MPowered Mortgages’ BTL range added to L&G Mortgage Club panel
It is the next step in the lender’s rollout to the broker market which has already gone live with TMA and Mortgage Advice Bureau (MAB).
Members of Legal & General Mortgage Club and users of its SmartrCriteria tool can now access MPowered Mortgages’ range of unregulated buy-to-let products.
This initial offering is available to limited companies, portfolio and individual landlords and includes two and five-year deals up to 75 per cent loan to value (LTV).
Rates start at 2.94 per cent for a two-year fix up to 50 per cent LTV for individual landlords and all deals have a 1.5 per cent product fee.
The funder of this initial £2bn unregulated buy-to-let offering, an unnamed top 15 global bank, requires a physical valuation to confirm the loan.
Last month Emma Hollingworth, distribution director at MPowered Mortgages, told Mortgage Solutions this range would soon be extended to include houses in multiple occupation (HMO).
It also launched a platform for hosting its own and other lenders’ products, where it intends to cover “all the core areas of lending”, once regulatory permissions allow.
And it is working on artificial intelligence (AI) technology with MAB which it hopes will eventually enable its system to begin underwriting cases as brokers are completing client fact finds.
Commenting on the latest agreement, Hollingworth (pictured) said the lender was delighted to be announcing its addition to the panel.
“Legal & General Mortgage Club shares our vision for a tech-enabled future and our commitment to deliver for brokers,” she said.
The addition of MPowered Mortgages will bring the total number of lenders available through L&G’s panel to more than 110 and follows the addition of Habito, West One Loans and Molo Finance, earlier this year.
Danny Belton, head of lender relationships at Legal & General Mortgage Club said he was very pleased to welcome MPowered Mortgages to the panel.
“They are a new entrant to the market but one which is using cutting-edge technology to drive our market forwards,” he said.
“Since the start of the crisis, we have seen how technology can help our sector and it is excellent to offer these products to advisers as in today’s busy mortgage market, the ability to quickly and efficiently make lending decisions will help to counteract delays.”
Post-pandemic mortgage affordability fears likely to penalise worse off, says L&G
Research from Legal and General Mortgage Club showed UK borrowers who have seen their income fall due to the Covid-19 crisis could soon pay thousands of pounds more in monthly repayments with one in three borrowers fearful of remortgaging and exposing their finances to affordability checks.
This could impact over 700,000 borrowers who will reach the end of their two and five-year residential fixed-rate mortgages in 2021.
More than half of borrowers who have seen their income reduced as a result of the crisis are concerned that lenders will now be scrutinising their finances in more depth compared to pre-Covid levels.
Half are concerned their decision to take a payment ‘holiday’ will affect their future mortgage options, and two thirds believe it will be harder to get a mortgage when furloughed.
The research showed moving onto a lender’s SVR of 4.1 per cent could increase annual mortgage repayments by more than £2,500 when compared to borrowers on the average two-year fixed rate at 2.65 per cent on a 90 per cent loan to value product.
Meanwhile, 52 per cent of those who plan to move deals say they are likely to stick with their current lender, with over a third of those saying this is the easiest way to secure a new deal.
Kevin Roberts, director of Legal & General Mortgage Club (pictured) said with many people already financially challenged finding value is more critical than ever.
“There are still thousands of great fixed rate-deals available, including furlough-friendly mortgages for those who have or continue to draw support from the government’s Job Retention Scheme.
“The UK also has a thriving specialist lending sector designed to help borrowers with complex circumstances, from the self-employed to those who might have experienced a credit blip, many of whom can only be accessed through speaking with an independent adviser who could help these borrowers to save thousands of pounds in their mortgage repayments,” he added.
West One and Castle Trust expand distribution, Roma added to sourcing – round-up
Users of the sourcing system will now gain access to Roma’s bridging, standard residential and commercial products.
Nick Jones, commercial director at Roma, said: “Partnering with innovative sourcers like Twenty7Tec is a natural progression for us.
“Using technology to enhance the initial decision making process around product selection allows the Roma team to concentrate on the more subjective decisions as the case progresses, acting with flexibility and customer centricity.”
Nathan Reilly (pictured), head of lender relationships at Twenty7Tec added the firm was delighted its users would be able to source Roma Finance products.
West One and Castle Trust added to club panels
TMA Club has added West One Loans to its panel, giving its members access to the lender’s buy to let products.
Lisa Martin, development director at TMA, said: “Welcoming West One to TMA’s expanding buy-to-let panel reiterates our ongoing commitment to providing landlords with the best proposition and highest level of support.”
Meanwhile, Castle Trust Bank has joined Legal and General Mortgage Club’s panel, opening up its specialist range to the club’s members.
This includes Castle Trust Bank’s holiday let, portfolio, homes in multiple occupancy and ex-pat offerings.
Danny Belton, head of lender relationships at Legal and General Mortgage Club, said: “Castle Trust Bank is another great addition to the Legal and General Mortgage Club lender panel.
“I am looking forward to working in partnership with the Castle Trust Bank team to provide our members with access to its specialist lending proposition.”
Tapered stamp duty holiday end could save £25bn worth of housing transactions
The figures come from multiplying the average Office for National Statistics UK house price of £251,500 by the 100,000 transactions at risk of collapse estimated by Rightmove in January.
In its house price index published earlier this week, rival estate agent Zoopla estimated that around 70,000 transactions could stall if they failed to complete by the 31 March deadline, which would mean around £17bn of collapsed deals.
Earlier this week The Times reported that chancellor Rishi Sunak was planning a three-month extension taking the stamp duty holiday deadline to the end of June.
However, professionals across the property sector warned this would simply kick the can down the road and repeat the cliff edge scenario later this year, instead they argued for a tapered approach to allow those deals in process to complete.
Research from Money Supermarket suggested that around three-quarters of UK adults may support extending the stamp duty holiday.
It asked more than 5,000 people what action the chancellor should take with 74 per cent saying the holiday should be extended because it was helping the market, while 19 per cent felt it was no longer needed.
Earlier research commissioned by the comparison site found 63 per cent of prospective buyers were in the market due to the scheme, with a similar number saying they would change their buying plans if the scheme was not extended, while 24 per cent would withdraw from the market completely.
Money Supermarket spokeswoman Jo Thornhill said the research showed there was a clear appetite to extend the stamp duty holiday and echoed calls for it to be tapered.
“The policy has clearly proved popular with buyers, stimulating a boom in the market despite the challenging conditions in the wider economy,” she said.
“And, crucially, it has removed another cost for many first-time buyers, making that first step onto the ladder that little bit easier.
“While we welcome an extension, looking further ahead, a phased deadline where the benefits are gradually reduced would prevent a ‘cliff edge’ scenario which puts pressure on the market overall.”
£5,000 buying costs
Additionally, Legal and General Mortgage Club and Trussle estimate that prospective buyers could on average lose more than £5,000.
Estate agent fees of one per cent on the average property value plus VAT come to £3,018, plus £210 for valuation, £500 for the survey and £1,500 for legal fees comes to more than £5,000.
Kevin Roberts, director of Legal & General Mortgage Club said the holiday had accelerated the market but at the peak of activity it was taking up to 17 weeks to complete on a property purchase. “This means there are consumers who started their homebuying journey last year in the hope of taking advantage of the tax incentive, but who are now unlikely to complete before the current deadline,” he said.
“Some of these buyers might not have put aside the funds to pay for stamp duty, which could mean their purchase falls through.
“Overall, we would like to see a broader review of property taxes including SDLT to assess the different impacts on an evolving property market.
“Until this happens, we would encourage the government to consider a tapering of the scheme in the upcoming Budget, this would help to avoid the potential for significant disruption in the housing market. A smooth transition would also support future growth in the housebuilding sector, which has the potential to turbocharge growth as part of the government’s recovery plans.
Miles Robinson, head of mortgages at Trussle, added: “There will be a significant number of current buyers who are dependent on the savings from the holiday to be able to afford their house purchases, and it’s likely that many will pull out if they are unable to complete in time to meet the 31st March deadline.
“A tapered ending, that guarantees the holiday to buyers already in the process, could avert a situation where we see thousands of housing transactions collapse.
“With the Budget fast approaching, we’re calling on the government to consider taking another look at how to bring the scheme to an end.”
Specialist lenders agree host of club and network distribution deals
Castle Trust Bank has been added to the lender panels of PMS Mortgage Club and Sesame Network, with members having full access to the lender’s mortgage, bridging and development finance ranges.
These include holiday lets, houses in multiple occupation (HMOs), portfolio loans and property refurbishment.
Castle Trust Bank sales director Rob Oliver said he was pleased to partner with Sesame and PMS. “With this important partnership, we are looking forward to delivering more certainty to even more brokers,” he said.
Roma and MCI
Roma Finance has been added to MCI Mortgage Club’s lender panel.
This will give the club’s members access to Roma’s first and second charge loans on bridging, development finance, buy-to-let, holiday let and serviced accommodation.
Five-year finance is available for standard buy-to-lets and HMOs up to eight rooms as well as non-standard construction and flats over four storeys.
Melanie Spencer, head of MCI Mortgage Club, said: “Roma Finance can offer our members a wide range of bridging, development and buy-to-let finance and will consider applications on a case-by-case basis.”
Roma Finance commercial director Nick Jones added: “We are delighted to be joining MCI Mortgage Club, they are expanding rapidly and are aiming to achieve a fully comprehensive offering of bridging and buy-to-let solutions.
“We are delighted to have been invited to join their panel and I am very excited to see where the future takes us.”
Together and L&G Mortgage Club
Together has added its bridging products to Legal and General Mortgage Club’s SmartrCriteria tool.
It means the lender’s bridging product criteria will now be searchable for all brokers using the club.
Together head of national accounts Phil Quinn said: “Legal & General is the UK’s largest mortgage club and we’re delighted to be incorporating our bridging product criteria on their platform, to give their members’ clients even more options when it comes to finding the right type of finance.
“There will also be huge benefits for us in being able to see, through the system, what topics brokers are searching for in certain areas of the UK, for example, allowing us some really valuable insight for our sales and marketing teams.”
Legal & General Mortgage Club head of lender relationships Danny Belton added: “Bridging products play an essential role in supporting buyers through their purchase journey and this partnership with Together means advisers can now access a broader array of short-term finance options through SmartrCriteria.”
Blueberry and Tenet
Finally, packager Blueberry Specialist Lending has made services available to advisers of Tenet Compliance Services.
The firm has recently expanded to include bridging loans and second charge mortgages.
Alex Hamilton, head of specialist lending for Blueberry said: “The team and I are elated to be working alongside Tenet Compliance Services.”
Ben Wright, director of strategic development at Tenet added: “In our continued support of independence, adding another quality specialist provider to our panel is a real positive for the advisers we support.”
Furlough-friendly mortgages and Brexit effects top broker searches
According to Legal and General Mortgage Club, enquiries for mortgages allowing furlough incomes more than trebled from December to January, and was the most searched for term on its SmartrCriteria tool last month.
The 230 per cent rise followed a similar rise in November, the mortgage club said.
The top five searches also revealed the impact of Brexit as searches about borrower visa requirements took the second spot as the trading agreement with the EU was implemented.
Demand from first-time buyers and first-time landlords remained high, as did options for borrowers with satisfied defaults – potentially another result of the pandemic hitting people’s finances.
Legal and General Mortgage Club said January was the tool’s busiest month in its two years since launching as searches increased by 69 per cent on December.
It did not give an exact number for the searches made but said it was in the “tens of thousands”, with residential products making up 76 per cent of the overall total.
Legal & General Mortgage Club head of mortgage transformation and operations Clare Beardmore said the latest data painted a promising picture for the mortgage market.
“Clearly, many people are continuing to press ahead with their homeownership ambitions and in many cases advisers are successfully matching them with the mortgage products they need to step onto and up the property ladder,” she said.
“However, while the total volume of activity rose in January, we’re continuing to see strong demand among consumers for furlough friendly mortgage products.
“While this isn’t altogether surprising given the effects of lockdowns over the past year, it’s yet another sign that thousands more borrowers with complex circumstances will need the support of advisers to help them find suitable mortgage options in the months ahead.”
Greenfield Mortgages added to L&G panel
All of the lender’s bridging products will be available through the club and its criteria will be added to Legal & General’s SmartrCriteria tool.
Averil Wagoner (pictured), relationship manager at Greenfield Mortgages, said: “We are very pleased to be kicking off 2021 by joining L&G’s panel of specialist lenders.
“We look forward to growing our relationship with L&G Club members by providing a quick and comprehensive level of service.”
Danny Belton, head of lender relationships at Legal & General Mortgage Club, added: “Greenfield Mortgages brings over a decade of success and experience in the short-term bridging lending space.
“They offer a range of specialist products to meet the needs of buyers’ increasingly unique and changing circumstances. We’re thrilled to welcome them to the panel.”
Lenders must underwrite self-employed borrowers ‘on current business levels’ – Belton and Firth
Speaking on a Kensington Mortgages webinar, representatives from both organisations said a more up-to-date approach was the fairest way to treat self-employed borrowers.
Knowledge Bank CEO Nicola Firth (pictured) said: “I’d like to see from lenders a lot more focus put on current business levels rather than looking back retrospectively.
“I don’t think the retrospective look over the past year, two years or three years is going to reflect fairly on that self-employed person or their business.
“So I would like to see underwriting done with a clear view of where that business is now, and how its performing.”
Legal and General Mortgage Club head of lender relationships Danny Belton added: “I agree with Nicola, let’s deal with these customers in a different way, let’s not be too retrospective.
“We’ve learned we can start to look at them in the here and now and how do we project that going forward.”
Lenders took cheap money
On the subject of firms using the government’s bounce back loans or self-employed income support scheme (SEISS), they added that this was similar to the mortgage payment deferral setup.
“How many people took them because they absolutely needed them and how many people were opportunism thinking it’s cheap money?” Firth said.
“How do you treat those people? One size does not fit all. And if someone is using cheap money to pay off a more expensive loan they’re being quite savvy with their business.
“It’s very difficult and nothing but manual underwriting is going to get through that.”
Belton also noted that lenders had been on the receiving end of cheap funding as well and it maybe unfair to hold it against firms doing the same.
“Lenders were very happy to take very cheap money from the government if they could access the relative scheme there, so businesses are doing the same thing there, whether they need to or not,” he continued.
“They’ve just taken it because they can, the same as people taking payment holidays because they can. It’s just allowed in the rules, so is it right to include those in the affordability calculation?
“Ultimately there will be an outgoing and an income, that’s what you’re going to use as basis for assessment.”
Advice needed more than ever
The pair were joined by Kensington Mortgages new business director Craig McKinlay and they agreed that overall the self-employed market was likely to grow and that advice and manual underwriting would be vital.
“I think its going to be really positive in the future, I think there will be more self-employed, that’s what we saw in the last recession,” McKinlay said.
“There’s a really big opportunity for brokers. People need advice more than ever, the more complex the market the harder things get, the more people need advice.”
He added: “Things are changing very quickly but it is a very good opportunity and it’s a real opportunity.”
Foreign buyers and equity release downsizers top October L&G mortgage adviser searches
Figures from the SmartrCriteria tool, showed that mortgages for applicants with visas was one of the highest search terms among advisers with requests for ‘expats not in UK’ also on the list of top 10 adviser looked for terms.
The data also showed that ‘maximum age’ was the second most searched term suggesting that older borrowers, including those looking to downsize, were also looking to benefit from the Stamp Duty holiday.
The most popular search within ‘maximum age’ was the 71 to 75-year-old range, which increased by 14 per cent. However, the largest percentage increase was for those aged 85 and over, which saw an increase of 38 per cent in searches during October.
Kevin Roberts, director, Legal & General Mortgage Club, said: “Demand from consumers to buy property in the UK shows no signs of slowing and it’s clear that the Stamp Duty holiday continues to drive activity.
“Lending criteria is changing every day and borrowers face a longer mortgage journey as the market continues to adapt to unprecedented demand. Advisers will be key in helping these borrowers and others to cut through the noise and find the best product for their particular circumstances.”
Data from Twenty7Tec suggested the lockdown saw accelerated mortgage searches across residential and buy-to-let markets but James Tucker, CEO of Twenty7Tec, said this actually reflects a drop off ahead of the lockdown as people concentrate on other practicalities.
“Immediately as the lockdown starts, mortgage search volumes begin to rise again. We’ve seen it again and again this year on a UK-wide, home nation and regional level before and just after we enter lockdown. Any drop is then is consistently mirrored by a spike of mortgage search volumes within a day or two of the lockdown beginning.
He said that buy-to-let searches constituted just over 19 per cent of all searches, adding: “Buy to let search volumes have been relatively steady all year and those are converted into ESIS documents more often than residential searches.”
Advisers will shape the evolving role of BDMs
Lenders could move towards having dedicated online BDMs as the lockdown and social distancing restrictions become longer term, Mortgage Solutions Television in association with Skipton Building Society heard.
Speaking in the discussion, Legal and General Mortgage Club director Kevin Roberts noted BDMs will need to raise their game and show how they stand out from the crowd as interactions have increasingly moved online.
“I think the challenge for our BDM community is how do you raise your game, how do you make yourself unique?” he said.
“How are you going to reach everybody in the advice firm and how are you going to stand out?
“So I don’t envy the task of our lender BDMs, I think it’s going to be really tough, but speaking to advisers, they absolutely need it at the moment.”
Discussing how the role will change, Roberts emphasised that brokers “absolutely valued” BDMs, but that there would be an evolution of how they operated, and lenders were already talking about dedicated “Teams BDMs”.
“It needs to be tailored. Some firms may not want lenders coming into their office, they will have their secure bubbles,” he said.
“So BDMs need to take a very tailored approach to each firm and think of what they want. They need to take a creative approach and tailor messages.”
‘Determined by the market’
This was echoed by Skipton Building Society director of business development Paul Fenn who agreed: “It will absolutely be determined by the market.
“Brokers and introducers out there will determine to what degree we move back to face-to-face or we move back to a virtual environment.
“I think it’ll be a mixture, some virtual, some field. Whether you have a complete virtual team, well let’s see where the next few months goes.”
And Skipton Building Society BDM Rachel Hunnisett added: “The BDM position has always been about building relationships and that hasn’t changed. What has changed is the way we do it.
“How much of that do we carry forward – that will be driven by brokers, driven by demand and what the market needs from us.”