for emerging talent event
Openwork announces senior management shake up
Annual property price growth over 10 per cent but signs of market slowdown – Halifax
How a four-day week for busy mortgage advisers with no downsides might work
Mortgage activity falls in Q1 but market expected to ‘remain relatively robust’ – UK Finance
Major UK banks can fail safely due to ‘robust resolution regime’ – BoE
According to an assessment by the Bank of England (BoE), which is the first undertaken, if a bank were to require resolution customers would still be able to access their accounts and business services as normal.
Additionally, shareholders and investors rather than taxpayers would be the first to bear the bank’s losses and costs of recapitalisation.
The banks involved in the assessment were Barclays, HSBC, Lloyds Banking Group, Nationwide, Natwest, Santander UK, Standard Chartered and Virgin Money UK.
Resolution is a way to manage the failure of a bank, building society or other financial entity to minimise the impact on customers, the financial system, and public finances. The BoE is the UK’s resolution authority.
During the financial crisis the UK did not have a regime to resolve banks without the use of public money, which meant the options were to let banks fail or bail them out with taxpayers’ money.
The BoE said that a “robust resolution regime” was in place following extensive work by UK banks and there were more choices if banks encountered “serious problems”.
Actions taken across the sector include holding more loss absorbing capacity, improving ability to monitor liquidity needs and use liquid resources throughout resolution; ‘resolution-proofing’ contracts and critical service arrangements; changes to group structure; better ability to plan at speed for “further restructuring changes to return the firm to long term viability”; and improved communication planning with the public.
However, it said that resolution was a “spectrum” and that it would always “likely to be complex to execute” so maintaining an “credible and effect resolution regime” was a “continuous process”.
Dave Ramsden, deputy governor for markets and banking at the BoE, said: “The Resolvability Assessment Framework is a core part of the UK’s response to the global financial crisis, and demonstrates how the UK has overcome the problem of ‘too big to fail’.
“The UK authorities have developed a resolution regime that successfully reduces risks to depositors and the financial system and better protects the UK’s public funds. Safely resolving a large bank will always be a complex challenge so it’s important that both we and the major banks continue to prioritise work on this issue.”
In its assessment the BoE evaluated banks on three themes: adequate financial resources, continuity and restructuring, and coordination and communication.
Shortcomings were identified in three firms, which the BoE said, “may complicate unnecessarily the Bank’s ability to undertake a resolution”. The firms were HSBC, Lloyds Banking Group and Standard Chartered.
HSBC’s shortcomings were around the production of resolution specific liquidity analysis and its plans to execute the restructuring actions in scenarios with a multiple point of entry bail-in.
Lloyds Banking Group and Standard Chartered also had shortcomings around production of resolution specific liquidity analysis, whilst for Standard Chartered the BoE identified issues around “identification and evaluation of all available restructuring options in a wide range of resolution scenarios”.
This relates to a bank’s availability of liquidity to support itself through a resolution.
The BoE has also identified “areas for further enhancement” for six firms, which are specific areas where continued work is needed to “enhance or embed capabilities in order to further reduce execution risks associated with resolution”.
The six firms were Barclays, HSBC, Nationwide Building Society, Natwest, Standard Chartered and Virgin Money UK.
The BoE said that it would repeat its assessment in 2024 and then every two years after that.
Lendco completes £384m buy-to-let securitisation
The deal refinances loans secured on residential properties in England and Wales held in a warehouse facility.
The lender said that it received “excess demand” from the EU and the UK despite “volatile market conditions”.
Lendco completed its inaugural securitisation last year, which was a securitisation of buy-to-let mortgages and raised £314m.
The company was launched in 2018 as a joint venture between brokerage SPF Private Clients and private equity firm Cabot Square Capital.
It offers buy-to-let mortgages and bridging loans and has passed £1bn of total loan origination since its founding.
Simon Knight (pictured), managing director of Lendco, says: “We are delighted to have completed this second securitisation which secures funding for an additional four years and reflects continued investor confidence in Lendco’s platform.”
“This second securitisation is further evidence of our intention to be a sustained and programmatic issuer in the capital markets.”
The transaction was co-arranged by HSBC and BNP Paribas. The Joint lead managers were HSBC, BNP Paribas and Natwest Markets.
HSBC confirms agenda for emerging talent event
The event, which will be held at the Savoy Theatre in London on 13 June, aims to acknowledge the rising-star brokers in the mortgage industry.
Talks during the day include a mortgage market update from Richard Beardshaw (pictured), head of sales for intermediary mortgages at HSBC UK, and an economic update from Liz Martins, director for research economics at HSBC UK. Rupi Hunjan, chief executive of Censeo Financial, will talk about the social housing sector.
SimplyBiz’s chief executive Martin Reynolds will discuss social mobility, whilst managing director of Coreco Andrew Montlake will examine diversity and inclusion in the industry.
Michaela Wright, head of corporate sustainability at HSBC UK, is set to highlight sustainability and environmental, social, and governance principles, and Michelle Andrews, head of buying a home at HSBC UK will talk about her journey in the mortgage industry.
Career progression and development will be the focus of Dom Scott, managing director of Alexander Hall and Chris Pearson, head of intermediary mortgages at HSBC UK’s presentations.
Reynolds said: “This initiative from HSBC is a very progressive step and one that is unique in the market. It is an excellent idea, and I am really pleased to see such positive interaction between lender and intermediary.
“Attracting and training new advisers has its challenges at present and this type of support helps to showcase the new talent and hopefully inspires others to want to work in our great industry. I am also delighted that one of our members has been chosen to attend and I am sure they will find the event well worth it.”
Montlake said: “I am delighted to be involved with this fantastic event. It is a really great idea to focus on some of the diverse and exciting emerging talent that is coming into the industry.
“These are the future leaders of the industry, and not only will we have an opportunity to give them some insight, more importantly it will be a chance for them to teach us about the future needs and aspirations of the next generation. HSBC have really shown what a forward thinking company they are with this initiative.”
Sarah Tucker, founder and managing director of The Mortgage Mum said that this was a “fantastic and refreshing initiative” from the bank.
She said: “Emerging new talent needs to be a huge focus point for the future of our industry. After all, these are our future chief executives and leaders, and their interest and passion for their role needs to be nurtured from the very beginning.
“Our industry has previously been seen as stuffy, and the recent Association of Mortgage Intermediary report showed a real need for changes to be made at management level. We believe this starts with attracting new talent into the industry, and I am thrilled to see more and more people of all ages, gender and nationality entering the sector.”
Tucker added that she was delighted one of their brokers Gemma, had been selected as one of the rising broker stars.
The Nottingham hires BDM while Miller refocuses on London
Former Coventry Building Society BDM, Richard Goodman, has joined The Nottingham to support brokers in its East Midlands region.
He takes the reins from BDM Amanda Miller, who has moved to help advisers in the London area.
Goodman, who also previously worked for HSBC, Lloyds Group and RBS, said: “I’m thrilled to be here and looking forward to building and growing great working relationships with brokers across the East Midlands. It’s a challenge that really appeals to me.
“I’ve always stuck by a principle of doing the right thing by people and it is clear to me that The Nottingham shares that ethos.”
Miller has worked for over 20 years at the lender, allowing her to hit the ground running in London.
She said: “It’s an exciting challenge. Hopefully my knowledge and expertise will play a key role in supporting London brokers and informing them about our products.”
The society has recently made several additions to its products and services including introducing soft searches at DIP, product transfers via brokers and criteria enhancements to support buy-to-let and limited company BTL lending.
The Nottingham’s national sales manager, Deborah Reeves, added: “We look forward to seeing Richard play a key role in supporting brokers across the East Midlands, as we are sure Amanda will in London too.”