Hulme is global managing director of real estate and housing at Lloyds Banking Group and on the board of Housing Growth Partnership, a social impact investor backed by Lloyds and Homes England.
He has held a number of roles at Lloyds and was previously at Tesco Bank and the Royal Bank of Scotland Group.
Mike Kirk, chair of the Hyde Group, said: “I’m delighted Andy is joining us at what is a really exciting time for Hyde. His extensive experience in delivering products, propositions and transformative change across multiple brands and channels, coupled with his deep understanding of the housing market, will help accelerate the delivery of our ambitious strategy to become a truly customer-driven organisation.”
Hulme said: “I’m humbled to be asked to serve as Hyde’s CEO and can’t wait to embrace the opportunity to help the Hyde team deliver its social purpose, with a particular focus on our customers. Providing safe and secure homes to those who wouldn’t otherwise have one is a cause very close to my heart.”
Hyde’s 2050 Strategic Plan, launched last year, sets out its aim to provide thousands of more energy-efficient and safe homes that meet long-term needs.
Hyde signed an agreement with M&G Investments in March 2021, with plans to build up to 2,000 shared ownership homes that Hyde will manage on behalf of M&G’s ‘for-profit’ registered provider.
“These types of partnerships with institutional investors will be vital, if we’re to overcome the multiple funding challenges we face,” Hulme said. “I’m looking forward to helping Hyde find new sources of funding, so we have the money to keep developing at the same rate, while ensuring homes are safe, decent and sustainable.”
Neal Ackcral remains CEO until Hulme takes up his post in early 2022, when he will return to his original role as chief property officer.
Hyde is an English housing association working in England, owning or managing almost 50,000 homes in London, Kent, Surrey, Sussex, Hampshire, the East of England and East Midlands.
Speaking at the New Homes Senate, Andy Mason (pictured), head of strategic partnerships and housing at Lloyds Banking Group, said that energy efficiency was “pretty low down the priority order” for buyers and that would be a “big problem” going forward.
Mason said that up to a third of UK carbon dioxide emissions came from housing and this will need to be reduced by 95 per cent to meet current net zero targets.
He also said that around 4.5m homes overheat in the UK and the risk of flooding is increasing and will be a “growing consideration for people building on new sites and buying new homes”.
He said: “I think we don’t start from a great point there in terms of the way we look at sustainability. If we start with, how do we look at the homes themselves; highly sustainable homes are typically more expensive as new technology costs money. It’s not always consumer friendly, and energy efficiency definitely creates tradeoffs in homeowner usage.”
He added: “Consumer demand for sustainable homes is low. We don’t really sell the benefits of sustainability. I think primarily the focus is either on cosmetic features or location.”
Mason continued that sustainability is not really thought about from an adviser perspective, pointing to the fact that conversations weren’t often had around energy efficiency and run costs.
He said: “From an adviser perspective, how do we start to build that conversation, the affordability conversation, the availability of products into the price journey, so at least sustainability is a consideration for homebuyers.”
He added that whilst green mortgage products were becoming more available, but they were “typically selected once the customer has already bought the house or and is on the journey.”
Mason said: “Lender support has been pretty low. We’ve got products with discounts and cashbacks, which is a start, but I think we need to do much better.
“I think there’s much more we can do actually to raise the profile on sustainability.”
Consumers need an ‘educational baseline’
He said that there needed to be greater awareness with older properties of where they were starting from an EPC perspective and give something to aim for.
Mason added Lloyds Banking Group has launched a proposition with Energy Savings Trust which would help customers view what their current EPC rating is and how they can approve it.
It also told them how much it might cost and what the saving on bills might be. He said that this tool would provide an “educational baseline” for customers.
Mason said that the cost of improvements would often be higher than the short-term energy saving, using an example where it would cost £25,000 to improve a property but save £600 a year.
“Who would do that without other kinds of financial support?” he said.
He added that Future Homes Standard, which will happen in two stages with a 31 per cent reduction in emissions targeted next year and 75 to 80 per cent reductions by 2025, would place increased pressure on new technology where the broker would play a vital role.
Mason said: “We need to get our heads around the positives of this and some of the questions that people might have around it. If we don’t understand it, we can’t talk about it and we can’t turn it in to a virtue.”
Sustainability needs to be promoted across supply chain
Mason said: “The question really is how do we create demand and therefore create value for all of this investment that’s going into sustainability.”
From a builder’s perspective he said it needed to be clearer that new homes would be of better quality and more sustainable but that they could well be more expensive.
He added that estate agents and valuers would need to talk about energy efficiency and sustainability to help foster consumer demand.
He said that in “mature markets” in Europe a bigger price differential was emerging between energy efficient properties and non-efficient properties and that “might be where our market could head”
Mason said: “The problem I hear quite often is we don’t the value back on the investment in building a property that’s energy efficient, but I think if we get all of this right and start creating demand from people who say these are great places to live, they are efficient and comfortable, actually the value point should fall into place.”
So this week, Mortgage Solutions is asking: With a continued lack of property supply and huge UK firms investing in, building and/or becoming landlords for residential rental accommodation for the first time, what kind of impact might this have on the housing and mortgage markets?
Andy Hutchinson, managing director of Citra Living – Lloyds Banking Group’s private rental arm
As part of the group’s commitment to helping Britain recover, we aspire to a UK in which all people have access to stable, affordable and safe homes.
We believe there is an opportunity to support the rental market without compromising the support we provide to homeowners and those aspiring to get on the housing ladder. One in five households in the UK is already in private rental, with demand set to increase over the next five years.
For an increasing number of people that means renting, but it shouldn’t mean quality is compromised.
Citra Living is embarking on a first step to provide incremental housing stock for the private rental sector. We are also looking to partner with developers to ensure a consistent standard of properties is available to rent. We want to ensure more people have access to good quality, new-build rental properties, that they can consider their home.
Lloyds Banking Group remains fully committed to homeownership and has lent more than £9bn to first-time buyers in 2021.
We are the largest lender to the social housing sector, having provided more than £9bn since 2018 and we are a leading lender and equity provider to UK housebuilders, helping them to build tens of thousands of new homes each year.
Payam Azadi, partner at niche Advice
Lenders have always been involved in the private rental sector.
It gives a sign of confidence that UK property is still a viable entity. When global organisations look at UK residential property, they’ve obviously evaluated it. They’ve got lots of analysts and think UK property is a good bet, that’s not so bad.
As they are a big corporation, their portfolio is going to be completely different to your novice landlord. It’s a different ball game. Lloyds have a lot of insight into the property. Especially with the acquisition of HBOS, they have a lot of property data so it’s a good sign if they’re coming into it.
It will be interesting to see what type of housing structure Lloyds will go after. Will they follow Legal and General’s footsteps? Will they have purpose-built units?
It will be interesting to see what they invest in and the initiatives they approach. That will give a clue as to what areas of the sector are marked for growth.
What you will see in the UK – and it’s already happening globally – is more large institutions getting involved in the residential market. That often means large complexes with shared living areas, it’s a whole new set up.
Single buy-to-let properties will go through an evolution. Just like we’ve seen more purpose-built blocks for student accommodation.
People want all the facilities that come with these properties.
I don’t think it’ll affect homeownership. I think it’s just Lloyds trying to attract some growth; the average homeowner won’t care that they have a massive stake in the market. We already see that in the commercial market where a lot of pension fund companies own properties.
Akhil Mair, managing director of Our Mortgage Broker
There are a few ways of looking at this, both positive and negative.
The positive is that it shows Lloyds are confident in the UK rental market, they’ve said they’ll buy a large number of units which gives the sector backing.
It gives other landlords more confidence because they think ‘if a big bank like Lloyds wants to get into this, it must be a good thing’.
Landlords won’t be upset because although there is a shortage of housing, that was there anyway. Lloyds entering the market won’t disrupt anything.
On the flipside, rentals could go up and the premiums could go up.
More buy-to-let landlords are trying to make their portfolios professional including the types of properties they purchase and how they kit them out. This could increase both rental and house prices over time.
But nothing ever gets cheaper, a can of Coca Cola costs 25p when I was growing up.
Overall, I think it’s positive, Lloyds are backing the UK property market. They clearly think property is a good asset class to invest in so everyone wins.
Dan Batterton, head of build to rent at Legal and General Investment Management Real Assets
The UK needs a high quality residential rental sector that offers flexibility and choice to residents, offering long term occupational security.
The current private rented sector does not provide long-term certainty to occupiers, but the build-to-rent (BTR) sector does. Traditional build-to-sell developers produce 150-200,000 homes per year.
The growth in the BTR sector is not reducing the amount of homes being built by build-to-sell developers. A new business model and more capital is allowing for more homes to be built, BTR is providing net additional homes.
In the UK, we are roughly building 100-150,000 homes less than we require per year.
BTR is bringing new capital from long-term pension fund investors to support the building of homes. BTR will not bridge the shortfall of homes required but is adding to supply which will help with the acute shortage of homes.
Homeownership is not the only answer, it is one form of housing tenure that is right for some but not for everyone. Renting can be a positive aspirational choice and BTR is trying to deliver this through purpose-built homes with a great service.
Of our c. 2,500 occupiers, when questioned, only one third would buy a home if they could afford to. They were renting because they wanted to, because it suited their lifestyle at the time. It may not suit them for their entire life, but it does at some points.
It is simply wrong to assume everyone wants to own a home, but it is absolutely right that people want a choice and BTR can make renting a positive choice.
Jeni Browne, director of Mortgages for Business
Big players such as John Lewis and Lloyds Banking Group investing in the private rented sector is certainly good for local tenants who can’t afford housing and have to rent. Frankly, anything that increases the number of homes in the UK is in the greater interest in the housing market.
John Lewis has unveiled plans to build 10,000 homes for rent over the next few years – roughly 7,000 of the homes are to be built on sites already owned by John Lewis, ranging from studio flats to houses. That should be applauded.
Will it make a big impact on the market? Perhaps locally. Supply and demand suggests it will be significant at some level. More rental options means more competition, and that should mean less upwards pressure on rents, making renting a more attractive option. And, theoretically, that should help potential first time buyers save to get on the housing ladder.
But on a wider national-scale, this poses no threat to standard buy-to-let landlords; until the government sorts out the housing shortage and materially increases the volume of the stock of affordable homes, nothing is going to seriously affect the demand for property to rent.
Residents of John Lewis’ estate will have the option of renting flats furnished with John Lewis products and all developments will include a Waitrose convenience store near the entrance – John Lewis clearly isn’t focusing on Lidl shoppers, are they.
In fact, private landlords should probably take heart. You are judged on the company you keep and – unlike other investors entering the sector – you don’t get more bluechip than John Lewis and Lloyds. Afterall, they have reputations to uphold that large private investors don’t have to worry about.
He joins Recognise from Allica Bank where he was also head of credit.
Keyte has 28 years experience in the industry, which includes major credit and risk roles at lenders such as Lloyds Banking Group and Allied Irish Bank. He has experience in SME and corporate lending, including leveraged finance and asset finance, as well as expertise in credit underwriting, policy and regulatory compliance.
Keyte (pictured) has joined Recognise Bank as the bank signals plans to further increase its lending following its latest successful fundraising round where it raised £14m in capital.
The bank aims to help growing companies that are underserved by the mainstream banks, it said.
“I’m delighted to be joining Recognise Bank. Its focus on building real personal relationships with SMEs completely aligns with my views on how best to support the small business sector,” Gavin said. “Every business is different, so it’s vital that lenders have people with experience of SMEs to understand both their challenges and their opportunities.
“This an exciting time in the Bank’s development, but also a great opportunity for Recognise to support UK entrepreneurs and companies looking for finance to help them grow.”
Mark Bampton, chief credit officer for Recognise Bank, said: “The UK’s SMEs are poorly served because so many of the mainstream banks have automated their lending and removed the people with real expert knowledge of business sectors and their financial needs.
“In Gavin we have somebody with a huge amount of experience of lending to the SME sector and a great understanding of what makes them tick. He will be a great asset in helping to shape our proposition as we increase our lending to small businesses by developing strong relationships with business owners and truly understanding their business.”
It’s recent capital raise will pave the way for the removal of deposit restrictions by the PRA (Prudential Regulation Authority), allowing the Bank to offer personal and business savings accounts, which in turn will enable Recognise to provide more lending to the SME sector.
On the capital raising, Jason Oakley, chief executive officer of Recognise Bank, said: “This is a major milestone in our journey to create Recognise Bank and change the complexion of SME banking in the UK.
“We set out on a mission to help the UK’s growing small and medium sized businesses, who need expert support more now than ever before. This successful capital raise is proof that we are on the right trajectory.”
Other recent appointments by Recognise include Paul Bagan as business development manager (BDM) who will be overseeing the North West and Yorkshire regions and Matthew Lawrence as regional account manager for central London.
According to the Financial Times, in the court documents the homeowners argue the percentage of equity taken by the Bank of Scotland, part of Lloyds Banking Group, was “grossly excessive”.
The action, led by law firm Teacher Stern, will be heard in the High Court and relates to mortgages agreed in the late 1990s.
Teacher Stern said that in the case of one claimant they have been left owing £1.6m to Bank of Scotland after taking out a £187,000 shared appreciation mortgage in 1998 against their £750,000 London home which is now worth £2.8m.
Shared appreciation mortgages are tied to a property’s value. Offered during a short period in the late 1990s by banks such as Bank of Scotland and Barclays before the advent of equity release, the mortgages were billed as a way to fund retirement.
Homeowners were offered the opportunity to release up to 25 per cent of the value of their home often interest free. However, on the sale of the property the homeowner would have to repay the loan in full and 75 per cent of the increase of the value of their home since taking out the deal.
The rapid rise in house prices since the loans were taken out has meant that some shared appreciation mortgage holders have seen their debt rise 500 per cent on the amount they originally borrowed.
The homeowners allege that they were “for the most part financially unsophisticated”, the bank saw “all but guaranteed high returns” and the mortgages had “trapped borrowers in their homes until their deaths”.
The FT reports that value of the claims could be as much as £50m. Teacher Stern’s case alleges that the mortgages were “fundamentally unsuitable” for consumers and “inherently unfair” under the terms of the Consumer Credit Act 1974.
Teacher Stern also led an action against Barclays on behalf of 37 borrowers who took out shared appreciation mortgages around the same time. The law firm negotiated an out-of-court settlement with Barclays on behalf of the homeowners in June.
Bank of Scotland is defending the claim and denies all the allegations laid against it.
It says all borrowers had independent legal advice and its relationship with the homeowners was fair, according to reports of the court documents.
Lloyds Banking Group has declined to comment on the ongoing case but says it continues to offer support options to all mortgage borrowers facing financial difficulty.
The case is due before the High Court in October.
This challenge has heightened as new business enquiries leave brokers so busy they cannot easily find time to dedicate to existing customers.
It’s completely understandable. In a lot of cases, those customers will automatically return to the broker for obvious reasons: Namely, the customer has a good relationship with the broker, they trust the adviser and know they will do everything to find the best deal.
But even a light-touch approach to managing existing customers will bear fruit over the long-term. This is particularly true for quieter periods, appreciating these times may be rare at the moment.
Life-long customers
Why is it beneficial to have a loyal customer base, when a regular flow of new business is coming in the front door?
It’s about trust.
Should the application hit a problem, for whatever reason, it’s more likely an existing customer will understand – due to their long-standing relationship with the broker – and know they’re doing their best to process the application.
It’s also about knowing your customers. Regular contact allows you to understand your customer’s needs throughout their mortgage term and as their own life situation changes.
They could progress from first-time buyer to home mover to remortgagee. Their needs will change at each stage. They will have requirements for other products throughout their borrowing journey too, with protection and insurance being the obvious two.
There are many tools on the market to help brokers manage existing customers. They enable brokers to handle all of their customer’s financial requirements in one place, including the mortgage, protection and insurance products.
Market updates
These systems can be costly and time consuming, but managing existing customers doesn’t have to be.
It doesn’t have to mean maintaining a complex database. Nor need it be a costly exercise of sending out regular mailings.
Instead, it can be based on a cheaper solution. Using one of the major e-mail suppliers you can automate a contact with your existing customers. One option is to give an update on the mortgage market and your company – whatever feels natural to you and your business. Even sending a straightforward e-mail at renewal can be surprisingly effective.
Or, it could be call reminding your customer that their mortgage product is up for renewal and arranging a follow-up meeting. These days, that could be on Zoom or Teams, but equally could be a simple ‘phone call.
The solution brokers arrive at will depend on their own business requirements, size and budget.
Your existing customers are your most valuable customers. Communicating with them in a simple and effective way will help to protect your business over the long run.
This has become more difficult, with brokers so busy with new business enquiries and simply not having the time to dedicate to existing customers.
This is completely understandable and in a lot of cases, those existing customers would automatically come back to their current broker for the obvious reasons: they have a relationship with that broker, trust the broker, and know the broker will do whatever they can to find the best deal.
However, a light-touch approach to managing your existing customer base could bear fruit over the long-term, particularly in periods when you may be quieter – appreciating that these times are rare.
Building trust
So why is it beneficial to have a loyal customer base, when you have a regular flow of new business coming in the front door?
Well, it goes back to trust. Should the application hit any problems for whatever reason, it is more likely that an existing customer will understand due to their long-standing relationship with you, and understand that you are doing your best for them to process their application.
Furthermore, it allows you to understand your customer’s needs — not just through the life of their mortgage term, but through the life of the customer. Over the course of their potential relationship with you, they may be moving from being a first-time buyer to homemover, to remortgage customer, and their requirements will change at each stage of the process.
Moreover, they will have requirements for other products through this period, protection and insurance being the obvious ones.
Simple solutions
There are clearly very clever, complete customer-centric marketing tools on the market, which will allow you to manage your existing customer base in an effective and efficient manner.
Indeed, such a customer-centric solution would allow you to manage all of your customer’s financial requirements in one place, from the mortgage itself through to protection and insurance as highlighted above.
Although it’s fair to say that these can be quite costly, and also time-consuming if not managed properly.
So let’s be clear, managing your existing customers doesn’t necessarily have to lead to complex databases that you have to maintain. It also doesn’t need to be a costly exercise involving sending regular mailings to your existing customer base.
Indeed, it can involve a cheap email solution using one of the major email suppliers which can automate a contact with your existing customers. Maybe just a regular update on yourselves, the current mortgage market – whatever you feel comfortable with – or just send a manual email at renewal.
It might even be as simple as phone call to your customer to remind them that their mortgage product is up for renewal, and to arrange a follow up meeting, albeit this is likely to be via Zoom or Teams in the current environment. Or even arrange over the telephone.
In summary, the solution you arrive at will be completely dependent on your own business requirements including size and budget, but your existing customers are your most valuable customers.
Communicating with them in a simple and effective way will allow you to protect your business in the long run.
