Leanne Arundell (pictured) joins Castle Trust Bank as the business development manager for North London and the Midlands.

Arundell has more than 24 years’ experience in the mortgage industry, having previously held underwriting and business development roles at lenders including Accord Mortgages, Advantage Homeloans and Leeds Building Society.

“Castle Trust Bank has such a strong reputation for providing innovative solutions to help property investors achieve their objectives. I’m looking forward to helping deliver some of those solutions to a growing number of brokers,” she said.

Experienced business manager Gary Maher also joins Castle Trust Bank and will be a telephone business manager for the South. Maher has 14 years of experience in financial services and has previously held roles at Harris Balcombe LLP, BMW Financial Services and Alphabet GB.

Maher said: “Over the last 14 years, I’ve learned that good business development is about open communication and proactive support and I’m looking forward to applying my experience and skills to my new role with Castle Trust Bank.”

Rob Oliver, sales director at Castle Trust Bank said: “The addition of Leanne and Gary enhances our business development team, which is always on hand to help brokers find a solution for their tricky buy-to-let cases. We have always known that it’s important to give brokers a strong choice of options in how they choose to work with Castle Trust Bank, and the last two years have only reinforced the importance of providing both excellent face-to-face and remote BDM support.”

In July, Castle Trust also appointed Matthew Lawrence as regional account manager for central London.

In a poll of 78 mortgage brokers, 63 per cent expect the market to grow significantly, and a third expect it to grow slightly.

The biggest opportunities for the specialist lending sector were borrowers with complex credit, with just under half of brokers selecting suggesting this.

This was followed by a growth in self-employed workers and increased product choice, at 16 per cent and 15 per cent respectively.

Bluestone Mortgages sales and marketing director Reece Beddall said: “It’s great to see such confidence in the specialist lending market among brokers. As more people come out of lockdown in a more challenging financial situation than they were in before, it is an area of the market that is only going to grow as more customers get turned away from the high street.

“This represents a huge opportunity for brokers who are going to be approached by a growing cohort of underserved borrowers looking for a helping hand over the short, medium and long-term.”

He acknowledged that despite the confidence there were areas where the specialist lending market could improve.

According to the survey, brokers suggested that the market needed to lower product costs, as well as improve loan to value ratios, flexibility and accessibility.

“We, as lenders, must listen to these demands and provide brokers with education and the tools they need to support the growing number of non-vanilla customers in achieving their ultimate dream of homeownership,” Beddall added.

According to UK Finance, Covid-19 related support has helped some customers stay out of arrears but those who were struggling before the pandemic have continued to build up arrears.

Mortgages in arrears of 2.5 per cent or more came to 76,270 in the second quarter, a fall of 1,370 from the prior quarter.

Within those 26,560 homeowner mortgages were in early arrears, between 2.5 and five per cent of balance, which is down five per cent on the previous quarter and lower than the number cases before the pandemic began

In its report UK Finance noted that early arrears had increased slightly in the second quarter due to payment difficulties, but the introduction of deferrals in March last year lead to an overall decline over the course of 2020.

It warned that the rolling back of the Job Retention Scheme in September could impact the steady decline, and said it expected early arrears to “increase at a gradual pace”.

Around 27,910 homeowner mortgages were in arrears of 10 per cent of more of the outstanding balance, up by 630 on the previous quarter.

According to UK Finance, this figure has steadily risen since the Q1 driven by “customers with complex circumstances” who had missed payments before the pandemic.

Additionally, 6,020 buy-to-let mortgages were in arrears of 2.5 per cent or more of the outstanding balance, up by 50 on the prior quarter.

Overall, 2.9 million people had been granted a payment deferral whilst the government scheme was active and said lenders will still be offering tailored forbearance and support to those who need further assistance.

Some 210 homeowner mortgaged properties and 230 buy-to-let properties were taken into possession in the second quarter, an overall increase of 90 from the previous quarter.

UK Finance said it predicted a slow rise in possessions throughout the year following the lifting of the Possessions Moratorium and eviction restrictions as the backlog of cases unwind.

Bluestone Mortgages’ chief executive Steve Seal said it was “encouraging” that mortgage arrears were close to historic lows, but warned the “picture could look very different in the coming months”.

He said: “Mortgage payment holidays have now come to an end, and with furlough and the Self-Employment Income Support Scheme set to end in September, there’s likely to be more homeowners who will struggle to keep up with mortgage repayments.

“This may only be short-term for some borrowers, however it is something that could impact their credit profile in the long-run. As a result, many of these customers risk being turned away from high street lenders and may not know where else to turn. This is where the specialist lending market has an increasingly important role to play.”

He continued that it was the industry’s responsibility to support this cohort of customers, which was set to grow, and point them to the options available to them.

Vikki Jefferies, Primis’ proposition director, said the sustained levels of low arrears showed that the industry, along with schemes like furlough and payment deferrals, had managed to protect customers impacted by the pandemic.

However, she warned: “As these support schemes come to an end it will be vital to provide proactive and sustained support for brokers.

“The housing market has been a driving force behind the UK’s economic recovery from the coronavirus crisis, but it’s important to note that the long-term impact of the pandemic may not yet be visible and there remain a number of borrowers who faced financial difficulty pre-pandemic who have continued to build up arrears through the crisis.”

Jefferies said she hoped lenders would continue to be proactive to avoid a jump in arrears in the second half of the year.

The scheme was introduced in March last year and allowed borrowers to defer mortgage payments by up to six months.

This was due to end in October last year, but new rules from the Financial Conduct Authority said applications for new mortgage payment deferrals would close on 31 March with all payment deferrals ending on 31 July.

According to the latest figures from UK Finance, around 2.9m people took a mortgage payment holiday whilst the scheme was active, and the majority have now returned to making full payments.

This is echoed by the most recent figures from lenders, who are currently reporting their half-year results.

However, as payment deferrals wind up, there are concerns that the removal of this support could lead some consumers to fall into arrears if lenders and advisors do not act quickly.

Smartr365 chief executive officer Conor Murphy said: “It was vital that lenders not only offered mortgage payment holidays to those in need but also did it quickly, given the severity of the financial situations that many found themselves in as a result of the global crisis.

“However, as this temporary lifeline comes to an end, advisers and lenders must now act with a sense of urgency to ensure homeowners do not fall from the safety of the holiday into arrears.”

He continued that the ending of the holiday should being a “renewed focus to vulnerable customers”, especially when it comes to how they are identified and supported.

“A strong CRM system, that allows you to communicate with clients virtually or in-person and keep track of their cases will be key to this. Finding ways to then help those who have been identified as needing additional support is likely to be complex and time-consuming,” he added.

Masthaven’s chief lending officer David Kennedy echoed the need for customers to be supported as schemes were rolled back.

He said: “As these pandemic measures and support schemes are wound down, it’s vitally important that customers aren’t abandoned. Some borrowers may be embarrassed to ask for help or unsure about where to turn.

“Lenders need to be proactive about identifying these customers early and reaching out to them to meet these challenges head on and avoid storing up problems further down the line.”

Kennedy added there could be a surge in customers needing specialist support and more “tailored lending”, which could be a boon for the specialist sector.

“Specialist lenders have coped well with the challenges of the pandemic so far and they have the right people and tools to take a pragmatic and personalised approach to supporting their customers through this next phase. There are certainly big challenges still to come and no one can afford to bury their head in the sand.”

A UK Finance spokesperson said that if customers were still struggling after payment deferrals end, they should contact their lender to discuss and agree on further support, which may include more tailored assistance.

This could include extending the length of the mortgage term, changing the type of mortgage, deferring the payment or interest or sums due or capitalising the interest accrued.

Updated figures from lenders on mortgage payment deferrals

The latest figures from NatWest showed there were around 500 borrowers still on mortgage payment holidays, which is down from 12,000 in the same period last year.

Coventry Building Society noted that up until 30 June this year there were 400 borrowers on a Covid-19 related mortgage payment holiday, down from 34,000 the same time last year. It added that around 98 per cent of affected customers had returned to full mortgage payments.

Lloyds has granted 491,000 payment holidays. Of these 460,000 are being repaid, 2,000 have been extended and 29,000 have missed payments.

Santander supported 256,00 customers with deferrals, but around 96 per cent were now up to date after their payment holiday. It noted that there was a value of £136m in outstanding payment holidays.

Yorkshire Building Society said it gave 40,424 payment deferrals linked to the pandemic, of which 99.5 per cent have resumed repayments.

The Co-operative Bank provided 175,000 mortgage customers until the scheme ended in March. Of those, 98 per cent had now returned to full payment.

Leeds Building Society has said that it supported 28,400 mortgages via the scheme.

Speaking with Specialist Lending Solutions, Young said it was already doing well without Starling’s investment, but the funding would allow it to go beyond its current limits. 

He said the buy-to-let lender’s goal was to lend up to £2bn a year. 

“Last year we lent for only two-thirds of the year and did £420m. This year we’ve hit £400m without Starling’s help at the halfway point. We’ll come in at around £800m — all of that will be primarily without Starling’s help. 

“Our natural limit was about £700m a year, with Starling we see an opportunity to go £1.5bn, possibly £2bn a year,” Young said. 

He said the lender’s ambition to reach that target would be set in motion by the end of this year, as its current securitisation phased out in autumn. 

Young added: “If we don’t hit £1.5bn by the backend of 2022, I’ll be very surprised.” 

Changes at the lender 

Young said the acquisition also meant Fleet could diversify its offering, as forward flow agreements tended to result in loan books being homogenous as investors want the notes to be similar. 

He also said being funded by a bank would give Fleet access to the government’s term funding scheme. This would mean if another financial crisis was to happen and the securitisation market dried up, it would be able to continue operating. 

“This gives us continuity of lending which is brilliant,” Young said. 

He also said the access to cheaper funding would allow the lender to develop better priced products. 

Young said: “There won’t be any great changes in terms of products until we have funding solely from Starling which will be in September.  

“Our products are mid-range at the moment, there’s a bit of scope in the short-term but that’s to be agreed with our funders. Once we are funded solely by Starling, then the market can look forward to Fleet being up close to the top of best buy tables.” 

Although management and the running of the lender will remain the same, Young said the acquisition will also give Fleet’s employees the chance to grow in their roles and gain more responsibility. 

“They will expand to meet the business volumes that we write. We’ve got people we’ve worked with for 15 or 20 years, who joined us from CHL Mortgages and they are really high quality people.  

“The acquisition by Starling takes away a bit of a glass ceiling. Because if you’re bumping along at £700m a year, there’s no real growth for individuals, they will be doing the same thing year in, year out.  

“If we increase the figures, we increase the number of staff and increase opportunities,” he added. 

Room to grow

Young said Fleet would be focusing on buy-to-let lending as it had done since its establishment seven years ago. 

However, he hinted the industry should anticipate an expansion into new segments of the mortgage market, of which Starling would be supportive. 

“First we want to increase our share of the buy-to-let sector,” he said. 

Young suggested there was scope to grow further in buy-to-let, due to changing investor types, and the maturing of fixed terms following landlord tax changes. 

He added: “I don’t know how many times I’ve read over the last 20 years about the death the private rental sector and that buy-to-let is a walking corpse, it’s simply not true. In the emergence of new types of investors, we’ve done away with dinner party landlords. We’re now seeing more thoughtful investors in buy-to-let.  

“We see the market as quite buoyant.” 

The portfolio will be acquired for £54.6m by financing vehicle Jacqali Designated Activity Company.

The purchase price took account of the net book value of £77.7m as of 31 December 2020. The portfolio contributed £1.95m, including allocated costs, to profit before tax in 2020 on an unaudited basis.

The buyer was “a financing vehicle established by a global financial institution,” with the  “purchaser’s  obligation to pay backed by the institution,” STB’s statement said.

The sale was in line with a strategy to focus on specialist lending segments offering higher yields, and capital released will be invested into the business.

STB said in January 2019 that it would withdraw from residential lending, citing competition and pressure on the housing market, and stopped taking new mortgage applications a month later.

It has continued lending in the commercial, development and real estate finance spaces. 

David McCreadie (pictured), chief executive at STB, said: “The disposal is in line with STB’s strategy of maximising value, simplifying the group and focusing on the areas of the business that have the strongest prospects for delivering sustainable and profitable medium to long-term growth.  

“The proceeds will be used to strengthen STB’s capital position, provide additional financial flexibility to deliver its growth strategy, and ultimately enhance returns for shareholders.” 

The sale is subject to agreement.

In its bi-annual mortgage lender benchmark report, which collates feedback from 597 brokers on 44 lenders, Smart Money People found that 82 per cent of the brokers criteria feedback for the specialist sector was positive.

Nearly all the brokers surveyed, around 92 per cent and the highest for any mortgage industry sector, said that flexibility of specialist sector was positive.

This was coupled with ease, which increased by a third compared to the same period last year to around 68 per cent.

Specialist lenders were also used more for adverse credit cases, with feedback on adverse lending growing 11 per cent compared to the first half of last year.

However, negative feedback around processing speed increased by 11 per cent year-on-year to 72 per cent.

Brokers said that they felt that lenders sometimes took too long to review documents and asked for unnecessary documentation.

Smart Money People’s chief executive officer Jacqueline Dewey said that the pandemic has led to specialist lenders being in high demand, especially for those with adverse credit, which may have had a knock-on effect in processing times.

She added that she expected the heightened demand to continue, particularly with regard to more challenging adverse credit clients, and that specialist lenders would need to work on their back-office processes to make themselves increasingly competitive.

The awards aim to celebrate individuals in the UK mortgage market and take special care to ensure that all nominees have an equal chance of a win.

The awards process caps nominations from one company to 20 — of the 62 finalists last year, 41 different firms were represented. Finalists are selected using a three-tier process to ensure fairness and independence.

Last year, 19 out of 22 winners were different to the previous year’s cohort, celebrating a wide cross-section of individuals in the sector.

The judging day is 30th September, where finalists will be required for an interview, and the awards will take place on 11th November at Hilton Bankside.

In order to be a finalist you need to campaign for votes by email and social media. Marketing material can be created, please email lorraine.francisco@ae3media.co.uk if interested.

To nominate someone visit this link.

Paradigm member firms will be able to access the Buckinghamshire’s range of residential and buy-to-let mortgages, including its joint borrower, sole proprietor (JBSP) mortgage with no maximum age for the parents.

The mutual also offers a reverse JBSP mortgage for customers who need their child’s help with affordability, and later life lending with no maximum age at mortgage entry or exit.

Additionally, it provides care mortgage products for NHS and emergency workers, as well as impaired lending including bankruptcy, IVAs and debt management on lending of up to 60 per cent loan to value (LTV).

John Coffield, head of mortgages at Paradigm Mortgage Services, (pictured) said: “At Paradigm we always want to work with lenders who push the envelope, and we are therefore very pleased to be bringing the Buckinghamshire Building Society to our members.

“The Buckinghamshire clearly look for specific customer needs in the mortgage market and tailor their proposition to this, with a range of unique and highly-targeted products available in both the residential and buy-to-let spaces.”

He added: “We know that many of our member firms will have clients for whom these products are undoubtedly needed, and we are looking forward to working with the team at the Buckinghamshire to highlight its offering to our advisers.”

Tim Vigeon, head of lending at the Buckinghamshire Building Society, said: “This is a great time to be joining Paradigm Mortgages Services; with our innovative mortgage proposition including our flexible and bespoke underwriting approach we feel we can provide extra support to Paradigm members.”

Maria has more than 20 years’ experience in financial services across the pensions and the mortgage industry and has worked with various lenders, including RBS, LMC, Aldermore and Together.

Andy joins from Clydesdale Bank and has a similar career spanning 19 years, where he has worked solely for Clydesdale in its commercial and private banking team over the last eight years as a BDM.

Recruitment drive

As part of Kensington’s growth plans, it also has two additional hires in the business development unit (BDU) and increased the underwriting team by 50 per cent over the past twelve months as part of plans to double the number of underwriters. Last month, Kensington also launched its live webchat to allow intermediaries to speak directly with BDUs online.

Craig McKinlay, new business director, Kensington Mortgages (pictured), said: “We are delighted to welcome Maria and Andy to the team. Both have a solid track record in managing network and intermediary relationships, which will be invaluable in their new roles. As we look to continue to grow our national accounts, field sales and business development activity, our newly expanded teams will be central to this push.

“Throughout last year, we remained fully operational, and these increases to our headcount mean we can continue to provide ongoing support to intermediaries.”

Maria Betti, BDM for South London, Kensington Mortgages, said: “Despite the odds, Kensington had a very strong 2020 and I look forward to working closely with the team in the year ahead.”

Andy Heath, BDM for East region, Kensington Mortgages, said: “Building lasting relationships with brokers and adding real value is the most rewarding part of the role and I am excited to join the team as Kensington continues to grow its national accounts.”