TSB is making the changes to its purchase and remortgage deals with £1,995 and £995 fee options.

The two-year fixes in its 60 per cent and 75 per cent loan to value (LTV) tiers have been cut by 30bps.

For example, the 60 per cent LTV deal with a £1,995 fee is now 1.49 per cent, while the £995 fee product is now at 1.69 per cent. The 75 per cent LTV versions are at 1.69 per cent and 1.89 per cent respectively.

In it’s five-year fixes, the 60 per cent LTV products have been reduced by up to 10bps, to 1.74 per cent and 1.89 per cent respectively.

TSB has also made some rate changes to its product transfer range.

Vida Homeloans

Meanwhile, Vida has reduced its Vida 1 range of buy-to-let products by up to 50bps.

The two-year fixes are now at 2.99 per cent for 70 per cent LTV and 3.14 per cent for 75 per cent LTV.

And the five-year fixes are 3.39 per cent and 3.49 per cent at 70 per cent and 75 per cent LTV respectively.

The products are available for purchase and remortgage and on single family dwellings, but not for expats.

Vida has continued to complete purchases on its buy-to-let range but has paused purchases applications for residential deals to help service cases before the stamp duty holiday deadline of 31 March.

From 25 November the lender is restricting all residential deals to remortgage only.

It is also withdrawing all Help to Buy, First Home Fund and Right to Buy products.

The minimum loan size for all BTL and residential cases is being further increased to 150,000.

And all BTL mortgage at 80 per cent loan to value are being withdrawn.

This is the third such move Vida has made since re-entering in August. Earlier this month it withdrew some Help to Buy products, increased various rates and increased the minimum loan value to £100,000.

New submissions and pipeline cases

Brokers must submit decisions in principle under the expiring products and criteria by 8pm on 24 November. After this a product from the new range must be selected to proceed.

For any new or pipeline cases potentially impacted by these changes, all mandatory documents must be uploaded with fees paid and progressed to Application Received stage by 8pm on Thursday 26 November.

A spokesperson from Vida said: “Vida has received an incredibly positive response from intermediary partners since returning to lending, and we have seen an unprecedented number of applications.

“Despite making a number of product changes during October and November, applications continue to spike. Protecting service levels remains a priority for us and we have therefore taken decisive action by making a further number of temporary changes to our proposition.

“The impact of the crisis resulting in a higher demand for specialist lending, along with the impending deadline of the Stamp Duty Land Tax holiday and Help to Buy scheme means this is an incredibly busy time for the mortgage market.

“At Vida, we are striving to provide quick outcomes for our customers, while maintaining our commitment to lending responsibly as we continue to assess each application case by case.”

The lender said it was making the moves to protect service levels for intermediaries who have already submitted cases to it.

Vida previously reduced the range of mortgage available at the start of October after it re-entered the market in August.

In its latest changes, the minimum loan size has been increased to £100,000 for all remaining products, with Help to Buy products on adverse tiers Vida 2 to Vida 5 being removed.

It has also increased interest rates on residential two-year deals at 70 per cent and 75 per cent loan to value (LTV) products and five-year 80 per cent LTV products

The two-year rates start at 3.59 per cent for the Vida 1 range at 70 per cent LTV and rise to 5.69 per cent for the Vida 5 range at 75 per cent LTV.

The five-year versions at 80 per cent LTV start at 4.89 per cent and rise to 5.59 per cent for Vida 4.

A Vida spokesman said: “Vida has received an incredibly positive response from intermediary partners since returning to lending.

“We are seeing unprecedented application volumes, and as a result we have now made several temporary changes to our product range and criteria.

“This is to protect service levels for intermediaries who have already submitted a case to us. We are committed to returning to offering a broader product range as soon as we can.”

The lender pulled out of the mortgage market completely in March due to a lack of liquidity facilities available to non-bank lenders. 

Vida then returned to lending up to 85 per cent loan to value (LTV) in September and amended its criteria to align with payment holidays, furloughed borrowers and those who had received bounce back loans. 

It now says an “overwhelming response” to its return and “unprecedented demand” has resulted in the decision to withdraw products. 

The lender has retracted its two-year fixed mortgages for residential and buy-to-let borrowers at 80 and 85 per cent LTV as well as the five-year option at 80 per cent LTV. 

Its two-year fixed Help to Buy and right to buy products have also been pulled. 

The mortgages that have seen rate increases include the two-year fixed buy-to-let mortgages at 70 per cent LTV and 75 per cent LTV, which have gone up by 15 basis points (bps). 

Five-year fixes for buy-to-let borrowers at 70, 75 and 80 per cent LTV have also risen by 15bps. These changes will be applicable to the lender’s Vida 1 and Vida 2 borrowers. 

Across its residential range, five-year fixed products available to Vida 1, 2 and 3 borrowers have increased by 20bps at the 70, 75 and 80 per cent LTV tiers. 

The right to buy five-year fixed product has been increased by 20bps and the Help to Buy five-year fixed has gone up by 30bps. 

Decisions in principle for current rates must submitted by close of business on Monday 12 October. Applications, together with all relevant mandatory documents, must be uploaded by close of business on Thursday 15 October. 

Louisa Sedgwick (pictured), managing director mortgages at Vida, said: “Following our relaunch back into the intermediary market in September, we have received an overwhelming response from our intermediary partners and are seeing unprecedented application volumes.  

“As a result, we are temporarily withdrawing a number of our products in order to protect our service to intermediaries and their customers.”  

Sedgwick said the lender expected to have a smaller product range for a limited time while it processed its pipeline.  

“We want to make sure that we maintain strong service standards whilst dealing with the incredibly strong application volumes we have received in recent weeks. 

“As ever, we remain 100 per cent committed to intermediaries and will return as soon as possible with our full product offering, including loans up to 85 per cent LTV,” she added. 

The buy-to-let deal offers landlords the option to fix their mortgage for five years, but leave penalty-free after three years.

The Vida Flex product is available up to 75 per cent loan to value (LTV) and rates start from 3.84 per cent.

Vida returned to the market in mid-August with deals available up to 85 per cent loan to value.  It was forced to stop lending in March when the country went into lockdown and the capital markets temporarily pulled up the shutters.

Vida completed a £350m securitisation in July allowing it to relaunch its range.

Louisa Sedgwick (pictured), managing director mortgages at Vida, said: “We feel overwhelmed with the incredible response from advisers that we’ve had since our return to lending.

“Vida’s new plans are all about being the lender for Britain’s underserved borrowers and helping more people find a safe place to call home.

“The positive impact we can have on so many lives continues to spur our ambitions at Vida, and we look forward to working in partnership with advisers to build a new proposition that can really support borrowers in today’s mortgage market.”

Vida was forced to halt lending in March when the coronavirus lockdown was introduced and capital markets closed-up, but after completing a £350m securitisation in July it has been able to relaunch.

Mortgage Solutions understands Vida will be expanding its proposition in the next few weeks as it rolls out to the market again.

As part of its return the lender has introduced specific criteria to tackle the new economic environment, including payment holidays, furlough and bounce back loans.

Where payment holidays are concerned, for residential and buy-to-let, applicants must have finished the payment holiday for secured and unsecured loans, with evidence of at least one payment made on their most recent mortgage or bank statement.

Residential borrowers

Residential applications from currently furloughed borrowers will be accepted provided they are returning to work within the four weeks following the application date.

However an offer will not be issued until they have returned to work and non-guaranteed income will not be included.

For borrowers who have already returned from furlough, an employer form is required along with further evidence.

Self-employed borrowers will be considered, although additional documentation and information will be required, and those utilising the government’s Self-Employment Income Support Scheme (SEISS) must be back to full-time work.

Buy-to-let applications

For landlord borrowers who have been furloughed, in all cases Vida will require the latest month’s bank statement, showing sufficient funds to cover three months’ payments or regular rental income from the portfolio.

First-time landlords and top-slicing are not permitted where the applicant is currently or was previously furloughed.

The same requirements and restrictions also apply to self-employed applicants.

Bounce back loans and Coronavirus business interruption loans cannot be used as part of the applicant’s income or to fund any part of the deposit.

Vida will not accept applications where these types of loans are secured against the security address. It will also require information related to the loan, for example the loan amount, the monthly payment and reason for the loan.

Regular non-guaranteed income is not acceptable for top-slicing or first-time buyer’s buy-to-let affordability assessment.

Limited company lending is open to special purpose vehicles, but not trading limited companies.

The highly active market driven by the stamp duty cut combined with social distancing restrictions for employees has meant many lenders have been hit by challenges maintaining services levels and have limited supply.

Louisa Sedgwick, managing director mortgages at Vida, told Mortgage Solutions that she was aware of the situation the lender was relaunching into.

“We will of course be monitoring applications daily. Because we don’t have a pipeline of applications yet, we can actively manage the volumes,” she said.

Sedgwick continued: “Our intention at Vida has always been to get back to lending. We want to support Britain’s underserved borrowers and we plan to return with a renewed ambition to change mortgages for good.

“As we prepare to return to the mortgage market, we’ve made our standard mortgage range of products up to 85 per cent LTV available to intermediaries through sourcing systems.

“We will be testing everything over the next week to make sure we can deliver the best possible service to our intermediary partners.

“However, we’re at the very start of a new journey for Vida and we have some exciting announcements in the pipeline as we invest in our proposition to innovate for intermediaries and our customers.

“We’ll have more to announce on these plans very soon,” she added.

Brightstar is also contacting its key lender partners to let them know the distributor will be accepting visits from lenders now it has put procedures and facilities in place.

Speaking on the Brightstar Vlog, Bluestone Mortgages managing director Steve Seal agreed there would be a change in the way lenders worked which could be a challenge for field-based BDMs to adapt to.

“We are seeing some appetite from intermediaries for BDMs to start knocking on their doors again,” Seal said.

“I think we’re a long way off from finding ourselves in the situation where we have BDMs out in their cars all day doing five or so appointments and knocking on brokers’ doors.

“But where certain key firms have established Covid secure environments where they can go in and be safe and continue to maintain that relationship, then we have started to see that and have facilitated that already.

“In a relatively small number but I’m sure that will grow over the coming months,” he added.

Very strict rules

Brightstar CEO Rob Jupp (pictured) who was hosting the Vlog noted that the firm was taking steps of its own to start bringing lenders back in to visit.

“I will be writing out to all our key partners with a scheme of work we put together in the last month,” Jupp said.

“People at Brightstar and Sirius have put together a really good document, track and trace app and full scheme of work for lenders’ key account people to come back into our businesses within very strict rules.

“It may be for some people, it may not be for others, but certainly where that key partnership has been really important and we want to make sure that those that want to come can do so – as much for the benefit of mental health as to get back into doing the job well.”

Productivity increased

Discussing plans for potentially returning staff to offices, Seal noted that while Bluestones offices were open having had significant mediation work completed, he had told his teams they were free to work from home until the end of the year.

“We’ve gone out and researched with colleagues… and largely people want a balance between home and office working in the long term,” he said.

Seal added that productivity had increased with people working from home.

“We found during this period where we’re doing record volumes, I would argue we have seen increased level of productivity from people working from home where they don’t necessarily have distractions from working in an office environment.

“The challenge is preventing that level of isolation that might occur and keeping people feeling embedded in the business – but we’re very comfortable with the working from home principle,” he added.

Not one-size-fits-all

Vida Homeloans managing director of mortgages Louisa Sedgwick and Pepper Money sales director Paul Adams were also taking part in the call.

They had both conducted research around their firms about when people should start returning to offices and how that should take place.

Sedgwick explained that Vida was in the process of whether to bring people back into offices for next three or four months or to keep them working from home if it works for them.

Its survey of staff had found around 90 per cent were very comfortable working from home but the remainder were potentially hampered by their individual situations.

The lender already had underwriters working from home but Sedgwick noted there could be compliance issues which needed to be taken care of.

Pepper’s Adams noted that with three sites it was likely to be a very complex scenario for the lender and many decisions may be taken on a team or individual basis.

“We’re engaging with a third party to help on a consultancy basis,” he said.

“It’s not going to be one size fits all.”

“One of the things that causes anxiety is uncertainty. We’re not going to suddenly say ‘everyone back’.”

And Adams emphasised that interaction with broker firms will look different because of changes in the way people work which can make them more productive.

Watch the rest of the Brightstar Vlog by following this link.

The lender said that completing its £350m securitisation last month had enabled it to begin plans for re-entering the market ‘imminently’.

Pepper Money has also revealed it is in the process of conducting a securitisation which should help it increase liquidity and lending volumes later in the year.

Weeks rather than months

Speaking on the Brightstar Vlog, Vida Homeloans managing director of mortgages Louisa Sedgwick said: “We’re getting ready to come back into the market imminently, so you will see something over the next few weeks.

“We’ve been working on products, pricing and proposition, making sure it’s ready to come back with something that might be pretty sexy when we do come back.

“And also working on a new sales team structure to compliment not just the new virtual trading world but also compliment what we want to do as a business going forward.”

Sedgwick noted that the team would be coming back from furlough over next couple of weeks and the lender was finalising and defining what it wanted to do on return.

“So it is just a case of watch this space, we haven’t formed a view on the date but we are weeks, rather than months away – so I’m really excited,” she added.

Capital markets open

Discussing the state of the securitisation market and its importance to the specialist lending market, Sedgwick was generally positive and credited Kensington Mortgages with being the first lender to get it going.

“I think the capital markets are definitely open, they are very keen to do trades which has been seen in the last few weeks,” she continued.

“Securitisation markets re-opening and relieving some of the liquidity issues is going to drive some great opportunities in the specialist market.

“The credit risk piece hasn’t yet played out, but capital constraints have and I think you’ll start to see some really good competitive products out there, which will enable some of the specialist customers to come back into the market,” she added.

Pepper securitisation

Pepper Money sales director Paul Adams joined Bluestone Mortgages managing director Steve Seal alongside Sedgwick on the session hosted by Brightstar CEO Rob Jupp.

Adams noted that Pepper had started the year “like a train” and was well on track to reach lending targets, however he agreed that liquidity had been one issue slowing the market and the lender was in the process of releasing more funding as it targeted a big push towards the end of the year.

“We’re working on a second securitisation now which will help building our appetite and volumes towards the end of the year,” he said.

Seal added that since Bluestone returned its full product suite to market in June the lender had seen very high demand and was posting record months.

“Since then we’ve seen great appetite, we’re doing record volumes which is brilliant – and we’ve had great support from the broker community,” he said.

Watch the rest of the Brightstar Vlog by following this link.

The transaction should hasten Vida Homeloans return to the market after it was forced to stop lending during the coronavirus crisis.

The new deal, led by Barclays, JP Morgan, NatWest Markets and Santander, is the fifth residential mortgage backed securitisation (RMBS) transaction for Belmont Green.

The specialist lender said the transaction, Tower Bridge Funding 2020-1, saw significant appetite from investors.

The trade included a number of structural features, designed to mitigate any investor concerns over the impact of the pandemic.

AAA notes sold at 137 basis points over SONIA (Sterling Overnight Index Average), comparing favourably to Belmont Green’s Tower Bridge Funding No.4 securitisation in June 2019, which was priced only 10 basis points lower that the latest deal, the lender said.

Anth Mooney (pictured), chief executive, Belmont Green, said: “Covid-19 has had an unprecedented impact on the UK mortgage market. The virus and the subsequent lockdown effectively closed the securitisation markets, so our deal can be seen as an important staging post in the recovery of market confidence.

“Our responsibility as a specialist lender at this time is to help people with what are real life circumstances. Vida Homeloans can now look forward and refocus on the vital role it plays in supporting Britain’s many underserved borrowers, from key workers to single parents to the self-employed.”

Lack of funding support

In June, Kensington Mortgages completed a securitisation deal which the lender said would allow it to expand its product range and reduce some of the pricing on its deals.

Vida Homeloans temporarily stopped taking in any new mortgage business on 25 March, having pulled some of its products from sale a week earlier.

Vida cited a lack of access to liquidity facilities offered by the Treasury and the Bank of England to help lenders support borrowers who are financially affected by the pandemic.

Specialist non-bank lenders have been particularly hard hit since the coronavirus crisis began with several stopping lending as capital markets closed down and government and regulators enforced mortgage payment holidays for borrowers.

HM Treasury and the Bank of England have been in discussions with trade bodies about designing a scheme for non-bank lenders to support their funding models.

Giving evidence to the Treasury Select Committee of MPs in April, UK Finance CEO Stephen Jones explained that non-bank lenders financed through bank lines and then into securitisation structures were suffering.

He said: “Those funding structures are not working at the moment because the underlying markets are not working.

“And we are in very detailed discussions with Treasury and the Bank of England to try and design a scheme that will enable those incredibly important credit transmission mechanisms, often to underserved segments of the consumer and SME markets, to be able to be continue to operate.”

However, nothing has been published yet.

Details of schemes put forward by trade bodies to HM Treasury and the Bank of England were revealed today for the first time.

They include a possible Forbearance Liquidity Funding Scheme where the government would provide eligible lenders with cash to fund loans on which forbearance, such as mortgage payment holidays, has been provided that would currently fall outside of existing funding lines.

Specialist non-bank lenders have been particularly hard hit since the coronavirus crisis began with several, including Vida, stopping all lending as capital markets closed down and government and regulators enforced mortgage payment holidays for borrowers.

However, Belmont Green chief executive officer Anth Mooney told Specialist Lending Solutions that if the schemes are put into place it could signal a fresh start for the sector.

“A scheme which provided specialist lenders like Vida with access to an alternative source of liquidity would allow the sector to resume lending activities and support important customer groups like the self-employed, whose options would otherwise be limited,” he said.

Liquidity support

Mooney emphasised that the specialist lending market had a wide customer base including the self-employed, single parents, NHS and other key workers, along with customers who’ve missed one or two payments because of an unforeseen change in their circumstances.

“Beyond the Covid-19 crisis, these customer groups will need our help more than ever, which is why specialist non-bank mortgage lenders must be offered the same liquidity support already made available to the high street banks by government – either directly under a specific scheme, or by forcing the banks themselves to take responsibility and channel government liquidity support out to the specialist mortgage sector,” he said.

“If that does not happen, these customers will be excluded from the market, unable to buy a family home or move their existing loan for a better deal.

“This is a very real risk, which ultimately will push many customers into paying far more to borrow money than they need to. These are always the customer groups who suffer first in a credit squeeze which doesn’t seem logical or ethical.”