Evolution Money appoints head of ESG

Evolution Money appoints head of ESG

 

She previously led the vulnerability strategy for the second-charge lending specialist, and was also heavily involved with the Senior Manager and Certification Regime (SMCR) implementation and roll out.

Harrison has more than 20 years’ experience working within financial services and the public sector mainly in HR.

Reporting directly to chief executive, Steve Brilus, Harrison will be developing Evolution’s ESG credentials and enabling the business to become a leading ethical lender that adds value to all stakeholders.

Harrison said: “Our purpose at Evolution is to create financial inclusion by offering bespoke loans to UK homeowners. By developing a comprehensive ESG strategy we can run our business in a way that creates positive change for our employees, the environment, and our community. I am excited to have the opportunity to shape this strategy with the full support of the Board and shareholders.”

Brilus added: “At Evolution we recognise the importance of ESG within the business, and the wider financial services industry, and therefore it makes absolute sense to appoint Sue who will proactively work on, and guide us, through our ESG strategy. In plain English, both myself and the board want to run a business we can be proud of which goes beyond profit and growth.”

Habito and Perenna say current affordability stress test and LTI limit ‘not fit for purpose’

Habito and Perenna say current affordability stress test and LTI limit ‘not fit for purpose’

 

The Bank of England launched a consultation on withdrawing the affordability stress test earlier this year, which states that lenders should ensure borrowers can afford their mortgage if it is three per cent above their reversionary rate.

It said that it would keep the LTI limit, which outlines how much a borrower can borrow relative to income. It typically stands at 4.5 per cent, though lenders can extend this to 15 per cent with new mortgage lending.

The measures were introduced in 2014 by the Bank of England’s Financial Policy Committee (FPC) to strengthen mortgage underwriting standards and guard against increased household debt.

The firms said that current measures were “not fit for purpose when viewed against customer needs”.

They explained that a review of the loan to income (LTI) flow ratio would give specialist lenders opportunities to develop products for underserved markets for those who may need high LTV and LTI products, such as first-time buyers and later life borrowers.

 

Proposed changes

 

The companies have put forward two recommendations. This includes implementing the FPC’s proposal to remove the three per cent stress test, and review the LTI ratio exemption to apply to lenders who originate at 2.5 per cent of annual gross mortgage lending

The other is to eliminate the LTI ratio completely but keep the three per cent affordability stress test for loans with a fixed rate term of five years or less.

The companies said that either action would improve competitiveness in the mortgage market, even the playing field for specialist lenders and high street lenders and improve customer choice.

Alan Fitzpatrick (pictured), vice president of lending operations at Habito, said that house prices had “increased substantially” and many prospective homeowners had not been able to keep pace as the “lending landscape hasn’t moved far enough forwards”.

He pointed to research done by the firm, which showed that 54 per cent of UK homeowners had been limited by what they could borrow for a mortgage, even if they could afford to pay more.

“Our affordability recommendations come at a time when interest rates are rising, the cost of living is top of mind and we simply need better and more sophisticated ways to help people finance their homes,” he said.

Arjan Verbeek, chief executive of Perenna, said: “We are supportive of the FPC’s focus on managing excessive leverage and their own assessment demonstrates the affordability measure alone can contribute to it.

“If we want to address today and tomorrow’s challenges with the right level of precision, we believe the LTI flow ratio needs significant amendment or even withdrawal. By doing so, the financial services sector can introduce much needed product innovation and competition.”

The British Mortgage Awards 2022 finalists announced

The British Mortgage Awards 2022 finalists announced

 

The awards recognise exceptional individuals in the mortgage sector. Congratulations and good luck to all the finalists. 

 

Broker  

Administrator sponsored by Pepper Money 

Amy Baptiste, LDNfinance 

Chantelle Haley, Brightstar Financial 

Becca Howlett, The Mortgage Broker 

 

Buy to Let sponsored by Paragon 

Graeme Lockwood, Alexander Hall Associates 

Sy Nathan, Dynamo 

Fiona Simpson, The Mortgage Broker 

 

Complex Credit sponsored by Kent Reliance for Intermediaries  

Edward Cook, Wilson Cook 

Stuart Ockleford, Coreco 

Jodi Spreadbury, The Mortgage Broker 

 

First-Time Buyer sponsored by Barclays 

Annabel Dixon, Alexander Hall Associates 

Tara Panayi, Just Mortgages 

Jamie Scott, L&C Mortgages 

 

General Insurance sponsored by Uinsure

Kelsey Harrison, Mortgage Advice Bureau

Anais Middleton, Heron Financial 

Gavin Poulton, Just Mortgages 

 

Large Loans 

Andrew Chalton, LDNfinance 

Nadeen Hall, Mortgage Advice Bureau 

Julian Ingall, Coreco 

 

Later Life Lending 

Darren Johncock, HFMC Wealth 

Matthew Phillips, Age Partnership 

Lee Staniford, Equity Release Experts 

 

New Build sponsored by Skipton Building Society for Intermediaries  

Adam Davis, Just Mortgages 

Shafeen Daya, Alexander Hall Associates 

Scott Richford, Mortgage Advice Bureau 

 

Overall 

Gemma Pritchard, Countrywide Mortgages 

Danny Smith, Mortgage Advice Bureau 

Matthew Tilbury, Just Mortgages 

 

Protection sponsored by HSBC Life  

Wendy Whyte, First Mortgage 

Corey Greenway, Mortgage Advice Bureau 

Apurve Kaushik, Allen & Harris 

 

Rising Star – Distributor sponsored by Coventry for Intermediaries 

Debra Bowskill, Mortgage Advice Bureau 

Gethin Davies, Just Mortgages 

George Sanford, Vibe Finance 

 

Business Leader 

Broker (fewer than 10 advisers) sponsored by HSBC UK 

Adrian Anderson, Anderson Harris 

Joe Childes, Right Choice Mortgages 

Kim McGinley, Vibe Specialist Finance 

 

Broker (11 to 50 advisers) sponsored by NatWest Intermediary Solutions  

Andrew Montlake, Coreco 

Anthony Rose, LDNfinance 

Sarah Tucker, The Mortgage Mum 

 

Broker (over 51 advisers) sponsored by Bank of Ireland for Intermediaries 

Steve Auckland, Age Partnership 

Peter Brodnicki, Mortgage Advice Bureau 

John Phillips, Just Mortgages 

 

Conveyancer 

Nick Chadbourne, LMS 

Karen Rodrigues, eConveyancer 

Alan Young, Landmark Optimus 

 

Development and Innovation Advocate 

Maria Harris, Digital Cat Consultancy 

Matt Lowndes, Mortgage Advice Bureau 

Richard Merrett, Simplybiz Mortgages 

 

Protection or General Insurance Provider sponsored by Uinsure 

Steve Bryan, The Exeter 

Louise Colley, Zurich Intermediary Group 

Martin Schultheiss, Uinsure 

 

Intermediary Lender (less than £5bn gross lending p.a) sponsored by Sesame 

Steve Cox, Fleet Mortgages 

John Goodall, Landbay 

Charles Morley, Metro Bank 

 

Intermediary Lender (£5bn or more gross lending p.a) sponsored by PMS  

Esther Dijkstra, Lloyds Banking Group 

Jeremy Duncombe, Accord Mortgages 

Chris Pearson, HSBC UK 

 

Mortgage Club sponsored by BM Solutions  

Robert Hunt, Paradigm Mortgage Services 

Lisa Martin, TMA Club 

Martin Reynolds, Simplybiz Mortgages 

 

Network sponsored by Halifax Intermediaries  

Rob Clifford, Stonebridge 

Ross Liston, Sesame 

Toni Smith, Primis Mortgage Network 

 

Specialist Distribution sponsored by Precise Mortgages 

Mobeen Akram, Mortgage Advice Bureau 

William Lloyd-Hayward, Brightstar Financial 

Liz Syms, Connect for Intermediaries

 

Surveyor sponsored by Mortgage Brain  

Matthew Cumber, Countrywide Surveying Services 

Peter Hughes, Gateway Surveyors 

Simon Jackson, SDL Surveying 

 

Lender 

Business Development sponsored by Alexander Hall Associates

Nick Jury, Halifax Intermediaries 

Jason Neighbour, Santander for intermediaries 

Laura Underdown, HSBC UK 

 

Head of Sales or National Accounts 

Nicola Goldie, Virgin Money 

Rachael Hunnisett, Skipton Building Society for Intermediaries 

Kay Westgarth, Standard Life Home Finance 

 

Operations/Credit Risk 

Jon Cole, HSBC UK 

Chris Delaney, Santander for intermediaries 

Katia Petlitskaya, Clydesdale Bank 

 

Telephony Relationship Manager sponsored by The Openwork Partnership 

Alison Hurley, Metro Bank 

Ross Macleod, Virgin Money 

Achile Mayala, HSBC UK 

Top 10 most read mortgage broker stories this week – 29/04/2022

Top 10 most read mortgage broker stories this week – 29/04/2022

This was followed by the news that Molo Finance had temporarily suspended its buy-to-let products. The lender cited capital market uncertainty and said that it would refund valuations that had been paid.

People moves also piqued readers interest, with former Bank of Ireland head Iain Smith going to State Bank of India and HSBC’s Amanda Fenner taking on the role of head of Halifax Intermediaries and Scottish Widows Bank.

Chancellor Rishi Sunak warns some mortgage payments could jump by £1,000 – reports

Molo Finance temporarily suspends buy-to-let products

Lloyds warns over inflation and braces for loan defaults

Almost half of UK property transactions down valued during pandemic – HBB Solutions

Former BoI intermediary head Iain Smith joins State Bank of India UK – exclusive

Starling Bank raises £130.5m for acquisition war chest with eye on mortgage lenders

Lloyds appoints HSBC’s Amanda Fenner as head of Halifax Intermediaries and Scottish Widows Bank

Santander lends £9.5bn of gross mortgages in Q1

Homes sell faster than ever as prices hit new high – Rightmove

Growing inheritance tax worries offer brokers opportunity ‒ analysis

Minority borrowers face hurdles when getting a mortgage – analysis

Starling Bank raises £130.5m for acquisition war chest with eye on mortgage lenders

Starling Bank raises £130.5m for acquisition war chest with eye on mortgage lenders

The fundraise was at a pre-money valuation of £2.5bn, with Goldman Sachs, Fidelity Management and Research Company, Qatar Investment Authority, Harold McPike and RPMI Railpen all participating in the round.

The bank said that the funding would be used to “continue our growth” and “build a war chest” for acquisitions. A Starling Bank spokesperson said that it was looking at a “number of potential targets”.

The spokesperson said: “We are pursuing a targeted merger and acquisition strategy focusing on selected lending originators; that may include mortgage lenders.”

The bank now has a surplus capital of nearly £400m.

Last year, the bank acquired Fleet Mortgages in a £50m transaction, making it the sole funder of the lender’s future originations.

Fleet Mortgages in turn would be able to access Starling’s deposit customer base via the deal.

It marked Starling’s entrance into the mortgage market, and at the time said it was part of its plans to grow its lending through mergers and acquisitions and forward-flow arrangements, where it will purchase loans originated by other providers.

The bank was also reported to be interested in acquiring Kensington Mortgages’ platform earlier this year, along with Barclays, M&G and Pimco.

Upping the notice period when product pricing shifts – Carrasco

Upping the notice period when product pricing shifts – Carrasco

This wasn’t surprising in itself because I’m fully aware of the quality and robustness of the propositions represented, but given some of the mood music being played around the property market at present, particularly in terms of rising rates and the like, it was heartening to hear such positivity.

Essentially, these firms are incredibly positive about the mortgage market and what they intend to achieve this year. The suggestion was that January had started off relatively slowly for some, but as the weeks have passed, they have been dealing with an increasing level of enquiries which are now turning into applications and completions.

As you might expect, remortgage activity was tending to drive that business, but that’s not to say purchasing isn’t also solid. Evidently, supply remains the biggest issue here but the common sentiment focused on the homes that are coming to market selling in double-quick time.

Purchase demand still prevalent 

Perhaps this shows most clearly how the purchase demand that drove our market in 2021 hasn’t really gone away, and that even without any sort of stamp duty incentive – unless you’re a first-time buyer – this is still a market in which people want to buy and move.

Supply levels will of course determine just how much business is written, but it’s also true to say that rates, specifically rate movements, are likely to drive further remortgage activity. Especially given the direction of travel here is upwards.

At present, we are in a changeable situation with regards to rates. Historically, of course, we’re still at incredibly low levels. This is good news for the borrower as is the ultra-competitive market we have, the lending targets that have to be hit throughout the year and the anticipation that due to this, we may not see full rate increases being translated into product pricing.

Rising rate opportunities 

Upward rate movements can be used by advisers in terms of marketing activity to existing borrowers, particularly those most impacted by rises such as standard variable rate and tracker borrowers, and those who might be coming to the end of special rates.

In that sense, rate rises – bank base rate (BBR) or swaps – might not be the harbinger of doom some are making them out to be.

Of course, rate rises do often mean rate changes at a lender level. There were certain frustrations expressed at our forum, notably around the short notice periods some lenders are providing when changing rates and pulling products.

On that matter, we appreciate that BBR and swap rates do change and lenders have to react quickly, especially in certain areas where no lender wants to be the last one standing and inundated with business it can’t service.

Rate changes are part of the mortgage ‘game’ and it was clear from our adviser discussion that there are still plenty of opportunities to be secured from a rising environment, however long this might last.

Pricing shifts all the time, but advisers would certainly like to be forewarned and therefore forearmed as much as possible when lenders do make their moves, and they have to accept their own responsibility for managing client expectations in that regard.

Lenders are jumping ahead of the UK Government on green pledges

Lenders are jumping ahead of the UK Government on green pledges

Specialist lender OSB Group has joined the United Nations Net Zero Banking Alliance (NZBA), and is currently developing a transition plan.

The group has pledged to achieve net zero emissions through its operating footprint by 2030, expanding to zero emissions across its business activities including its products and services, for instance emissions from the properties it lends on, by 2050.

OSB says it fits in with the group’s ethos “to help our customers, colleagues and communities prosper” as it “recognises that urgently tackling climate change and promoting green finance underpins the future prosperity of the UK.”

From 2022, it will announce products and services to support and invest in greener finance products and lifestyle and home changes; however did not provide detail on what those products might actually look like, nor how they will help UK landlords and homeowners become greener.

OSB is however taking on carbon mitigation schemes focussed on decarbonising the housing sector abroad, including a solar energy project in India, and a smaller project that mechanically compresses bricks, avoiding the need for firing and thus saving around 14 trees per house built.

Andy Golding, CEO, OSB Group, said: “We have joined the Net Zero Banking Alliance and committed to assist with our industry’s efforts to achieve its decarbonisation goals.

“We believe that even though there is much detail still to be defined in the UK’s pledge to cut greenhouse gas emissions, it’s critical for us to take a committed stance. I’m looking forward to the journey ahead of us.”

Brokers end up with unexpected lender after using affordability tools – MBT

Brokers end up with unexpected lender after using affordability tools – MBT

 

Nine out of 10 brokers end up recommending an unexpected lender when assessing affordability from the start, Mortgage Broker Tools found in a survey of 400 brokers.

Almost eight out of 10 brokers said they regularly use mortgage affordability platforms to help with their cases.

Tanya Toumadj, chief executive at Mortgage Broker Tools (pictured), said: “At MBT, we process a huge amount of data from live broker cases, which tells us that the choice of lender can make a significant difference to the loan size that is offered to a customer.

“So, we wanted to better understand how brokers embed affordability research into their advice process and whether this really does influence their choice of lender.

“This study, which was carried out independently, offers conclusive evidence that affordability research at the outset is now commonplace amongst brokers and that it has a significant influence on their choice of lender, with nine in 10 brokers saying they have recommended a lender they had not previously considered based on affordability.”

Short-term lending is solution for borrowers with outstanding balances at mortgage-end – Rubins

Short-term lending is solution for borrowers with outstanding balances at mortgage-end – Rubins

 

After 25 years of paying back the loan to the building society – after often many years on a standard variable rate – the final monthly instalment would be paid, the balance settled and the house owned outright. Borrowers could celebrate with a bottle of bubbly as they studied first-hand the deeds to their property.

Nowadays, things are often very different and don’t provide a reason to open the fizz. Sadly, many people reach the end of the mortgage term with an outstanding balance which they are unable to settle; and a large number can’t remortgage either.

 

Rise and fall of interest-only mortgages

Of course, the largest single cause of this predicament is the interest-only mortgage. While they came to prominence in the 1980s with the rise of the endowment mortgage, their popularity lasted longer than endowments and the subsequent mis-selling scandal.

While the figures are steadily reducing, the most recent statistics from UK Finance show there were still 908,000 “pure” interest-only homeowner mortgages outstanding at the end of 2020.

The good news is that the number of interest-only loans set to mature by 2027, the second tranche of interest-only loans identified by the Financial Services Authority (FSA) in previous research, shrank by 56,000 in 2020 to 457,000 loans, a fall of 10.9 per cent; but that still leaves an awful lot of borrowers who could find themselves facing a serious issue over the next five years.

 

Options for borrowers

The sad fact is that, despite all efforts to convince them otherwise, borrowers generally don’t believe their mortgage lender won’t offer to refinance them at the end of their term.

If they have adverse credit, are deemed too old or don’t have the requisite income, then the borrower may simply not be eligible for a term extension. And other lenders may equally be put off as well.

So what are the other options available? Firstly, a property sale. If the borrower has another property which they could sell then they could use the proceeds to pay off the mortgage. If not, then they could sell their home and downsize. However, this option may take many months.

Other options may include using a pension, savings or other investments to raise finance. Unfortunately, many borrowers will simply not have enough (or any) of these in order to make up their mortgage shortfall.

The only real option is to sell up and downsize or rent, but time has run out.

A moment of reckoning will be upon the borrower before they know it. They can quickly find themselves being informed by their mortgage lender that possession proceeding have been started. One frantic phone call to the lender later and they will realise that the mortgage company is not being vexatious, but simply following the procedures it is required to do so by the regulator.

 

Short-term lending can provide ‘breathing space’

All is not lost, however. In such circumstances, short-term lending can be the solution. The use of a regulated bridging loan can provide much needed breathing space for the borrower to find a suitable solution rather than make a distressed decision. They will then have a window for a broker to possibly find a longer-term finance solution (such as a retirement lending product) or it will give them time – up to 12 months – to sell the house.

At Alternative Bridging Corporation, we come across many such cases. So long as a lender can be assured of the exit strategy, they can act quickly to stave off possession proceedings and keep the borrower with a roof over their heads.

This is just one of many real-life scenarios that bridging finance can play its part in solving and can provide genuine reason for celebration.

Lender liquidity and competition drives product diversity – Duncombe

Lender liquidity and competition drives product diversity – Duncombe

Nor is there right or wrong – ultimately choice in the market for brokers and their clients is a good thing; it keeps competition healthy and it means there’s always likely to be someone to meet the needs of a wide range of borrowers.

Is rate still king? It might seem like an obvious yes, but not necessarily. Clients – potentially squeezed by the rising cost of living – are keen to keep monthly repayments down and drive a hard bargain for their adviser to deliver the cheapest rate. That’s understandable, basic psychology makes us lean towards lower numbers where outgoings are concerned, but we know it’s important to consider the whole picture, beyond just rate, when advising clients which lender to commit to for the coming years.

 

Behind the scenes of funding

There’s currently a lot of liquidity in the market. Whether it’s the ring-fenced banks, access to cheap government funding, increased customer savings during the pandemic, or the wholesale funding market re-opening, many lenders are holding far more cash than normal. In the last 12 months, and with a historically low base rate, many have been able to pull a price lever to increase competition in the mortgage market, which has contributed to the record-low mortgage rates we’ve witnessed.

But there’s more to funding these rates than probably meets the eye. Lenders use diverse funding methods to provide greater stability, consistency and flexibility, usually through a combination of wholesale markets, government funding schemes and in our case, as a building society, a simple business model that uses members’ savings to enable mortgage customers to buy a home.

We balance the income we generate with paying interest to our savers that’s above the market average, but with no external shareholders to satisfy, profits can be reinvested in the business to improve our offering to brokers and their clients, our wider customers and members as well as our technology, systems and processes. We invest in our underwriting and sales team, giving brokers access to both and adopting a hands-on, common sense approach to lending.

This model is more expensive but means we can be more flexible and lend in more purposeful sectors. For example, while others had record-low mortgage rates for low loan to value (LTV) remortgages, we were able to lead with support at higher LTVs throughout the pandemic.

As lenders, though the strategies differ, it’s complementary for the market as it means together, we serve a wider range of needs.

 

Differentiation benefits the market

The great thing about the market is that not all lenders are the same. There’s room for many different strategies, and while we know it’s important to support brokers with competitive rates for their clients, it’s not just about price. Instead, we aim to add value in other ways, such as seeing cases on an individual basis with no tick-box exercises and computer-says-no handling. We’re told time and again that for many, that’s priceless.

So, while we all work towards the same end goal, the make-up of the products we see every day to reach that goal are far from the same.