West One Loans added to Tenet Group panel
The lender will give Tenet’s brokers access to its BTL products and its end-to-end service.
The products include its standard range up to 80 per cent loan to value (LTV) with rates starting at 3.94 per cent as well as its homes in multiple occupancy (HMO) and multi-unit block (MUB) offering with rates beginning at 3.49 per cent.
It also includes a limited editions five-year fixed rate at 3.14 per cent in its standard range, as well as as it holiday let and ex-pat product ranges.
Andrew Ferguson (pictured), managing director of West One Loans’ buy-to-let division, said: “This is good news for Tenet’s brokers as they will now have access to our comprehensive range of buy-to-let products.”
Ben Wright, director of strategic development at Tenet, added: “We’re excited to be adding West One’s buy-to-let expertise to our panel and believe that their specialist range of products will help our advisers give great advice to those with more bespoke requirements.”
West One Loans ups development finance loan limit to £15m
According to the lender the product enhancement will offer small and medium-sized house-builders “fast, competitive and reliable” financing solutions.
West One Loans development finance head, Guy Murray, said: “As we’ve grown our development finance business over the past three years, the developers we’ve lent to have also expanded their businesses and moved from smaller to larger projects.
“We made these changes to ensure we continue offering competitive products to our customers, so they don’t need to find an alternative solution in financing larger development sites.”
West One Loans can now offer loans between £1m and £15m, with lending at 65 per cent loan to gross development value and 85 per cent loan to cost.
Financing is also available for residential led schemes, 100 per cent build costs and developers must have completed a minimum of two projects to be eligible.
West One Loans hires former Together exec as sales director
In his role he will work on the sales and distribution strategy for the lender’s bridging and development proposition and manage and expand its sales team.
Jones (pictured) was most recently commercial director at Roma Finance for just under a year and before that he worked at Together Loans for around 15 years where he worked in several senior sales roles.
Enra Specialist Finance chief executive Danny Waters said: “I have known Nick for a very long time, he has an amazing track record within our industry and I am delighted to welcome him to our team.
“Our business has seen very impressive results already this year and we have exciting plans ahead, I am confident Nick is the right person to power the next phase of our growth,” he added.
West One Loans secured a £250m JP Morgan investment for its buy-to-let (BTL) lending, building on its West One Loans’ residential mortgage-backed securitisation of its buy-to-let and second charge loans in November.
Video: Second charge mortgages can boost Bank of Mum and Dad lending power – West One Loans
Speaking on Specialist Lending Solutions Television, the lender’s managing director of second charges, Marie Grundy said there were “opportunities,” for second charge mortgages to support family-assisted borrowing.
Grundy said: “It may be for borrowers who have savings, but don’t necessarily want to use all of those to donate to family members. Or to give them a larger deposit so they can access lower LTV lending in the first charge market.
“That’s why we brought out specific criteria to support that borrowing.”
In May, the lender upped its second charge lending limit from 80 per cent loan to value (LTV) to 85 per cent. West One Loans reduced rates and the minimum loan size. It also widened the criteria to borrowers from any profession and to allow annual bonuses.
“It’s becoming more and more popular over time and hopefully other lenders will follow suit and second charges will be recognised as a really ideal way of accessing that type of borrowing,” Grundy added.
Watch the fourth and final part of the video series [7:07] below, hosted by editor of Mortgage Solutions, Victoria Hartley.
Video: More developers and landlords holding on to buy-to-let assets – West One Loans
Appearing on Specialist Lending Solutions Television, Andrew Ferguson, managing director – buy-to-let, at West One Loans, said when it came to bridging loans, there was “a growing demand from developers and landlords looking to exit rather than necessarily sell units.
“They’re looking to hold some units themselves.”
When they do sell, developers were disposing of fewer properties than initially intended. Instead, they opt to grow their buy-to-let rental portfolio and stay in the sector, Ferguson added.
He said this was a trend the lender had noticed over the last 12 months.
Watch the third part of the video series [6:56] below, hosted by editor of Mortgage Solutions, Victoria Hartley.
West One Loans increases second charge LTV limit and amends criteria
The Apex 1 offering is for borrowers whose credit score is less than perfect or for those with historical credit issues.
Rates have also been reduced, including a two-year fix up to 85 per cent LTV. This has been cut from 5.85 per cent to 5.25 per cent and no longer has early repayment charges (ERCs).
Five-year fixes have also been cut and now start from 5.35 per cent, previously 6.19 per cent with ERCs or 5.85 per cent, down from 6.49 per cent without ERCs.
To align with the easing of coronavirus restrictions, West One now accepts applications from borrowers from all employment sectors as long as they are not currently on furlough.
Annual bonuses will be also considered for employed borrowers including non-key workers.
In addition, the minimum property value for borrowers living in ex-council houses has been reduced from £150,000 to £100,000, up to 75 per cent LTV.
Marie Grundy (pictured), managing director, second charges at West One Loans, said: “Since the start of 2021 we have seen strong demand for our second charge mortgage products with borrowers taking advantage of record low interest rates.
“Increasingly, we are seeing greater diversity both in terms of loan purpose and the profile of borrowers benefitting from second charge finance. For example, more higher value loans are being taken out for home improvements by people with property valued above £1m.”
“At West One we are constantly looking at ways to improve our product offering to ensure we are reaching a broad range of borrowing needs. This latest set of changes support that ethos,” she added.
‘There is pent up demand for secured loans out there’ – Grundy
Marie Grundy, MD second charges at West One Loans speaks to Mortgage Solutions group editor Victoria Hartley about the way lenders adjusted their credit risk appetite during the pandemic, allowing the market to rise to £90m in March, a 31 per cent month-on-month increase on February.
“What we’ve seen is quite a lot of pent up demand from borrowers since the pandemic. Some of the more popular reasons include home improvements, with more and more people working from home and wanting to make changes to their lifestyles.”
For more on how the pandemic has changed the second charge market, watch the second in this series of one-to-ones with West One Loans below.
Video: Large-scale landlords see the current market as a chance to expand – West One Loans
Speaking with Specialist Lending Solutions, Andrew Ferguson, managing director – buy-to-let, at West One Loans, said the market had been “remarkably resilient,” throughout the pandemic.
Ferguson said: “We, like most of our competitors and other lenders in the market, are definitely seeing a real demand for buy to let profile this year. That’s a mixture of the pent-up demand that was possibly seen as part of the pandemic, and the stamp duty holiday that has been extended until June.
“We’re definitely seeing the larger-scale landlords that we deal with using it as an opportunity to increase their portfolio.”
He also hinted at remortgage opportunities for brokers, suggesting the maturities market which made up 75 per cent of business last year would continue into 2021.
“We expect a busy time of it and we’re seeing that already this year,” he said.
Identifying areas of business growth, Ferguson said he expected to see opportunities for expansion in limited company, holiday let and expat sectors.
Ferguson also suggested higher-yielding properties, such as homes in multiple occupancy and multi-unit blocks would be desirable to clients.
Watch the first part of the video series [10:59] below, hosted by editor of Mortgage Solutions, Victoria Hartley.
Second charge sees rise in large loans and home improvements – Grundy
In fact, we have seen an increase in interest from high-net worth individuals during the pandemic, and this has escalated since the start of this year.
From the end of the first Covid lockdown there has been more demand from high profile borrowers wanting large loans particularly for home improvements and property purchases. They have been turning increasingly to second charge mortgages to raise substantial amounts of money.
There is a need for greater flexibility in loan sizes which cannot always be obtained via a further advance or a remortgage to complete significant high end refurbishment projects. This in turn has led to us seeing a different type of borrower who typically owns high value property at £1m plus. With loan sizes available up to £500,000 at 65 per cent LTV and record low interest rates, second charges can be an attractive alternative to a remortgage.
Pandemic home improvements
The pandemic has changed the living requirements of many people who find themselves both living and working from home. They want more space for an office or to home school their children so there has been an uplift in extensions and loft conversions.
By being forced to spend more time at home due to lockdowns, people are looking to improve their surroundings so opt for a new kitchen or bathroom or completely redecorate the house. They may want to landscape the garden so they can have family and friends over in a Covid secure outside environment or create a children’s play area.
Often there is a large amount of equity in their home and therefore a smaller LTV. Their first charge mortgage rate is low which can mean it is often best advice to avoid disturbing existing mortgage arrangements; and in addition any early repayment charges would make it expensive to remortgage.
This is a great opportunity for brokers to advise people of another option, which is to raise the required finance via a second charge loan.
Because loan sizes are generous in the second charge market, terms can be flexible. For example, if a borrower has 15 years remaining on their first mortgage, they have the option of taking a second charge of up to 30 years. And this also includes flexible features such as the ability to make overpayments.
In addition, we are seeing more HNWs wanting second homes and using secured lending for the deposit. This can be for people living in city centre apartments wanting a rural retreat or a country or seaside bolt hole.
Conversely, there are borrowers taking advantage of the downturn in property prices in cities like London, particularly HNWs investing in buy-to-let property. The second homes and BTL investments have also been spurred on by the stamp duty holiday – now extended until the end of June.
We expect to see this trend in borrowers owning expensive property requiring larger loans to continue. The pandemic has changed our lives in many ways and our homes are seen as ever more important with people wanting to make improvements to their surroundings or acquire further properties for personal use or investment purposes.
Bridging drives Q1 growth at West One with BTL and seconds on course for larger Q2
According to figures published by parent company Enra Specialist Finance, completions at West One reached £309m in the first three months of 2021, up 37 per cent on the same period last year.
The growth was also reflected at Enra’s two broking firms – Enterprise Finance and Vantage Finance – with completions and new enquiries received setting records.
It noted the increasing numbers of more complex transactions in the market meant a growing demand for specialist advice.
Enra CEO Danny Waters (pictured) told Specialist Lending Solutions that bridging finance was the main reason for the leap at West One, but perhaps surprisingly this was not down to the stamp duty holiday deadline.
“Very few people used bridging finance to save stamp duty as the cost of it offsets some of the savings,” he said.
“There’s a variety of reasons why we did well – we’ve got a newer offering within the bridging finance market and we were well organised and capitalised to enter into the year.
“We’ve seen lots of development exit bridging, with developments delayed due to Covid and so developers needed further time to sell their units and there was also some restructuring going on. “High street and private banks were also taking longer to make decisions so for many borrowers the quickest and most certain path of finance was specialist lenders,” he added.
BTL and seconds in Q2
Enra said business took time to pick up with January being slower but that this quickly picked up and pipeline applications were looking strong.
Waters said this would be reflected in other product areas in the next three months.
“I’m almost certain we will see stronger completions in Q2 for buy to let and second charge,” he continued.
“We’ve got cases in the pipeline but these products have slightly longer completion times, but buy to let will be stronger in Q2 than Q1.”
Rather than any particular market trends, Waters believes in this case the growing business is down to West One improving its proposition, citing more competitive pricing and its credit risk approach.
Focus on current areas
West One has begun rolling out distribution to mortgage clubs with its first such arrangement with Dynamo in December and a second with TMA in March.
And in February it signed a £250m funding deal with JP Morgan.
For the rest of the year Waters suggested West One is likely to further concentrate on its existing markets rather than expand into new ones.
“The business has always been ambitious and we’ve looked to grow year-on-year since we formed in 2002 and have largely maintained that,” he said.
“I don’t think we’ll be launching any new product areas soon, but I think it will be a more deep and meaningful play in recent additions.”