CHL Mortgages reduces rates; Precise Mortgages releases larger loan products and raises LTV
The five-year fixed option for individuals and limited companies will now begin at 3.10 per cent, down from 3.25 per cent.
Its two-year fixed deal for individuals and limited companies now stands at 3.15 per cent, a decrease from 3.30 per cent, and the five-year fixed rate with a one per cent arrangement fee has gone from 3.45 per cent to 3.30 per cent.
Its two-year fixed product for houses in multiple occupation (HMO) and multi-unit freehold block (MUFB) borrowing will start from 3.39 per cent, a reduction of 0.15 per cent.
The lender’s five-year fixed rate for HMO and MUFB at 75 per cent LTV has decreased from 3.64 per cent to 3.48 per cent.
Its five-year fix for HMO and MUFB borrowers at 75 per cent LTV with a one per cent arrangement fee is now priced at 3.68 per cent.
The lender has also reduced the arrangement fee for its five-year fix for individuals and limited companies at 65 per cent LTV to one per cent.
The interest coverage ratio will start at 125 per cent of the mortgage payment and is calculated at payrate for all five-year fixed purchase and remortgage products.
CHL Mortgages’ commercial director Ross Turrell (pictured) said: “We’ve seen positive movement in the markets with long-term swap rates improving and so have moved quickly to pass these savings onto landlords through our intermediary partners.
“The buy-to-let marketplace is hugely competitive and it’s important to outline our product and service values on an ongoing basis. Passing on these savings – alongside no loading on our valuation fees – demonstrates our commitment to promoting transparency throughout our proposition. Attributes we will continue to build on in H2 2021.”
Precise Mortgages brings in larger loan products and raises BTL limits
Precise Mortgages has reintroduced its maximum 80 per cent LTV limit to buy-to-let lending and brought out a pair of limited edition larger loan products.
The 80 per cent LTV limit applies to two and five-year fixed mortgages, with rates starting from 3.79 per cent, a two per cent product fee and a refund of valuation fee.
The lender has also brought out two limited edition five-year fixed products aimed at customers searching for larger loan sizes.
Rates start at 3.34 per cent and a product fee of £1,995 is applicable for loans between £200,000 and £500,000. The fee for loans between £500,000 and £1m stands at 0.5 per cent.
The BTL range also permits top slicing on personal ownership, limited company, portfolio and HMO applicants, which allows them to use surplus portfolio or disposable income as proof of resilience against financial stress.
Precise Mortgages also allows landlords up to 20 BTL mortgages with a combined value of £10m.
Precise Mortgages’ group sales director Adrian Moloney said: “As a leading specialist lender, we’re pleased to reintroduce up to 80 per cent buy-to-let LTV limits which are designed to offer increased product choice for landlords.
“We’re also pleased to be able to support the larger loan market by offering landlords a choice between a fixed fee product for loans up to £500,000, which may appeal to those with a limited company set-up, or a low percentage fee product for loans up to £1m.”
Top 10 most read mortgage broker stories this week – 09/07/2021
Readers were also interested in news that a solicitor jailed for falsifying forms and stealing £320,00 in stamp duty. There were also discussions about fixed penalty equity release and criteria changes for EU citizens.
Lender’s product changes also proved popular, with HSBC bringing out it lowest ever fixed rate of 0.94 per cent as well as rate cuts at Halifax and Skipton.
Stamp duty fraudster jailed after stealing £380,000
HSBC launches its lowest ever fixed rate
Halifax and Skipton cut rates across ranges
Precise Mortgages reintroduces high LTV products and adverse credit criteria
Criteria changes for EU citizens have disadvantaged other foreign nationals – Marketwatch
LSL hires L&G Mortgage Club’s Hall as new home financial services director
Skipton appoints Harrison head of mortgages with sights set on top 10 lender ranking
More than a third of borrowers believe they can’t get a mortgage if self-employed
House prices drop for first time since January – Halifax
Halifax updates contractor policy to align with IR35 rules
Precise Mortgages reintroduces high LTV products and adverse credit criteria
Customers with historical adverse credit can secure a maximum LTV of up to 85 per cent, up from 75 per cent LTV previously.
Those with more recent adverse credit can get a maximum LTV of 80 per cent, up from 70 per cent LTV.
Highlights of the range include a two-year fixed rate, priced at 3.29 per cent with a maximum LTV of 75 per cent.
There is also a two-year fixed rate at 80 per cent LTV priced at 3.59 per cent, and a two-year deal at 85 per cent LTV with a rate of 4.09 per cent.
The lender will refund valuations up to £360 and has brought back its automated cascade process which allows customers to automatically filter through tiers until an appropriate product is found without the need to reapply.
Precise Mortgages’ group mortgage proposition director Colin Barrett said: “With the increase in house prices and the tapering of stamp duty, this could make a real difference and enable our broker partners to help their customers get the residential mortgage they need.
“With the added benefit of being able to offer a higher LTV limit to applicants with less than perfect credit profiles, we’re providing brokers with specialist lending solutions for customers who may be struggling to find the mortgage they need on the high street.”
OSB Group MD Alan Cleary to retire
Cleary (pictured) has worked with the OSB Group, which is the parent of Precise Mortgages, Kent Reliance for Intermediaries and Interbay Commercial, since 2019 when Charter Court Financial Services (CCFS) combined with OneSavings Bank.
He has worked in the mortgage intermediary market for around 30 years, working at HBOS, Edeus and Exact Mortgage Experts, according to his LinkedIn profile.
Cleary said: “I have loved working in the intermediary mortgage market and have made many friends. I leave OSB Group with fond memories, but I feel now is the time for me to spend my time outside of work with family and friends.”
OSB Group’s chief executive officer said: “Since the point that OSB combined with CCFS, Alan has played a significant role in the successful integration of the two businesses and we’ll miss having him as part of the group executive committee.
“He has all of our very best wishes for a happy and healthy retirement and ahead of the date that he leaves the group, we’ll be working hard to identify an appropriate successor.”
Know Your BDM: Stephen Wrigley, Precise Mortgages and InterBay Commercial
What locations and how many advisers and broker firms do you cover in your role?
I cover the M4 Corridor then up to Leicester in the Midlands. I look after a number of key partners along with anyone else who wishes to talk about bridging or commercial finance products across Precise Mortgages and InterBay Commercial.
How have you changed the way you establish and maintain a good relationship with brokers in the pandemic?
Invariably like many others, I’ve had to switch to video conferencing which at least allows for some face-to-face interaction and my phone has been glued to the side of my head for the last year. I’ve looked to stay in touch with my major accounts on a weekly basis but my broker base knows that I’m only ever a call away.
What personal talent/skill is most valuable in doing your job?
From all the different factors that makes someone a good BDM, I believe the most important is the ability to positively communicate with people at all levels. To do this effectively it means being up to speed in terms of criteria for your own lender as well as the rest of the market so an ability to retain detailed information is also important.
What personal talent/skill would you most like to improve on?
To be able to hit a golf ball. I’ve lost count of the number of golf days I’ve been invited to over the years but have had to politely decline. But anyone in need of a buggy driver, then I’m your man.
Where would you rather be stuck, in bumper-to-bumper traffic or back-to-back Zoom calls?
Ideally, I’d rather be on the move as that’s an aspect of the job that I’ve really missed. I still think face-to-face meetings will play a huge part in our business moving forward as you lose some of the personal interaction on a video call.
Clearly however the world has changed so I can see there being a mixture of both in the future and of course we’ll work to broker’s preferences.
What’s the best bit of career-related advice you’ve ever been given?
If you don’t feel slightly uncomfortable in your existing role then you probably aren’t being challenged enough. There’s always room for learning and improving no matter what your age or level but it’s important to keep a goal in sight.
What is the most quirky/unique property deal you’ve been involved in?
It was actually during my time as a broker when I was dealing with a first-time buyer mortgage for a property in York. It transpired that the property, a former accountancy practice, had Roman skeletons in the basement so it was designated a national monument.
What has been your lockdown coping strategy?
I’m not sure red wine is the correct answer? I’ve set up a home gym in the garage, worked on the garden and started a new hobby “trying” to make house music – lots of fun but not as easy as it sounds.
If you were head of the FCA for the day, what would you change about regulation in the mortgage industry?
Whilst there are a few small changes I might make, I know that those regulations are there to protect customers and have their best interest at heart which I’m fully supportive of.
What was your motivation for choosing business development as a career?
I really enjoy the variety the role brings. I’m fortunate to cover a wide range of specialist lending products spanning across Precise Mortgages and InterBay Commercial so no two days are ever the same.
If you could do any other job in the property sector, what would it be and why?
I’d love to be a developer as it’s so inspiring to see some of the fantastic end results and I’ve always fancied giving it a shot.
What did you want to be growing up?
David Attenborough. Loved anything to do with wildlife although I’m not sure my Bristolian undertones would cut it.
What’s your favourite face mask design/pattern to wear?
Here’s a question I never imagined I would be asked. I guess my Precise Mortgages one is the right answer for today but tomorrow it will probably be InterBay Commercial!
And finally, what’s the strangest question you’ve ever been asked?
Apart from the one above, I was once asked if a client should include all of his livestock on an assets and liabilities form as he was a farmer. I’m not quite sure how the underwriters would view that one.
Precise Mortgages relaunches top slicing for buy to let
The feature is available across the lender’s entire buy–to–let range including individual, limited company, portfolio and homes in multiple occupancy (HMO) products.
It is not available to first-time buyers and applicants who are receiving furlough income or Self-Employment Income Support Scheme (SEISS) payments.
A calculator is also available to help brokers identify how much surplus portfolio or earned income is required to achieve a requested loan size in the case of a shortfall.
Rental income must meet a minimum of 110 per cent interest cover ratio (ICR) of the pay rate of a product for the property to be eligible. Surplus income can then be used to prove the borrower can make up any shortfall against the standard ICR.
Customers can switch to top slicing after they have applied for a mortgage without resubmitting, in case further options are needed due to down valuations.
Adrian Moloney, group sales director at Precise Mortgages, said: “The relaunch of our popular top slicing feature demonstrates how committed we are to supporting the market and our broker partners.
“Top slicing allows landlords greater choice in the way they manage their properties and could help them to optimise their investment opportunities. We’re reintroducing a wider choice of products by unlocking access to our two-year fixed rate, as well as our five-year fixed rate mortgage products.
“These products could be particularly useful for those who may have been restricted from investment opportunities, as well as helping landlords achieve greater flexibility around loan size.”
OSB sees mortgage lending fall 40 per cent and books £20m fraud loss
The lender also booked a £20m loss in its provisional results due to a suspected fraud through one of its outgoing asset finance funding lines, discovered last month.
OSB head of investor relations Alistair Pate confirmed to Mortgage Solutions that the suspected fraud did not involve any of its property funding, which makes up around two-thirds of its £176m in funding lines.
“This particular business where we think something went wrong is in administration now,” Pate said.
“The administrators there have done a really good job and given us and our auditors enough comfort to place a £20m charge in the results.
“As there are legal proceedings underway we have to make sure not to prejudice that – both the fraud squad and regional police are involved,” he added.
An internal review has been completed examining all the lender’s funding lines and policies and it believes there are no other systemic risks present, suggesting this was an isolated one-off case.
OSB has its own asset finance business as well, but does not believe the same risks exist there as in that case it buys the equipment and then leases it back to the customer.
There is also not believed to have been any internal co-operation or assistance in the suspected fraud.
An external review is now being conducted which will further examine the lender’s policies and procedures and then compare them to best practice. It is expected to report its findings to the board in around four weeks.
Pate added: “While this is relatively small compared to our entire £19.2bn loan book, we do take it very seriously.”
BTL lending hit hardest
OSB completed its merger with Charter Court Financial Services (CCFS) in October 2019, bringing together the Kent Reliance and InterBay Commercial brands with the parent company of Precise Mortgages.
The mortgage lending total of £3.8bn, which includes the CCFS Precise Mortgages brand, was down 41 per cent on the combined £6.5bn figure for these firms during the whole of 2019.
Buy-to-let and other non-owner occupier property lending was the hardest hit, down 46 per cent to £1.54bn from £2.85bn at Kent Reliance and InterBay, and down 41 per cent to £1.12bn at Precise.
Residential lending, which is a smaller part of the firm’s book, was down 34.5 per cent to £354.2m at Kent Reliance and InterBay and down 28 per cent to £573.9m at Precise.
OSB directly attributed these drops to the pandemic and said it chose to prioritise underwriting standards instead of volume when markets recovered.
Loan losses up £68m
It also increased its allocation for expected losses through property loans by £68.2m to £111.8m – with the buy-to-let and SME lending losses at Kent Reliance and InterBay expected to grow sharply from £21.6m to £67m.
But the lender added that balances more than three months in arrears remained stable at 0.9 per cent of the book and noted the majority of customers granted Covid-19 payment deferrals had resumed payment.
Payment deferrals peaked in the second quarter at 26,000, representing 28 per cent of the loan book by value, but by 31 December active deferrals accounted for only 1.3 per cent of the group’s loan book by value.
Overall, underlying profit before tax decreased by nine per cent to £346.2m in 2020 from the combined OSB and CCFS figure of £381.1m in 2019.
New business volumes recovered
Andy Golding, CEO of OSB Group (pictured), said the firm entered 2020 with a robust pipeline and application levels in its core businesses were strong prior to Covid-19.
“The initial lockdown inevitably impacted application and completion volumes in the second and third quarters, mirroring the overall mortgage market,” he said.
“As restrictions eased in the middle of the year, we chose to increase lending in our core buy-to-let and residential businesses at higher pricing, albeit with reduced maximum loan to values (LTVs) and loan size.
“We remained vigilant regarding market uncertainty and managed our risk appetite accordingly to maintain strong credit quality. However, I am pleased that new business volumes have now recovered to near pre-Covid levels in these sub-segments, with a strong pipeline of new business.”
OSB sales restructure includes senior departures
Field-based business development managers (BDMs), a new intermediary sales development department, and the specialist finance team will report into group sales director Adrian Moloney.
Meanwhile, the corporate account team, which manages the relationship with mortgage clubs and mortgage networks, will report into group distribution director Roger Morris.
As a result, two long-serving specialist distribution managers, James Briggs and Daniel Watson, have left the lender – confirming the changes on their Linkedin pages.
Briggs had been with the lender for seven years most recently in the bridging finance and second charge arena, while Watson had served four years with the specialist lender.
When asked by Specialist Lending Solutions the lender did not give any details on the change to the size of the team, how many people had left the business or if there would be any further changes as the lenders come together.
They follow former head of sales Jamie Pritchard who confirmed his exit last month, having won the head of sales title at the British Specialist Lending Awards 2020 in October.
Following the restructure, it said heads of intermediary sales development, specialist finance, corporate accounts and two national sales managers have been appointed.
Simon Cockerill has been appointed as head of intermediary sales development across all lending brands.
The role will be to develop and lead a new and enhanced telephony and web-based service that will assist field-based BDMs and enhance the contact strategy to support broker partners.
Emily Machin takes on a new role as head of specialist finance, leading the sales teams covering bridging, second charge and commercial lending for Precise Mortgages and InterBay Commercial.
Liza Campion has taken the position of head of corporate accounts for all lending brands and is responsible for all senior relationships with mortgage club and mortgage network partners.
James Forth and Alan Kimber will take up wider national sales manager roles overseeing the BDM teams for Precise Mortgages and Kent Reliance for Intermediaries respectively.
Writing on LinkedIn, Briggs said: “I’ve had a great seven years, learned a lot and worked with some fantastic people and businesses.
“I’m very grateful to Alan Cleary, Roger Morris, Jamie Pritchard and Adrian Moloney for their support, along with all the other great people I’ve worked with.
“I look forward to a fresh challenge in the New Year, in the meantime I wish all my contacts a healthy and happy New Year.”
Watson also thanked Morris, Pritchard and Moloney after his four year there.
“During this time, I have had the opportunity to work with some fantastic brokers and specialist distributors while expanding my knowledge across the whole specialist market including, buy to let, residential and bridging,” he said.
“It’s been a pleasure working at Precise with some amazing people, in particular the sales team that was formed over my four years.
He added: “I am excited about the next chapter in my career in 2021.”
Commenting on the restructure, group managing director for mortgages Alan Cleary congratulated Cockerill, Machin, Campion, Forth and Kimber on their new roles.
“Through these internal appointments, we’ve captured the experience and knowledge of our best people and utilised their skills to further strengthen our aspiration of becoming a bigger, better and stronger specialist lender,” he said.
“With regards to the people that have exited the business, I wish them all the best for the future.
“Intermediaries have always been fundamental to the success of the group and pivotal in providing borrowers with sound advice, especially during such a challenging time in the mortgage market.”
He added that the changes reinforced its continued commitment to the intermediary market and corporate accounts.
Precise reintroduces refurbishment mortgages
The product involves bridging loan before exiting on to a buy-to-let mortgage, which does not need to be repaid while the refurbishment works are being completed.
Precise said it is designed to help landlords maximise rental yields by refurbishing a property before renting it out, as well as allowing them to take value from the property to reinvest elsewhere.
Landlords can borrow up to 65 per cent LTV on the bridge and 75 per cent of the post-works valuation on the exit buy-to-let mortgage.
The lender added that one application form will produce two offers, one for the bridge and one for the buy to let, as well as two procuration fees.
OneSavings Bank group sales director Adrian Moloney said the relaunch demonstrated its commitment to supporting the market.
“Landlords have traditionally faced difficulty in securing finance to refurbish a property before letting it out,” he said.
“Refurbishment Buy to Let enables them to do so by bringing together the flexibility of bridging finance together with the surety of an exit onto a long-term buy to let once the improvement work has been completed, provided the property meets the expected valuation following refurbishment.”
Precise adds limited edition BTL deals and reintroduces credit impaired range
For its limited edition specials, the lender has reduced fees on its tier one range to 1.25 per cent.
Rates start at 3.14 per cent and are available at up to 70 per cent loan to value – with limited company and personal ownership structures accepted.
Landlords with small and large portfolios can apply and the loans can be used for purchases and remortgages, including houses in multiple occupation (HMO), multi-unit blocks and flats up to 20 storeys high.
Impaired credit landlords
Meanwhile, the lender’s tier two range for landlords that have less than perfect credit profiles has returned.
Precise will accept applicants with credit histories that include defaults and county court judgement (CCJs) if they are registered over 24 months ago.
Products are available at up to 75 per cent LTV, with two-year fixed rates from 3.24 per cent and five-year fixes starting at 3.59 per cent.
It includes HMOs, limited companies and landlords with small or large portfolios.