IMLA Annual Dinner 2020 cancelled
The next annual dinner will now be held on 16 September 2021 at the Marriott Grosvenor Square hotel in London.
The event was originally delayed until 17 November 2020 as organisers hoped the situation across the country would ease enough to allow the event to continue safely.
However, this has not yet been possible and so the difficult decision to cancel it until next year has been taken to ensure the health and safety of all guests, sponsors and table hosts, suppliers and colleagues.
IMLA chairwoman Louisa Sedgwick said she and the leadership team were disappointed to have to make the decision, but thanked everyone for their patience and understanding.
“It’s disappointing not to be able to share an IMLA evening with our industry colleagues in 2020, however while it was a difficult decision to make, we are very mindful of everyone’s health and safety,” she said.
“We look forward to enjoying a great evening in September 2021.”
‘Many developments allowed that should be declined; weakening planning rules will make this worse’ – Star Letter 03/07/20
The first was a comment to the article: IMLA welcomes planning changes but urges Help to Buy extension
Arron Bardoe said: “I am very concerned about changes to the planning system, which exists not to thwart developers but to ensure good quality and sustainable development.
“As it stands, there are still many developments allowed which should be declined, so a weakening of the rules will make this worse.”
Bardoe added: “If there is to be changes, it should be away from the South East and London, which is already over developed; and pushed into areas where councils and communities are desperate for construction. This would also to stop the London–centric economy and push the UK prosperity to the whole of the nation.
“Doing away with the rules will create issues such as lack of parking – affecting existing residents; congested roads; oversubscribed GP surgeries and schools; no provision for amenity space – gardens and suchlike; poor public transport infrastructure; and a disregard for sustainable building and heating methods.”
“The government should consult with councils to see which areas want development; and perhaps even reintroduce enterprise zones with tax breaks, especially in areas with high unemployment,” Bardoe added.
Equity release changes must be measured
In response to the article: FCA must act on ‘unacceptable poor quality’ equity release advice – Lynda Blackwell
Andy Wilson said: “The FCA report may well be a wakeup call to some advisers who do not engage with the advice process sufficiently well. However, the failings are hardly the smouldering cauldron of abhorrent service and advice this article makes out.
“I would suggest that for the vast majority of ethical advisers in this industry it is a chance to benchmark our own processes, information gathering, fact finding, appropriate advice and reporting to the client in clear unambiguous terms. And in doing so, improve our own standards and quality of advice even if we think we are already the best we can be.”
Wilson added: “Ultimately, the number of complaints about equity release is very low compared to other forms of lending.
“The Financial Ombudsman Service reported that over the 12 months to March 2020 there were just 38 complaints about equity release – and only two were upheld. Around one in five complaints over the last two years were about the advice given.
He said: “Admittedly, future complaints may well come from the families of planholders who have died – meaning their initial involvement must be encouraged, and reasons for non-engagement documented – but currently the volume of complaints is low.
“So, whilst failings are reported and need to be eradicated, we need a measured, positive, responsive and balanced approach rather than an FCA sledgehammer.”
Advisers should advise on all aspects of borrowing
Another comment was made in response to the article: ‘FCA equity release findings were disappointing but not surprising’ – Marketwatch
Lisa said: “Too many equity release advisers only advise on equity release as such they simply don’t have the tools and knowledge to be able to offer alternative solutions.
“All advisers should be able to advise on all aspects of borrowing to ensure the client receives holistic advice and is not railroaded down just one advice track.”
IMLA welcomes planning changes but urges Help to Buy extension
The prime minister this week announced that it will become easier to change empty commercial properties into new homes, as part of plans to help build more houses.
Property owners will also be able to build additional space above their properties with a fast track approval process.
Kate Davies, executive director of IMLA (pictured), said: “A strong and active housing market will be hugely important in getting the UK economy back to strength in the wake of the coronavirus crisis.
“IMLA therefore welcomes these latest changes to planning regulations from the government. There is a shortage of suitable housing in this country to meet the demand and varied needs of our population.
“These new measures will go some way to enabling better use of vacant properties and publicly-owned land in order to facilitate the development of more homes.
“Many commercial properties have been sitting vacant for years in areas where there is significant demand for housing, and it’s likely the number of vacant commercial offices will increase in the wake of the crisis, with more businesses working remotely or needing smaller spaces.
“It’s quite right that landlords and developers should be able to adapt these properties into homes, provided this is done responsibly and in a way which ensures quality and sustainability.”
IMLA has said the government should consider extending the Help to Buy scheme to further support the mortgage and housing market and get it “firing at full capacity”.
Davies said: “The Help-to-Buy equity loan scheme is currently due to be changed in 2021 and phased out completely in 2023.
“An extension of the current scheme would prove helpful to developers and buyers, who will be playing ‘catch up’ after the delays caused by the pandemic and lockdown.
“Covid-19 quite rightly needs to be the government’s priority at the moment, but when the dust settles the spotlight will need to be firmly on working together with industry to build a long-term housing strategy.”
Lenders making ‘responsible decisions’ by withdrawing from high LTVs – IMLA
The trade body noted regulation could also be restricting lender activity, but added there was willingness to return to high LTV lending and the demand was a positive sign.
Last week Mortgage Solutions revealed the number of deals at 90 per cent LTV almost halved overnight as several lenders stepped back from the sector.
Brokers said they understood lenders wanted to protect service levels with staff limitations, but feared that a lack of mortgage availability could lead to a self-inflicted house price fall.
IMLA executive director Kate Davies (pictured) noted that as lockdown measures had started to ease and the housing market reopened, several lenders had taken steps back into 90 per cent LTV lending.
“However, it has since become clear that there is a particularly high level of demand in the market for high LTV mortgages, which has led some lenders to temporarily withdraw their products,” she said.
“These are responsible decisions which reflect lenders’ commitments to supporting their existing customers and ensuring service levels are unaffected by a surge in application volumes.
“Providers are also limited by regulation on the amount of higher LTV lending they are able to conduct.
“However, lenders will be eager to return to this area of the market when service levels allow.
“Lending at 90 per cent and above is vital for first-time buyers and borrowers with smaller deposits, and the pent-up demand we are seeing is certainly a positive sign for the mortgage market as we emerge from this crisis,” she added.
Around 2.7m young people kept out of home ownership – IMLA
The government should relax restrictions on qualifying for a mortgage, which would allow first-time buyers to help lead the economic recovery out of the coronavirus, the trade body said.
Around 2.7m young households have been frozen out of ownership since the 2008 financial crisis, IMLA estimated.
Controls on the proportion of higher loan to income (LTI), and stress testing have created barriers to would-be buyers, it argued.
According to IMLA, there should be 500,000 first-time buyers a year in the UK – almost 150,000 more than the actual figure of 352,000 at the end of 2019.
The three per cent stressed rate that lenders must apply in the affordability calculation is “out of line with economic reality” now that long term government bond yields are well below one per cent, according to Kate Davies (pictured), executive director of IMLA.
She said: “The figures speak for themselves. Pre-crisis, the first-time buyer market was showing great signs of recovery since the financial crash in 2008, with a record high of £60bn lent to new homebuyers in 2019.
“And before the recent pandemic, this rise in new homeownership looked set to continue.
“There is clearly demand out there – and as life begins to return to some form of normal after Covid-19, we believe there is scope for new homebuyers to help lead economic recovery in the UK.
“It also seems likely that interest rates will continue to remain at a very low rate for some time. We would therefore encourage the government to review whether the existing regulatory restrictions remain fit for purpose in that environment.”
IMLA also called for the industry and government to work together to find a successful long-term replacement for the Help to Buy scheme, which is due to be restricted to first-time buyers from 2021 and ended completely in 2023.
More than 260,000 properties have been purchased using the scheme since its launch in April 2013.
IMLA dinner postponed to November
With the government extending its lockdown of the country for a further three weeks the decision has been made to give more time for the situation to ease.
The dinner, which was due to take place on Thursday 17 September, will now be held on Tuesday 17 November at the Marriott Hotel Grosvenor Square, London.
The organisers highlighted that the welfare and safety of all guests, sponsor and table hosts, suppliers and colleagues was the top priority and that this was the most appropriate course of action in the current climate.
IMLA chairwoman Louisa Sedgwick said: “While we all hope that the current lockdown restrictions will have been lifted by September, there are still many unknowns and given that we had the opportunity to secure a date a couple of months later, we felt this made sense.
“We look forward to meeting friends and colleagues in November, and to looking forward with confidence to a happier 2021.”
All table and sponsorship bookings will be carried forward to the new date.
West One Loans joins IMLA
The body now has 43 member banks, building societies and specialist lenders, with Legal & General Home Finance the last institution to join earlier this year.
Last week IMLA warned that non-bank lenders, who are highly active in the specialist lending sector, needed government support or were at risk of being unable to support forbearance schemes such as mortgage payment holidays.
It is one of a group of trade bodies to have proposed various solutions to the government and Bank of England to support non-bank funding as the capital markets have all but closed.
Working through this difficult time
West One Loans managing director for buy to let Andrew Ferguson (pictured) will represent the lender at IMLA’s executive committee meetings. He said the firm was very pleased to be joining the association.
“As new members of IMLA we look forward to working alongside the IMLA team, its members and partners through a very difficult time and into the years beyond,” he said.
“We are excited to share knowledge and expertise and are totally committed to supporting the mortgage intermediary market across our varied product range.”
IMLA executive director Kate Davies, said the body was pleased to be adding West One to its membership.
“These are certainly highly unusual times for the mortgage market in light of the disruption caused by coronavirus, but IMLA is continuing to grow and now represents 43 lenders from across the sector,” she said.
“From second charge mortgages to development finance and buy-to-let, West One Loans will bring a wealth of experience and knowledge to the association as our members work together through the current crisis and beyond.”
IMLA fears non-bank lenders will struggle with payment holidays without support
It added that these lenders could also be unable to continue lending in the short-term if they are not given alternative funding sources.
The non-bank specialist lending sector has been severely hit since the coronavirus outbreak started with several lenders forced to stop taking applications and processing those in its pipeline.
Earlier this week it was revealed that lender trade bodies, including IMLA, have been in discussions with government and the Bank of England (BoE) to find solutions for this situation, with three potential schemes proposed.
Yesterday Belmont Green, parent company of Vida Homeloans, said it believes proposals to offer alternative funding to non-bank lenders could see specialist mortgage lenders return to the market.
Level playing field
IMLA executive director Kate Davies told Mortgage Solutions that the sector needed the support that other financial services industries had.
“IMLA, along with other trade bodies, is asking for the Bank of England and HM Treasury to provide a level playing field for lenders by allowing non-bank specialist lenders access to the same funding measures that banks can use,” she said.
“It is asking for a term-funding scheme to be made available to non-bank specialist lenders and, additionally, a Forbearance Liquidity Funding Scheme which would enable non-bank specialist lenders to fund loans on which forbearance has been provided, in line with the government’s announcement to borrowers.”
‘Difficult to offer forbearance’
And she warned there were significant risks for lenders and borrowers if that support could not be found somewhere.
“While it is too early to say exactly what the implications could be if these lenders are not given access to measures such as these, unless they are able to access funds, they may find it very difficult to continue to lend in the short-term,” she said.
“That could leave thousands of borrowers, specifically the self-employed and those with complex circumstances, much poorer in terms of the choice of mortgages available to them.
“In some instances, it might also mean lenders find it more difficult to offer forbearance to existing customers who need help,” she added.
IMLA: Government housing target must be ‘more ambitious’
It urged government to be “more ambitious” with its housebuilding target of one million new homes being built over the five years of the current parliament session.
IMLA noted that with one million homes built over the previous five years and a total of 240,000 in 2018-19, it appeared the industry was already on course to break the target without government assistance.
Kate Davies, executive director of IMLA said the 11 March Budget was a chance for the Conservative government to step forward and fix the housing market which they have previously admitted is broken.
“We don’t just need more homes – we need the right size and design of well-built, energy-efficient homes, which are properly serviced by a well-planned infrastructure including roads, schools, hospitals and public transport networks.
“The pledge to build 200,000 houses a year is welcome – but the fact that that target has already been met over the last five years indicates that the government could be more ambitious.
“We need thorough analysis of what the UK’s housing needs are going to be over the next 20-30 years – and real leadership to deliver that,” she added.
Stamp duty and affordability
The lender trade body also called for a review of stamp duty tax take and its impact on transactions, arguing that a revamped structure could reduce current barriers to moving without significantly impacting tax revenues.
It also repeated its call for an overhaul of the affordability and stress testing rules, arguing that this had been a major factor in the decline in homeownership among younger people.
However, data from the Financial Conduct Authority (FCA) released last week showed that lenders were generally using higher loan to income limits to support richer borrowers at the expense of first-time buyers.
Other areas IMLA is urging the government to prioritise are:
The future of Help to Buy. The Help to Buy scheme phase out starts in 2021 and IMLA noted it is not yet clear what will replace it. The government has announced proposals for a First Homes scheme, which will rely heavily on local planning authorities and developers. Many questions remain about how it will be delivered in practice.
Supporting the Private Rented Sector. IMLA argued the private rented sector is a vital part of the housing market and that government must avoid any further regulatory or tax changes that could push landlords out.
Supporting the public rented sector. More social housing needs to be built in order to ‘re-balance’ the housing market. This needs to be part of the overall vision to achieve a sensible, balanced approach to housebuilding that appropriate housing is available to everyone, whatever their financial circumstances.
Brokers bullish on mortgage market outlook – IMLA
Brokers were also more upbeat around their own business prospects as the year closed, the data showed.
The positive sentiment coincided with an increase of case load volumes to 88 a year on average, just shy of the highs of 2018.
At the same time, more decisions in principle (DIPs) resulted in completion. More than half were converted to a full mortgage, up seven per cent from the previous quarter.
The conversation rate of DIP-accepts to full applications also grew to 85 per cent.
Overall, more than nine in 10 mortgage intermediaries were confident about the outlook for the mortgage industry heading into 2020.
It came as the general election in December helped dispel some of the political uncertainty that had shrouded the UK.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (pictured), said: “The last few years have certainly tested the resilience of the mortgage market.
“Amid significant political turbulence, intermediaries have faced the challenge of disintermediation, diminishing consumer confidence and uncertainty surrounding what may replace the Help to Buy scheme as it is gradually wound down.
“Despite that, they ended last year on a high with a significant proportion expressing their positivity towards the sector’s future and having helped many more onto and up the property ladder.”
Davies added: “It’s clear there will be challenges ahead in 2020.
“The FCA’s recent changes to execution-only sales and the punitive tax changes on buy-to-let landlords will continue to change the shape of the market.
“However, it would appear that the new government has helped to boost consumer confidence and IMLA has predicted gross mortgage lending will rise to £268bn this year, 1.4 per cent ahead of last year.”