Mortgage Climate Action Group to hold first event

Mortgage Climate Action Group to hold first event

This will be open to attendees from across the sector. 

MCAG launched in April this year to act as a source of support and information for mortgage intermediaries, to help them understand and discuss green issues. 

It was founded by Legal and General, Sesame Bankhall Group and SimplyBiz Mortgages. Since, Home Loan Partnership, Mortgage Intelligence, PRIMIS, Openwork and Paradigm have also joined the collective. 

The virtual event will be an hour long and outline the aims of MCAG, its purpose and how the green agenda affects lenders and advisers. 

There will be presentations from Esther Dijkstra, managing director of intermediaries at Lloyds Banking Group, and Chris Pearson, HSBC’s head of intermediary mortgages. 

Richard Merrett, head of strategic development at SimplyBiz Mortgages, said: “The real strength of the Mortgage Climate Action Group lies in collaboration, which is why it is so important to keep the sector updated on our purpose, and our work so far.” 

He said one of the group’s primary objectives was to give advisers a voice on green issues and policy. 

He added: “Whilst this event won’t give delegates all the answers in terms of this significant, and evolving area, we believe it will be a good starting point for this vital, industry-wide conversation.” 

Michele Golunska, CEO, Sesame Bankhall Group, added: “I was delighted to give the full support of Sesame Bankhall Group to this incredibly important initiative. I have always been passionately committed to shaping a more sustainable and conscientious industry. The Mortgage Climate Action Group is quickly establishing itself as an effective forum for bringing all industry stakeholders together to debate the key issues and develop new initiatives that will help to address the challenges ahead.” 

Kevin Roberts, managing director of mortgage services at Legal and General, said the group was there to be a voice and listen, but also to emphasise the need to take action so change could be made. 

How we can strive for a more diverse and inclusive industry for all – Roberts

How we can strive for a more diverse and inclusive industry for all – Roberts

 

We’ve taken strides to encourage more diversity in our mortgage market in recent years, but a recent report by the Association of Mortgage Intermediaries (AMI) has made it clear that there is still much we need to do to make our sector a more welcoming space that provides opportunity for everyone.

The report found that 43 per cent of AMI’s members agreed the mortgage industry attracts a workforce that is representative of our communities. In addition, 54 per cent of women and 52 per cent of ethnic minorities thought that people like them were not well represented at all levels.

It’s a tough pill to swallow, but I believe this report presents an opportunity for us to listen to our colleagues and take an active role in making a difference.

 

Understanding our unconscious biases

Still, today, when I look around the floor at industry events, I see a sector dominated by ‘Type 1’ males – that is middle-aged, white men – myself included.

Our first step in the journey towards a more diverse sector is to recognise our unconscious biases. We have all worked hard to reach where we are in this industry, but many of us have had every opportunity to do so – and these are opportunities that many others simply will not have had. If we are to make the industry more accessible, we need to start by understanding the advantages that we have had, particularly Type 1 males, and recognise the privilege and bias that we have enjoyed.

One way we can do this is by participating in a behavioural bias assessment, which can uncover any unconscious biases and issues that exist within ourselves. From the top down, across our industry – from brokers to lenders to surveyors – we should all consider these assessments as we begin our path to a more diverse and inclusive mortgage market.

 

Agents of change

Yet, as an industry we also have a responsibility to engineer change and ensure that the opportunities in our sector are open to everyone, regardless of their gender, race, or creed.

This means acting as allies and advocates for those who may need a platform that they can rely on to support them. It means identifying those trailblazers in the sector from a range of different backgrounds and giving them the opportunities to inspire others to consider a career in the mortgage market.

I speak to many people who are supportive yet passive in how they approach this topic. They’re passive in the sense that they do not challenge inappropriate behaviours when they see them or do not speak up out of fear of “saying the wrong thing”.

For me, it is important that we walk towards this topic rather than avoid it. I too am often concerned about using a label or phrase that might cause offence. However, we must use these opportunities to learn and better ourselves, rather than say nothing at all.

 

Inclusivity in everything we do

Being inclusive is a positive word and a natural position for most of us to take.

Encouraging people to bring all of themselves to work is a good way to put this into practice.  If your people are leaving a part of themselves at the door, will they really give you their all and drive your business forward?

Whether it’s a recognised characteristic or just simply being a mum, a carer or someone who needs some temporary extra support, we must be inclusive across all strands of our businesses. The pandemic has shone a light on the importance of mental health, and we should be receptive to the challenges many go through – often in silence.

Starting with what you have in place is important, and then building on this by adopting an inclusive approach to recruitment is particularly critical. Whether we are recruiting ourselves or using third party organisations, we should consider as diverse a pool of candidates as possible.

Remember – a diverse business isn’t just the right thing to do, it makes business sense too. Research by McKinsey shows that companies with the greatest gender diversity on executive teams, for example, were 25 per cent more likely to have higher profits than others.

By taking these steps and being advocates of change within our sector, we can strive for a mortgage market where everyone can come to work and feel comfortable being exactly who they are.

Bath BS partners with Legal and General to launch mortgage affordability calculator

Bath BS partners with Legal and General to launch mortgage affordability calculator

 

The online tool will give customers affordability calculations for the society’s residential and buy-to-let (BTL) mortgages, including buy for university and rent a room products.

The system, powered by Legal and General’s Smartrfit technology, gives intermediaries an indication of how much customers can borrow against the mutual’s lending criteria.

It reviews borrower affordability, before Smartrfit cross-references this information against lending criteria, such as maximum loan amount, minimum property valuation and joint borrower sole proprietor opportunities for the standard residential and buy for university mortgages.

The mutual will use the tool to gain insight on current demand and the types of borrowers that advisers are finding solutions for.

Craig Brown (pictured), head of underwriting at Bath Building Society, said: “It’s an exciting time of change at the society and improving the intermediary customer journey is a key focus for us.

“We’re delighted to launch the new affordability calculator technology which is a first step in streamlining the mortgage process and saving time for intermediaries.”

Kevin Roberts, director at Legal and General Mortgage Club, said: “Technology can play a significant role in helping intermediaries save time so they can focus on providing a more bespoke and agile service for their customer’s needs.

“This latest partnership will enable Bath Building Society to leverage our SmartrFit affordability tools to better understand the requirements of their intermediaries, saving money at the operational stage and driving value for both intermediaries and customers alike.”

Lender criteria needs ‘careful thinking’ to be more sustainable – Halifax Intermediaries video debate

Lender criteria needs ‘careful thinking’ to be more sustainable – Halifax Intermediaries video debate

 

Speaking on a Mortgage Solutions video debate in association with Halifax Intermediaries, Mason said that additions to homes, like solar panels, have “tended to create problems from a valuation perspective”. 

Not all lenders will currently lend on a property with leased or rented solar panels. Those who do consider it require further detail around financial responsibilities, such as whether the panels will be considered part of the property within the sale, or seen as the previous owners’ property in a similar vein to furniture. 

Mason believes attitudes toward greener renovations need to be changed. He added: “They’re viewed quite negatively, and I think if we are genuinely to drive a sustainable agenda, we need to think carefully about our lending criteria on things especially like solar panels. They need to be viewed more positively.  

“We want more people to do this, so they are energy self-sufficient. If our lending doesn’t catch up with sustainable activities and sustainable improvements, that’s going to be a problem.”

 

 

The advice process 

Kevin Roberts, director of Legal and General Mortgage Club, said conversations around a property’s energy efficiency tend to occur later on in the advice process. 

However, he said that was shifting, saying: “What we’re seeing is the property risk coming much more to the fore of the research journey.” 

Roberts believes that working towards energy efficiency presents a “real opportunity” for brokers, especially those with landlord clients who are up against the EPC deadline to improve the sustainability of rental homes. 

He added: “I’ve seen real innovation with some of our firms around using these kinds of messages to keep abreast [of energy efficiency] while a customer is in a five-year fixed, and to keep those marketing messages coming.” 

 

Watch the video embedded [8:10] hosted by Shekina Tuahene, commercial editor at Mortgage Solutions, featuring Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, Bukky Bird, group sustainability director at Barratt Developments and Kevin Roberts, director of Legal and General Mortgage Club.   

 

Sponsored content in association with Halifax and Lloyds Banking Group. For Intermediary Use Only 

Lenders have made a good start with green mortgages – Halifax Intermediaries video debate

Lenders have made a good start with green mortgages – Halifax Intermediaries video debate

Speaking on a Mortgage Solutions video debate in association with Halifax Intermediaries, Roberts said:  “I think lenders have made a really good start in terms of innovation, but there’s a really long way to go. 

“We now need to start demanding from lenders that we get much more focus on that. It’s not just a discount for A to C, whilst that’s nice, it’s not necessarily helping the issue.” 

 

He suggested that there needed to be help available so people could improve their home’s EPC rating and get the finance for it. 

He added: “Maybe we can be more creative around affordability measures if it’s for green [mortgages].  

“Maybe we can have much more cashback, maybe we can have more marketing. Some consistency, maybe, from the lenders would be really helpful. Education is always good – if lenders could collaborate a little bit more.” 

Bukky Bird, group sustainability director at Barratt Developments, said “the dream” was for every conversation a homeowner had about financing their home to consider the benefits of being energy efficient. 

She also proposed the idea of “genuinely impactful financial products” which factor in the savings that can be made when making a home more efficient. 

Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, said he wished to continue having “great” and “practical” conversations around green mortgages. 

He said Halifax was working on improving the quality of its backbook from an average EPC rating of D to C. 

He also said the bank was looking at piloting products to encourage people to retrofit their homes and improve energy efficiency. 

 

Watch the video embedded [7:01] hosted by Shekina Tuahene, commercial editor at Mortgage Solutions, featuring Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, Bukky Bird, group sustainability director at Barratt Developments and Kevin Roberts, director of Legal and General Mortgage Club.  

Sponsored content in association with Halifax and Lloyds Banking Group. For Intermediary Use Only 

Mortgage sourcing system assistance can support sustainable lending – Halifax Intermediaries video debate

Mortgage sourcing system assistance can support sustainable lending – Halifax Intermediaries video debate

 

Speaking on a Mortgage Solutions video debate in association with Halifax Intermediaries, Mason said: “We need to encourage broader participation of things like sourcing systems so brokers can easily source products that are helpful for sustainable lending.” 

Overall, he praised the housing sector for being innovative with respect to meeting its green targets. 

Mason added: “There’s so much activity to try and understand what the house of the future needs to look like. It’ll be fascinating to see how it evolves – for example, what kind of heating systems do future homes need? 

“Modern method of construction (MMC) homes are rapidly evolving. The big benefits there are the energy bills in these MMCs can be much smaller because they’re engineered in the factories to be highly efficient.” 

Mason said more could be done however, and although lenders have created products to offer cashback or lower rates to borrowers retrofitting their homes, other means to encourage and promote energy efficiency could be utilised. 

“For example, capturing EPC in the mortgage journey is going to be essential for the future, and then you can start to think about reflecting genuine affordability,” he added. 

Kevin Roberts, director of Legal and General Mortgage Club, said the industry was doing well to think about its impact on the climate and environment on a broader scale. 

He added: “Even if it’s having electric cars, putting things on their [company] website, offsetting [the mortgage process] by planting trees, people are starting to think about this and that’s because our consumers are.” 

Bukky Bird, group sustainability director at Barratt Developments, said not enough steps have been taken to encourage borrowers to reach a level which was needed, but suggested financial products which factor in a customer’s monthly savings could help. 

She added: “I think we probably need bolder partner engagement; I think we need to just do some things. Just trial some things, get out there, not wait for every single thing to fall into place.” 

 

Watch the video embedded [8:51] hosted by Shekina Tuahene, commercial editor at Mortgage Solutions, featuring Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, Bukky Bird, group sustainability director at Barratt Developments and Kevin Roberts, director of Legal and General Mortgage Club.

 

Sponsored content in association with Halifax and Lloyds Banking Group. For Intermediary Use Only

EPC ratings are not yet ‘future fit’ – Halifax Intermediaries video debate

EPC ratings are not yet ‘future fit’ – Halifax Intermediaries video debate

 

When asked if all new build homes should be built to an EPC rating of A or B, Bird said yes but challenges remain. 

She said the Future Homes Standard was helping housebuilders address this, but a firm roadmap with more detail was needed. 

The Future Homes Standard requires all new-build homes to be developed with low carbon heating and to be energy efficient by 2025. 

Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group, said the new build sector was well placed to benefit from the green revolution. He also said house builders were at the forefront of driving toward more efficient goals. 

However, he agreed that there were challenges with building homes to an A or B rating due to issues with the current EPC framework. 

“When we’re testing out new technology like air source heat pumps, the EPC framework doesn’t work perfectly today for the technology of the future,” he added. 

Air source heat pumps are not currently recommended to improve a home’s EPC rating because the methodology calculates how much the cost of fuel would be for each square metre of a home. 

As electricity is more expensive than gas, air source heat pumps often lead to a home’s energy efficiency rating being downgraded, despite them being a more efficient way of providing heat. 

Mason said: “There’s a potential that today the Future Home Standard on the basis of the EPC framework may actually not look like a highly-rated efficient product.” 

Bird agreed and said this highlighted the scale of the challenge as there were many things which still needed to be lined up. 

She added: “Whilst broadly, we’re in support of EPCs, we know that they really need to be fixed. They’re not yet future ready, they’re not yet future fit.” 

Regarding existing housing stock, Kevin Roberts, director of Legal and General Mortgage Club, said advisers were at the start of the journey but the messages being delivered by policymakers were still “a little bit muddled”. 

He added: “Our regulation is for mortgage advice, it’s not for green advice so we have got to understand what is our role. We’ve got to make sure we don’t venture into advice that either we’re not able to give or that might come and bite us in a few years’ time.” 

Mason said it was also about convincing people in lower-rated homes that it was better to spend their money on renovating a home to make it greener rather than refurbishing a room. 

 

Watch the video embedded [8:37] hosted by Shekina Tuahene, commercial editor at Mortgage Solutions, featuring Andy Mason, head of strategic partnerships and housing at Lloyds Banking Group Bukky Bird, group sustainability director at Barratt Developments and Kevin Roberts, director of Legal and General Mortgage Club.

 

Sponsored content in association with Halifax and Lloyds Banking Group. For Intermediary Use Only

L&G, Sesame Bankhall Group and SimplyBiz Mortgages form climate change alliance

L&G, Sesame Bankhall Group and SimplyBiz Mortgages form climate change alliance

 

The aim of the group is to explain climate change legislation and engage with industry figures to provide guidance and help for advisers. 

It is set to act as a source of support for intermediaries when dealing with green issues in relation to mortgage applications. 

The companies have also been working with lenders and the Association of Mortgage Intermediaries (AMI) as part of this initiative. 

Advisers seeking support have been urged to get in touch with their usual contacts at Legal and General, SimplyBiz Mortgages and Sesame Bankhall Group.  

The collaborative also wants other distribution firms to join them and make themselves available to support advisers. 

Michele Golunska, CEO of Sesame Bankhall Group, said climate change was a bigger issue than housing and mortgages alone, but acknowledged that new legislation would alter borrower choice. 

“Mortgage advisers play a critical role in helping customers secure what is likely to be their largest ever purchase. We are focused on ensuring they are robustly supported to do so,” she added. 

Kevin Roberts, director of Legal and General Mortgage Club, added: “We believe that collaboration will be key to addressing this hugely important issue. We have already been working closely with lenders and will soon be able to deliver educational content, available as structured continuing professional development pieces, centred on supporting the advice journey.  

“But our aims extend beyond sharing practical guidance alone, and we are committed to ensuring advisers’ interests are represented among various government and trade bodies, while helping intermediary businesses develop their own sustainability guidelines. Our hope is that the industry will be inspired by our initiative, and we wholeheartedly welcome those who would like to join us in addressing this challenge.” 

Richard Merrett, head of strategic development at SimplyBiz Mortgages, said the group was about ensuring advisers have a voice and are supported as they work to raise awareness. 

He added: “We hope to create a positive culture around identifying the issues impacting consumers and giving clarity to advisers around what is entering their world, so they have greater opportunities to demonstrate expertise and advise on actions with their clients.” 

Residential transactions up 2.6 per cent in March – HMRC

Residential transactions up 2.6 per cent in March – HMRC

The figures released by HMRC showed a continued trend of purchase demand in spite of the collateral caused by the pandemic, Ukraine war, and Brexit causing a rise in living costs and inflation.

The non-seasonally adjusted estimate of UK residential transactions in March 2022 was 110,990.

The adjusted 2021/2022 annual estimate currently stands at 1,374,050 residential transactions.

However, HMRC warned that the figures should be treated with a pinch of salt due to “significant forestalling observed in March 2021” in both land and buildings transaction tax (LBTT), and stamp duty (SDLT), as the stamp duty tax break and its various amendments caused spikes in activity throughout 2021.

The body attributed this forestalling to transactions scheduled to complete prior to the 3 March 2021 announcement as there was a rush to complete around the deadlines with a record 178,320 adjusted transactions.

It also observed “significant uncertainties” due to the pandemic and the impact of lockdowns on the property market, which has been affecting seasonal trends since April 2020.

 

A return to stability in spite of complications

Mark Harris, chief executive of SPF Private Clients, said: “Demand for mortgages is strong as rates remain competitive, even as swap rates continue to rise.

“Some heat has come out of the purchase market compared with this time last year which is welcome as that frenetic pace could not continue. Remortgaging activity is strong as borrowers attempt to lock into low mortgage rates before they disappear.”

Tomer Aboody, director of MT Finance, said the higher transactional volumes in March compared with February could be “the turning point when the market finally gets some stability and pricing normalises.”

He continued: “Volumes are much lower than March 2021, which is the reason why there has been such a significant increase in property values. The difference last year was that the stamp duty break encouraged many would-be sellers to get on and sell, suggesting that a revamp of stamp duty is needed to stimulate activity in the market.”

 

A golden opportunity for advisers

Kevin Roberts, director, Legal and General Mortgage Club, said: “Despite the pressure on borrowers caused by the rise in the cost of living, demand remains high and the overall outlook for the market is strong.

“The more complicated conditions mean that the role of advice is now more important. Borrowers may well need more support and reassurance, presenting an opportunity for advisers to really demonstrate the scope of their expertise and add value, during what will be a pivotal time for their clients.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “Transactions are usually a better measure of housing market health than more volatile prices – but not in this instance.

“These figures reflect sales which mainly took place a few months ago when activity was more lively. At the sharp end, we have noticed that since then the rising cost of living and interest rates, especially for those on tight budgets, are contributing to an easing of price growth and a drop in sales.

“Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable.”

HMRC noted that its estimates are based upon incomplete data as not all returns from completed transactions will have been received, with amendments due in coming months.

Legal and General Mortgage Club Awards 2022 finalists revealed

Legal and General Mortgage Club Awards 2022 finalists revealed

The ceremony will return to its usual venue of the Guildhall in London on June 10. The theme for this year is ‘Adapt, Change and Thrive’ and the awards will recognise the industry’s response to various changes happening on a national and global scale. 

There are 18 awards up for grabs this year, 10 for lenders and eight for brokers. A new category has also been added to the line up – the Best Lender Marketing Campaign, which will put a spotlight on marketing professionals who drive communications between lenders and brokers. 

Watch the video below as Kevin Roberts, director of Legal and General Mortgage Club, unveils the awards shortlists.