Adverse credit tops August broker ‘tricky case’ list
Primis Mortgage Network helped advisers with 1,903 queries in August, with the most common query around adverse credit.
The network said that this was partially due to more mortgage options becoming available to those with adverse credit, which could include missed payments, debt management plans, county court judgements or bankruptcy.
It said this showed an increase in lender confidence as pandemic recovery continued.
According to Primis, it is the first time since February this year that adverse credit appeared as a leading query.
Chris Sykes, Private Finance’s associate director and mortgage consultant, said: “It would make sense after the last 18 months that there is more adverse credit in the market.
“This is something we predicted at the start of the pandemic and we feel more lenders need to be understanding and manual with small blips rather than offering a mainstream automatic decline model, where explanations are often not listened to.”
Pepper Money’s sales director Paul Adams said that it was “no surprise” to see an increase in adverse credit enquiries given the upheaval of the last year and a half.
He pointed to the Pepper Money’s adverse credit study which found that 36 per cent had seen a fall in income during the pandemic and 24 per cent had increased their credit use.
Self-employed mortgages also ranked in the top four most common broker queries in August, with Primis attributing this to changing lender criteria and new products.
Craig Scott, mortgage broker at Specialist Mortgages, said that he had seen lenders loosening criteria when it came to government support, with many now putting in a time scale on when it was used to improve flexibility.
However, he said that often the loan to value was still a “great source of frustration” as they were typically lower, and lenders did not have a timeframe as to when this might change.
He added that in some cases it may be challenging for company directors to secure mortgages as their income might be complex and require more underwriting and service.
Sykes said: “It is such a complex market really you need a broker if you are self-employed, we are navigating explanations around grants, loans, talking lenders through how businesses have changed during the pandemic. It is a tough market still, but it is improving daily as lenders get more understanding of Covid-19 impacts.”
Later life lending
Brokers also submitted a lot of queries around later life lending, especially around gifted deposits where parents help their children purchase property.
Primis added that there had been an increased number of guarantor mortgage and joint mortgage sole proprietor enquiries.
Sykes said that Private Finance has seen a “fair rise” in these kinds of enquiries but it was “tough and often a specialist market”.
He said: “These are always difficult as expectations versus reality can be quite different in this bracket, for example I had a client who recently retired earlier than planned from a corporate job on well over £100,ooo.
“He needs to review his mortgage but doesn’t have a pension yet so is just living off investments. Luckily we have lenders that can take an asset slice view on his investments until his pension kicks in.”
Expat BTL enquiries
Another common query was around expat BTL enquiries, but Primis warned that there were fears lenders may not lend to expats following Brexit.
Scott said that expat BTL mortgages were still popular, especially with a limited company structure due to the tax savings.
He added that many foreign investors still saw London and the South East as key areas in which to purchase and invest in property.
Cladding, JBSP and expat deals add to rising number of broker queries – Primis
Questions most commonly focused on cladding, joint borrower sole proprietor products and expat borrowing.
Primis’s product desk answered 2,123 queries in total in July, compared to a monthly average of 2,083 last year.
The cladding issue drew questions trying to clear up confusion about criteria for EWS1 forms. The joint borrower sole proprietor queries reflected growing numbers of parents looking to help offspring get on the property ladder.
Finally, expat questions related to concerns that lenders may stop offering products to these borrowers owing to Brexit and this would preclude those clients from switching deals.
Vikki Jefferies, proposition director at Primis (pictured), said: “These figures demonstrate the success of our product desk, with the increase on July last year especially interesting given the high levels of market uncertainty at that time. Obviously we’re very pleased brokers have continued finding value in our support.
“There are still challenges in the market and we will continue to invest in our broker relationships and provide support through our product desk and virtual experts webpage,” Jefferies added.
Primis and Eligible tie-up offers engagement platform Retain to network’s ARs
Retain is a personalised client platform designed to help brokers retain business without taking up time or lengthening the to do list.
Primis members already using Toolbox, the network’s customer relationship management system, will benefit from a new integration that plugs directly into Retain. Communications with clients begin automatically when applications complete.
Retain automatically keeps in contact with clients throughout their mortgage cycle with information designed to educate. The system is able to learn about the client and their needs as well as send communications relevant to their situation, in the broker firm’s branded livery.
It notifies brokers when clients are ready to talk about new options.
The system lets advisers see a real-time view of their entire client base, including the specific factors that each client cares about.
The system is design to free up brokers so that they can focus on providing quality advice and submitting business.
Vikki Jefferies (pictured), proposition director at Primis, said: “Our partnership with Eligible will provide our AR firms with tools to save time and drive client retention. That’s an asset to any adviser, particularly those looking to grow their business.”
“I hope to see brokers embrace the benefits, and continue to provide the best possible customer outcomes,” Jefferies added.
Rameez Zafar, chief executive at Eligible, said: “Our client retention solution gives time back to advisers, letting them focus on submitting business. We look forward to continue working with Primis firms already using Retain, as well as getting to know new firms through this partnership.”
Contractor and furlough mortgages hot topics as Primis desk sees record call numbers
The product desk received 2,823 calls last month compared to an average of 2,083 broker queries a month in 2020.
The most common questions from brokers involved lending for contractors, furloughed borrowers, buy-to-let purchases for first-time buyers and non-homeowners, as well as product options for regulated and limited company buy-to-let investors.
The pandemic has continued to affect the rate of mortgage applications. In January, Primis reported an 18 per cent rise in adviser enquiries relating to poor credit, income protection and furloughed income.
Last month, the nature of enquiries were slightly different with a bigger focus on the self-employed as well as borrowers on full or partial furlough. Furthermore, brokers have seen a spike in mortgage queries from first-time landlords.
Vikki Jefferies, (pictured), proposition director at Primis, said: “Today’s figures show just how crucial Primis’ product desk is, not only for supporting brokers with client queries, but also educating them on key themes in the mortgage market so they can grow their confidence in these areas.
“It is really encouraging to see that advisers were using the product desk throughout March to support them with both new and ongoing queries, and then showcasing their learnings in conversations with clients.
“Ensuring that operational processes are running efficiently will deliver significant benefits for brokers’ businesses, so I’d encourage the adviser community to take advantage of the resources available to enhance their business and support their client work going forwards.”
Simon Embley to lead new broker Pivotal Growth as he steps down as LSL chair
The new advice firm has been established as part of a £200m joint venture between LSL and investors Pollen Street Capital.
LSL owns companies in property financial services, surveying and estate agency, including mortgage network Primis, e.surv and Your Move.
The investment in debt and equity will enable Pivotal Growth to acquire other mortgage firms.
Pivotal Growth has entered a long-term arrangement with Primis, and firms acquired in future will be expected to join the network.
LSL has committed up to £33.5m and Pollen Street Capital up to £62.4m to support acquisitions. This will be supplemented by external debt finance in Pivotal Growth, with a view to an exit over three to six years.
LSL and Pollen Street Capital’s investments of £19.1m each will give them a 47.8 per cent equity share of Pivotal Growth.
The additional investment of £14.4m from LSL and £43.3m from Pollen Street Capital will be delivered by way of loan notes.
Embley has won permission from the LSL board to invest £4m into Pivotal Growth for a 4.4 per cent share. He departs as non-executive chairman on 28 April, but will remain on the board as a non-executive director.
Jane Cross, previously chief risk officer of Primis and managing director of E.surv, has been appointed chief operating officer.
David Copland, previously director of mortgage services at LSL, will become strategy and business development director.
LSL chief executive David Stewart, and Ian Gascoigne, partner at Pollen Street Capital, will become directors of Pivotal Growth.
Stewart said: “The launch of Pivotal Growth marks a significant milestone in the implementation of the group’s strategy. It follows other significant steps we have taken to strengthen our management team, and recent acquisitions of Mortgage Gym and Direct Life & Pension Services.
“The Pivotal Growth joint venture with Pollen Street Capital will enable us to establish a leading position in the provision of direct-to-consumer advice and underpins the position of our Primis network.
“I look forward to describing our plans further when we release our preliminary results on 28 April.”
Gascoigne added: “We are highly enthusiastic to support Simon Embley and his team in the launch of Pivotal Growth.
“We believe that Pivotal Growth has potential to quickly become a market leader, while delivering pioneering levels of innovation and the highest standards of customer service in the industry.”
Help to Buy and shared ownership demand reaches high among first-time buyers
Analysis from Reallymoving showed this was up from 15 per cent in 2019 and 13 per cent in 2018.
Shared ownership appeared to be the favoured option for first-time buyers as it accounted for 10 per cent of all transactions among this group compared to the seven per cent who used Help to Buy.
Rob Houghton, CEO of Reallymoving, said: “Based on the current average first-time buyer purchase price of £249,000 in the UK, buying a 10 per cent stake in a shared ownership property could require a five per cent deposit of just £12,460 – an attractive prospect for those looking for an affordable way onto the housing ladder.
“We’re now seeing record levels of first-time buyers using either shared ownership or Help to Buy, with the impact of the pandemic boosting demand further as buyers struggle to raise even larger deposits required by lenders, on top of higher house prices.”
Help to Buy use
Figures released by the Ministry of Housing, Communities and Local Government (MHCLG) today also showed a drive in first-time buyer Help to Buy use as during Q3, 84 per cent of purchases came from this group.
During the quarter, 13,211 properties were purchased using the scheme with those buying their first home accounting for 11,150 transactions.
The use of the scheme in Q3 more than doubled from the 5,827 completions in Q2, likely reflecting the closure of the property market due to the pandemic.
Unsurprisingly, demand for Help to Buy dipped to 43,617 purchases in the year to 30 September, down from a peak of 52,924 in 2019.
Record high property prices seen over the year were reflected in Help to Buy purchases. The average property price for first-time buyers using the scheme in the year to 30 September was £279,995 – £10,000 more than the same period a year before. Meanwhile, homemovers paid an average of £346,995 compared to £329,995 in 2019.
Vikki Jefferies, proposition director at Primis Mortgage Network, said: ‘’The government’s Help to Buy scheme continues to be hugely popular among borrowers – particularly first-time buyers.
“Current demand is also likely to continue as the financial impact of Covid-19 on households becomes clearer and more first-time buyers look to take advantage of government support to help them get onto the property ladder.”
She added: “There is a real opportunity here for advisers. By supporting borrowers with their decision-making, advisers will ensure that borrowers are knowledgeable about the government support that is available to them.
“By sharing this information, advisers will be able to give first-time buyers the confidence they need to take their first steps onto the property ladder and ensure that, ultimately, this group can contribute to the ongoing recovery of the housing market.’’
Primis expands into equity release market with lender panel
The network said the panel will be representative of the whole of the market and lender additions would be announced in due course.
It has also been training support staff to assist brokers in completing equity release cases.
Vikki Jefferies (pictured), proposition director at Primis, said one of the firm’s key focuses has been enhancing its later life lending proposition to ensure a greater number of advisers can better support their clients in this area.
“This includes equipping our support staff with the necessary knowledge and tools to help them in their conversations with advisers, and ensuring the necessary processes are in place to help us best fulfil the needs of borrowers,” she said.
“To this end, it is fantastic to be able to announce that Primis has launched in the lifetime mortgage space.
“As we grow the panel over the coming months, the robust supervision of advisers, adherence to strong processes and honing the expertise of our intermediary partners and support staff will continue to be priorities for us.”
She added that maintaining and cultivating strong relationships with equity release providers will also be a key goal so that brokers were in a strong position to support clients throughout their later life.
Primis is a member of the Equity Release Council (ERC) having qualified for full membership in 2019 and has already been supporting later life lending through retirement interest-only lenders.
The equity release advice market has been the subject of much scrutiny from the Financial Conduct Authority (FCA) over the last year with further investigations to take place.
In response the ERC has issued guidance for firms in advice processes while Association of Mortgage Intermediaries (AMI) chief executive Robert Sinclair warned the sector not to take the issue lightly.
L&G Mortgage Club and Primis make panel additions – round-up
Legal & General Mortgage Club has added Canada Life and Just to its later-life lending panel.
Through Just, members can access lifetime mortgage products which provide an option to pay some or all of the monthly interest, and customers also have the potential to borrow more based on medical and lifestyle conditions.
Canada Life’s range includes lifetime mortgages that can be secured on a customer’s main residence or second home.
The lender also provides solutions where borrowers can choose to make interest payments, service the capital and interest, or let the interest roll-up.
Paul Hopton (pictured), key relationship manager at Legal & General Mortgage Club, said: “We are delighted to announce that Canada Life and Just are the latest companies to join our lender panel.
“Both lenders play a major role in the later life market and their addition to our proposition brings even greater choice to advisers using Legal & General Mortgage Club.”
Primis Mortgage Network
Primis Mortgage Network has partnered with Foundation Home Loans, allowing its advisers to access ranges for residential borrowers with complex criteria and buy-to-let landlords.
Vikki Jefferies, proposition director at Primis Mortgage Network, said: “ From today, our advisers will have access to a wider range of tailored solutions to provide their clients and, ultimately, be better equipped to serve a growing number of ‘non-vanilla’ borrowers.
“We are confident that with Foundation’s extensive proposition, Primis brokers will be able to bolster their own offerings in this area and further support customers, both during and after the coronavirus crisis.”
Grant Hendry, head of national accounts at Foundation Home Loans, added: “The specialist mortgage market has shown great resilience over the past four months and we, as a lender, have had to adapt and evolve accordingly over this period.
“This partnership will help us in fulfilling our ambitious plans for 2020 and beyond, and we are looking forward to working closely with Primis’ member firms to provide much-needed specialist solutions to landlords and those borrowers who are not able to secure residential borrowing via high street lending routes.”
Primis and Paradigm launch Covid-19 support tools
Primis Mortgage Network has launched a support hub within its customer relationship management (CRM) system, Toolbox, to help its appointed representatives source updated mortgage information.
The hub will include real time lender and market updates, including product rate and criteria changes and information on government guidelines regarding the pandemic.
The existing CRM has been updated to include Toolbox making it immediately available to the Primis brokers. The hub will be reviewed in the coming weeks and months to ensure it is kept at a high standard, the network said.
Vikki Jefferies (pictured), proposition director at Primis, said: “During the Covid-19 crisis, it is imperative that brokers have the necessary tools and support in place to help them manage their business, staff and clients from their homes.
“With the market changing daily, the launch of our new support hub within Toolbox will provide all of our AR firms with access to live information on lenders and wider industry news that can assist them in their conversations with clients.”
Paradigm launches protection panel updates
Paradigm Protect – part of Paradigm Mortgage Services – has launched a Covid-19 document with details on how its panel of protection providers is dealing with the pandemic.
In the ‘Protection Matrix’ document, Paradigm Protect cover how individual providers are dealing with applications from clients with Covid-19, the product, policy and process changes made as a result of the virus.
It also gives information on how providers are dealing with claims across individual products, and the contact details and support that is available during this period.
Those providers currently in the matrix include Aegon, AIG, Aviva, Canada Life, The Exeter, Guardian, Legal & General, LV=, Royal London, Scottish Widows, Vitality and Zurich.
The document will be updated as changes happen.
Also featured on the page are Paradigm’s five ‘top tips’ for intermediaries to consider when discussing protection with clients under the current circumstances.
Paradigm Mortgage Services has also recently launched three lender matrices which feature recent criteria and product details from its panel. These can be found on its Covid-19 support page.
Mike Allison, head of protection at Paradigm, said: “We’re acutely aware this is a fast-moving situation and providers are having to establish new processes for dealing with new applications, existing customers and claims.
“As providers are making changes daily, we’ll be updating the matrix regularly to ensure it remains a useful resource for our members. It’s essential that advisers keep as up to date as possible and we believe this will help enormously in the current challenging environment.”
Primis adds Bluestone and Hodge to lender panel
The partnership will give advisers in the Primis network access to Bluestone’s full residential and buy-to-let suite of products.
This includes Bluestone’s fee-free remortgage offering geared towards borrowers consolidating debts, which was launched earlier this year.
Hodge’s mortgage products now available to Primis’s brokers include its retirement interest only (RIO) range, equity release and portfolio buy-to-let products.
The network will also have access to the new Hodge fixed-for-life RIO mortgage, which allows customers to fix their mortgage rate for the lifetime of the mortgage.
Steve Seal, managing director of Bluestone Mortgages, said: “Partnering with Primis will extend our distribution and ensure that its advisers are equipped with competitive solutions to serve a growing number of customers who don’t fit the vanilla mould of high street banks.”
Emma Graham, sales director at Hodge, added that the lender looked forward to working with Primis’s network to help clients “find the right products for their needs”.
Vikki Jefferies, proposition director at Primis, said: “Bluestone’s wealth of knowledge and experience in the specialist lending market will provide our members with greater access to lending solutions tailored for customers with niche requirements, and we look forward to helping more of our advisers bolster their offerings in this area.”
On Hodge, she added: “The lifetime mortgage market is constantly evolving to meet the demands of modern-day retirees, making it paramount that intermediaries are ready and able to serve this growing pool of borrowers.”