Virgin Money joins Experian’s pre-qualified lender panel
The technology gives brokers and borrowers an early indication of which lenders will offer a loan by combining Virgin Money’s mortgage affordability requirements with Experian’s soft search software.
Users are given an automated decision about whether they match the mortgage lending criteria based on their credit history.
If the borrower is accepted they will told the maximum amount they can borrow.
Virgin Money’s standard residential and Help to Buy ranges are available on the platforms.
Brokers can use the system to narrow down the most suitable lenders for their clients.
Lisa Fretwell, managing director of data services at Experian UK&I, said: “Going through a lengthy mortgage application just to be turned down can be frustrating for everyone involved, not least the buyer who has found their dream home.
“By checking eligibility at the beginning of the journey, potential customers can see which mortgages they are likely to be accepted for based on their financial circumstances, while at the same time avoiding damage to their credit score.”
Virgin Money mortgage products are now available through pre-qualification platforms including Mortgage Gym, New Homes Group, Mojo Mortgages, Property Pal Mortgages and Iress Xplan Mortgage.
Lendex adds Virgin Money to roster of lenders
The multi-lender application lets brokers request decisions in principle or submit applications directly through to the lenders’ back office system.
Lendex has been developed by mortgage technologists Mortgage Brain. As well as Virgin Money, it has signed up Nationwide Building Society, Coventry Building Society, NatWest and Platform.
More lenders are expected to join this year.
“We continuously look to enhance our digital offering,” said Simon Wallace, head of mortgage transformation at Virgin Money.
“By committing to Lendex we are embracing technology advances to make life easier for intermediaries. We look forward to working collaboratively with Mortgage Brain to bring this to market,” he added.
Neil Wyatt, sales and marketing director at Mortgage Brain (pictured), said: “Momentum is building behind Lendex, with another big mortgage market player coming on board in Virgin Money.
“Lendex provides significant, tangible benefits to lenders and advisers, by streamlining the mortgage process and improving efficiency across the board.”
Virgin raises all high LTV rates by 0.3 per cent and Saffron pulls deals
From today, Virgin has increased rates on fixed rate mortgages above 75 per cent LTV by 0.3 per cent.
Lower risk products below 75 per cent LTV have seen rises of 0.2 per cent.
Its buy to let product rates have also seen a 0.2 per cent rise as has its shared ownership deals.
The lender said these changes were made to allow it to service existing and pipeline customers.
A spokesperson for Virgin said: “Following high demand we’ve made changes to existing residential and buy to let rates to help service existing clients and manage pipeline applications. We keep our products under constant review and these changes will allow us to balance demand with providing the best level of customer service.”
Saffron Building Society will withdraw two fixed rate mortgages at 80 per cent LTV on 3 September.
These include the two-year fix and the two-year retro fit mortgage which rewards borrowers with a cheap rate for making eco-friendly changes to their home. Both deals have rates of 1.47 per cent.
The mutual said in order for these products to be secured before withdrawal, a full mortgage application with the £999 fee paid was required.
These are the second and third 80 per cent LTV mortgages to be pulled, as earlier this week the mutual removed the five-year fix which had a rate of 1.77 per cent.
Saffron warned it was experiencing a high number of telephone and email enquiries, urging brokers not to repeat voicemails to the business development (BDM) team to allow them to respond sooner.
It also said the BDM team were responding to emails and calls on the same working day.
It advised that decision in principle referrals would be looked at within seven days and said underwriters were processing new and existing applications at a 12 working day service level agreement.
Saffron asked brokers not to contact the processing team for an update unless an application has fallen outside the 12 working day timeframe.
John Penberthy-Smith, CCO of Saffron Building Society, said: “The removal of the 80 per cent LTV products on at 5pm on Wednesday evening is to make way for new products that will be launching very soon – to bring them more in line with the current market.
“At Saffron we always aim to provide competitive products to our intermediaries, but in the current economic climate products will be subject to regular review.”
He added: “We are equally offering other products with fee discounts, like self-build products currently on sale with a fee reduction until further notice. We will keep our partners informed as new and amended products are due to be launched.”
Virgin returns to 90 per cent LTV for first-timers and raises rates
The seven-year fix with a £995 fee has a rate of 2.99 per cent while the fee-free option is 3.09 per cent.
The 10-year fixed £995 fee paying deal has a rate of 3.09 per cent and the fee-free equivalent is 3.19 per cent.
The mortgages coincide with the lender’s Home Buying Coach app, released last week, which aims to guide first-time buyers through the purchasing process.
Sarah Green, head of intermediaries at Virgin Money, said: “We recognise how challenging the last few months have been for all buyers, including those trying to get onto the property ladder.
“By offering longer term fixed rates along with the Home Buying Coach app, we are giving new borrowers an opportunity to lock their rate in for the medium to longer term, safe from immediate market fluctuations.
“The addition of the Home Buying Coach app means first-time buyers also have the have information and guidance to help them take that first and important step onto the property ladder.”
High LTV rate increases
Elsewhere, the lender is raising rates by as much as 29 basis points from tonight on the core range products at 85 per cent LTV.
Product transfers at 90 per cent LTV will increase by up to 0.24 basis points and select 65 per cent LTV deals will edge up by 0.05 points. Some buy-to-let deals will also increase by up to 0.12 points.
End dates will be extended to January 1.
UK Finance 2019 lending league: Lloyds, NatWest, Santander and Barclays make biggest gains
In 2019 gross lending for homeowners and buy-to-let landlords totalled £268bn, down 0.3 per cent on 2018, the figures from trade body UK Finance confirmed.
Overall, the top six lenders were responsible for £189bn of lending, up £7.5bn on the previous year and accounted for more than 70 per cent of all new mortgage business completed in 2019 – up from 67 per cent in 2018. (See table below)
However, while Lloyds Banking Group, NatWest, Santander and Barclays all saw notable increases, Nationwide and HSBC lost volume and market share.
Lloyds Banking Group, which includes Halifax, was once again the biggest mortgage lender in the country and saw the largest growth, increasing its lending by £3.5bn to £46bn and growing its market share by 1.4 per cent to 17.2 per cent.
NatWest Group, formerly known as Royal Bank of Scotland, moved to within touching distance of overtaking Nationwide for the second largest lender in the country.
NatWest gained £3bn in lending volume and 1.2 per cent of the market to take it to a total £33.5bn and 12.5 per cent share respectively.
In contrast, Nationwide completed £33.7bn in lending, a drop of £2bn and loss of 0.7 per cent of market share.
Santander and Barclays completed £30.9bn and £24.9bn of lending respectively, with gains of £2.6bn and £1.8bn respectively.
But after several years of strong growth as it continued to roll out into the broker market, HSBC lost ground, completing £20.1bn of lending, £1.4bn less than in 2018.
Overall, building societies and mid-tier lenders lost £1.8bn and £3.5bn in new business compared to 2018, according to the UK Finance figures, with banks gaining £7.5bn. Specialist lenders were largely unchanged.
While it is the first time since 2014 the big banks have controlled more than 70 per cent of mortgage lending, it remains far away from 2009 when they claimed more than 80 per cent.
The combined Virgin Money Group, which includes Clydesdale Bank, saw its new mortgage business fall by £2.5bn to £9.3bn.
As the intense competition took hold, the lender made public statements during the year that it was not prepared to conduct higher risk lending just to gain market share.
Meanwhile, Metro Bank also saw a sharp fall in its lending by £1.9bn as it weathered the storm from regulatory and capital issues.
And Atom Bank, which had previously created much energy in the market with some of the lowest rate products ever launched saw its business shrink by two-thirds, falling by £800m to £400m.
Outside the big six, TSB saw the biggest gain as it increased lending by £1.1bn taking it to £5.9bn in total with 2.2 per cent of the market.
Skipton Building Society was the most positive mutual, increasing lending by £500m to take it to £4.6bn, while Newcastle Building Society and Aldermore both grew their lending by £400m.
The merged One Savings Bank, bringing together Precise Mortgages and Kent Reliance, secured £3.8bn of new lending, a £300m growth on 2018.
Ring-fencing takes effect
UK Finance analyst for data and research Callum Bilbe explained that the UK ring fencing laws were likely to have played a significant part in the gains made by the largest lenders.
“Because UK retail banking is ring-fenced, it means there are only certain things that banks can do with the money from borrower deposits,” he said.
“As deposit levels are on average higher than lending levels, these large lenders have used surplus retail deposits in the ring-fenced organisation to increase mortgage lending.
“This increase in supply of mortgages has contributed toward the average price of new mortgages dropping significantly, as larger building societies and mid-tier lenders compete with the largest banks to attract borrowers to their products.”
Bilbe added that capital weighting rules were more favourable for larger lenders which further reduces the cost of funds and helped to drive down pricing.
“However, specialist lenders continue to thrive in market segments where manual underwriting is required, such as for self-employed customers or those with more complex incomes,” he continued.
“Larger, and to some extent mid-sized firms, are less able to compete in these segments as their largely automated systems are unable to provide the tailored approach to these loans that is required.”
Virgin Money mortgage book shrinks as customer deposits grow
The group said this was a reflection of the closure of the housing market between March and May.
As of the 17 July, the bank has granted 67,000 payment holidays to homeowners, which accounts for around 20 per cent of all mortgage borrowers. Around 70 per cent of its borrowers have matured from their first payment holiday and approximately 31,000 payments remain in force.
Business borrowing increased by 5.7 per cent in the quarter, to £8.8bn, as business owners made use of the government’s support schemes. The bank has support around 25,000 business customers with lending arrangements.
Customer deposits increased in Q3 by 4.8 per cent to £67.7bn largely due to lower personal customer spending during lockdown and business customers maintaining higher levels of available cash.
The bank has so far lent £619m of bounce back loans and £248m of Coronavirus Business Interuption Loans as at end June
David Duffy, chief executive, said: “In a severely disrupted environment we are delivering on what we set out in May; to safeguard the health and wellbeing of our colleagues, customers and communities while protecting the bank.
He added: “We know that things may yet get more difficult for many of our customers, but we are determined to continue to support their needs where we can and to fulfil our role in the economic recovery.”
In it its interim financial report, published at the end of the March, Virgin Money said it had decided to put its rebranding project on hold.
The group wants to change Yorkshire and Clydesdale Bank branding to Virgin Money. Duffy said the group had now decided to restart the plans.
Virgin Money tightens policy on CCJs and missed payments
The lender will no longer accept borrowers who have a County Court Judgement (CCJ) or a default showing on a credit report.
This applies to satisfied CCJs, that remain visible on a credit file, and defaults as well as unsatisfied credit issues.
Borrowers who have two or more consecutive missed payments on any item of credit in the last six months will also be rejected.
These changes will not impact customers who have taken an arranged mortgage payment holiday
The changes come into effect from 9 July.
Virgin makes series of rate changes
Selected 85 per cent LTV residential rates have been increased by 0.05 per cent with rates now at 1.9 per cent for a two-year fixed purchase product with a £995 fee and 2.02 per cent for the three-year equivalent with £995 fee.
A five-year fixed purchase mortgage at 85 per cent LTV now has a rate of 2.05 per cent with a £995 fee, while the fee-free option has a rate of 2.24 per cent.
Certain buy to let and portfolio product rates have also gone up by 0.1 per cent.
Across the intermediary exclusive products, the two-year fixed at 65 per cent loan to value (LTV) with a £1,495 fee has been reduced to 1.16 per cent from 1.34 per cent.
This comes with a free valuation for purchase customers or a free valuation and free legals for remortgage customers.
The 65 per cent LTV five-year fixed fee saver option has been reduced from 1.67 per cent to 1.64 per cent with £500 cashback plus a free valuation for remortgage customers.
Within its core range, Virgin has reduced the rate of the five-year fixed fee saver deal at 65 per cent LTV to 1.64 per cent. This product comes with a free valuation for purchase customers or a free valuation and free legals for remortgage customers.
Clydesdale and Virgin Money remind brokers to notify them of borrower changes
The lenders, which are part of the same group, told Mortgage Solutions they had sent a reminder to brokers of its policy to update it if borrower circumstances changed as part of their commitment to responsible lending.
This could include being furloughed, loss of overtime or commission payments, or being made unemployed, the lender said.
“We understand that many peoples’ lives have changed in recent months,” it in a message to brokers.
“As we continue to assess mortgage applications, it’s important that we take into account your customers’ current circumstances.”
It continued: “You must let us know if there have been any changes to a customer’s circumstances since you submitted an application to us.
“Examples of changes could include unemployment, furlough, loss of overtime or commission.
“If things have changed after you have submitted an application, please tell us and we will assess your customer’s current circumstances against our policy at the time of the original application.”
Virgin Money pulls 90 per cent LTV deals putting the strain on HSBC
Virgin Money said it had taken the decision to temporarily cut back its lending to 85 per cent LTV to protect its service levels, after being one of the only lenders left in the market to offer high LTV deals.
Before last night’s withdrawal, the bank had raised rates on its 90 per cent LTV range by up to 0.49 per cent.
A Virgin Money spokeswoman said: “Following a strong increase in demand, we are temporarily withdrawing our 90 per cent LTV purchase, remortgage and new build products in order to protect our service to existing customers and applications.
“Our 85 per cent LTV products will continue to support customers with small deposits, and we hope to be back in the 90 per cent LTV market soon.”
HSBC is now the only big high street bank still offering 90 per cent deals through intermediaries.
But the bank is hitting daily limits on the amount of lending it will do at 90 per cent loan to value (LTV) by 8.30am, according to brokers.
The bank is operating a ‘funds booking’ system that caps availability but guarantees that some lending at this level is available each day.
HSBC announced that it may have to limit lending at 90 per cent LTV in April.
But brokers have reported that the lender is now very quickly reaching its daily limit.
Chris Sykes, consultant at Private Finance, said: “Lenders are limiting the amount of high loan-to-value mortgages they will undertake each day, with lenders like HSBC only allowing a certain number of these products to be processed each day. They open at 8am. By 8.30am they’re all gone.”
It comes after Accord also pulled out of lending at 90 per cent LTV citing overwhelming demand.
Many lenders withdrew from the market in March when the coronavirus outbreak sent the property market into lockdown.
Some banks and building societies returned as physical valuations restarted. But the choice has still been limited compared to pre-coronavirus levels.
HSBC has continued to offer 90 per cent LTV mortgages throughout the coronavirus, and said it has no plans to withdraw from the market.
The bank stopped offering 95 per cent LTV deals in April and has yet to reinstate them.