Archive: Oct 2016
The Mansfield launches with Mortgage Intelligence Group
Mansfield Building Society has been added to the Mortgage Intelligence panel of lenders. The new relationship will increase the distribution of the Society’s individual underwriting proposition to both Appointed Representatives and Directly Authorised members.
Mansfield Building Society will be offering its range of residential and buy to let mortgages and will be working with Mortgage Intelligence to raise awareness of the criteria available to their brokers.
All brokers contacting The Mansfield can benefit from a dedicated Intermediary Sales Support team, online affordability calculator, underwriter-assessed Decision in Principle, and secure online portal for mortgage applications.
Steve Walton, National Development Manager for the Society said that the values of Mortgage Intelligence were the right fit for The Mansfield.
“By offering tailored solutions, support and training together with practical day-to-day support, we felt that Mortgage Intelligence had exactly the right values to compliment our pragmatic underwriting approach.
“Brokers are telling us that our commonsense approach of assessing each case on its own merit is highly valued. The exciting new relationship with Mortgage Intelligence enables us to extend our distribution to a greater number of brokers who can offer their clients our expansive range of mainstream and niche products.”
Sally Laker, Managing Director, “It is important that our advisers can offer their clients flexibility when considering their needs, and that is why we are delighted to be welcoming Mansfield Building Society to panel. We are confident the Society’s individual underwriting approach and personal service will prove to be a popular with both our Appointed Representatives and Directly Authorised members.”
-ENDS-
Contact:
Steve Walton, National Development Manager
Mansfield Building Society
Regent House
Regent Street
Mansfield
Notts NG18 1SS Tel: 01623 676360
email: s.walton@mansfieldbs.co.uk
mansfieldbs.co.uk
Notes to Editors:
Mansfield Building Society offers a range of Residential and Buy to Let products. All mortgages are individually underwritten without the use of automated credit scoring systems. Each application is assessed on its own merits by people and the Society is committed to developing a personal service and relationship with its brokers and customers.
As well as residential purchase mortgages to 95% loan to value and remortgages to 90% loan to value, the Society’s individual underwriting is able to account for niche lending needs. These include support for First Time Buyers (eg family gifted deposits, Right to Buy and Mates Mortgages up to 4 applicants), lending into retirement, Shared Ownership, lending against improved values to support property improvement, interest only, Let to Buy and Regulated Buy to Let mortgages.
The Mansfield has a dedicated Intermediary Sales Support team available 5 days a week, Mon to Fri 9.00am* – 5.00pm. Brokers can call 01623 676360 or email brokers@mansfieldbs.co.uk to make enquiries.
Mansfield Building Society can trace its history back for over 140 years. It formed as a mutual and still works for the exclusive benefit of its members. As a mutual, there are no shareholders and therefore no dividends to pay. Mutuals are recognised as offering a strong guarantee and safe haven from fluctuations in the market.
About Mortgage Intelligence Holdings
Mortgage Intelligence Holdings was acquired by Countrywide in April 2011, the UK’s largest mortgage broker and property services Group. The following brands operate under Mortgage Intelligence Holdings.
Mortgage Intelligence and Mortgage Next: Established in 1996, Mortgage Intelligence, which merged with Mortgage Next in 2009, has become one of the UK’s leading mortgage networks. They offer award winning mortgage and insurance services to over 400 appointed representatives. Both networks focus on high quality of service and support offered to their intermediaries.
FYB Network: Mortgage Intelligence Holdings acquired Life and Easy trading as FYB Network in September 2012. FYB’s brand joined Mortgage Intelligence and Mortgage Next brands under the umbrella of Mortgage Intelligence Holdings Ltd. They offer both mortgages and insurance services. They were originally founded in 2004 and became a fully authorised network in May 2007.
Next Intelligence: Next Intelligence launched as a new brand in April 2011, bringing together Mortgage Intelligence and Mortgage Next’s directly authorised clubs which were both established in 1996. They offer premium brokers services to over 3500 mortgage intermediaries including mortgages, general insurance and a new protection panel which was launched in September 2011.
For more information about Mortgage Intelligence and media queries, please contact Countrywide Press office, +44(0)7721 439043
Stephanie Charman looks at what the future holds for the Help to Buy schemes, which have helped so many people onto the property ladder.
Now that the government has confirmed it will end the Help to Buy: Mortgage Guarantee Scheme, or Help to Buy 2, at the end of 2016, many are wondering what the future holds for the first-time buyer market after the scheme has helped so many people onto the property ladder.
Launched in 2014, to help revitalise a sluggish high-LTV market and support first-time buyers, Help to Buy 2 was a scheme in which lenders could purchase a guarantee from the government to cover potential losses on high LTV loans. Should the borrower default, the lender could then claim back the money from the government on loans between 80 and 90 percent.
The announcement of Help to Buy 2’s conclusion has seen a rush of first-time buyers to the market. September saw the number of first-time buyer valuations rise by 18.7% year on year, outstripping the rise in remortgages and buy-to-let activity combined.
Has the Help to Buy package so far achieved its aim?
September’s figures reveal that between all the Help to Buy schemes, which included Shared Ownership and the Help to Buy ISA, over 185,000 people have been able to buy a new home. This was based on the number of completions that can be attributed to the schemes, of which 150,000 were for first-time buyers.
These figures suggests that the goal of the government’s Help to Buy package has mostly been achieved, in that it has helped those looking to get their first foot on the property ladder. This is supported by an average house price for purchases of £191,000, highlighting how the schemes have targeted responsible lending to first-time buyers who buy smaller and often cheaper properties.
According to the government, the Help to Buy ISA scheme has also helped more than 650,000 people save towards their own home. But recent negative publicity has asked whether the scheme is achieving its primary purpose, as the government bonus of 25% is only paid after the completion of a sale, rather than the payment of a deposits, which many argue was its original goal.
Is the market ready for life without Help to Buy 2?
The Chancellor said that despite the closure of Help to Buy 2, the scheme had been successful in achieving its aims, which was to fill the gap until lenders began offering higher LTV loans and the market bounced back. Mr Hammond believes this has now happened, with more than 30 lenders currently lending without the assistance of the scheme: “The mortgage market has become less reliant on the scheme as confidence has returned.”
But figures reveal a decline in the number of 95% LTV products in the market between March and August 2016, dropping from 270 to 225. This does however remain significantly higher than the 195 in August 2015, as well as figures from the Bank of England showing a small increase in business between 90% and 95% LTV.
So whether the market is ready for life without Help to Buy 2 is not fully clear. The autumn statement may indeed look to address the risk to the high LTV market, perhaps with the addition or alteration of housing schemes. Either way, the support of the low deposit arena is crucial, with the current affordability issues facing first-time buyers in the UK.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.
Head of Mortgages and Insurance Stephanie Charman looks at what the future holds for the Buy to Let sector and asks what the industry can do to prepare.
Analysis of the Buy to Let market by the Council of Mortgage Lenders (CML) has predicted the possible future of the sector, including the impact of changes, potential consumer trends and actions to be taken by lenders. The study used rental and capital value data to evaluate the potential market impact of a general move towards enhanced underwriting criteria.
What will be the impact of the 2017 changes in tax relief?
The Buy to Let sector has been a big driving force behind much of the mortgage growth in recent years, but the CML are keen to highlight that the sector faces some big challenges in the near future. Some important policy alterations are upcoming, including the changes in tax relief to be phased in from 2017.
Not only could these changes affect volumes of business, but also change the way investors approach their portfolio plans. The main aim of most of the changes is to increase the cost, and therefore the incentive, of property investment, which in turn should decrease demand in the sector.
Is this the biggest upcoming change?
Despite the tax changes next year, the CML suggest that it will actually be changes in affordability testing on Buy to Let borrowing at higher interest cover ratios (ICRs) and stressed rates, which will have the biggest impact on Buy to Let.
Now that the Prudential Residential Authority (PRA) have issued its supervisory statement on underwriting standards for the Buy to Let sector, relevant firms will now have to apply affordability testing and use an ICR to determine whether personal income is sufficient to cover mortgage repayments.
Remortgaging accounts for a significant part of the Buy to Let market, and remortgaging capacity is driven in part by how much rents have changed since the original loan was taken out. Now that the PRA have issued the statement to deploy affordability testing, some consumers may find it harder to remortgage to another lender.
What will any changes in consumer behaviour look like?
The CML analysed the impact that the PRA statement could have on buying behaviour, using the new rules around ICRs and stressed rates on new lending and remortgage activity. The CML predicts that this change would see a shift in buying behaviour, to a focus on lower value, often higher yielding property, which would increase the collateral risk profile of new purchases.
What can the industry do to prepare for the future?
According to the CML, there is still very much a long-term case for investing in housing as part of a balanced portfolio, which means the Buy to Let market will continue to thrive despite changes and criteria adjustment. But the CML also suggests that with one in five house sales being property investment, there are worries among policymakers that sudden changes in investor demand could result in house price volatility.
The CML believe that overall, the market will see a moderation in the growth rate of Buy to Let lending in the short term, with the Council suggesting that lenders need to start considering tracking and improving the control of the collateral risk profile of any new Buy to Let lending. The CML believe the result of the PRA statement could be that more equity is injected in the market, with slower growth in lending volumes as a result.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.
Managing Director Sally Laker looks at a recent scenario that highlights the importance of communication and case checking in the property chain.
Just when you think you have seen most events linked to a sale and purchase transaction, you realise that there is always an interesting story that reminds you of the need to be vigilant. Recently a friend decided to downsize from their big family home to a newer property with no mortgage and to release some cash. The move took place but had turned out to be a nightmare for all. She assumed that this must happen all the time and was surprised that I had never come across it before.
In all there were seven people in the chain, only two with mortgages, and exchange was all set for a Thursday with completion on the following Monday. As soon as the removal vans were all loaded up everyone was waiting for the completion confirmation. They all received a phone call to say that one of the lenders had decided to carry out an ‘audit’ and therefore could not complete on that day, and they would be advised once they could confirm a completion date! So with a completely empty house, and everything in the removal van, they ended up having to pay an additional £1600 for storage as completion wasn’t until three days later. My thoughts were immediately that this must have been some sort of fraud or money laundering alert, right at the last minute. I decided to look into what kind of reasons might have triggered the lender to impose the action at such a late point in the process.
Whilst unusual there are a number of possible reasons for the lenders actions.
It was unlikely to be money laundering because this would generally be checked and picked up by lenders before completion. This is one of the key reasons that lenders will stick to a panel of solicitors that they have approved.
It is possible that when the lender system screened the transaction that the outgoing accounts details hit a trigger that stopped the transaction from going ahead. Again, although not impossible, this would be unusual as this would normally have been thoroughly checked before getting to this stage – especially with an approved solicitor. The fraud screening system may have picked up that the bank account and sort code was linked to a previous fraud, and maybe the lender did not work from a closed panel of solicitors.
Alternatively, it could be an example of a “property hijack” or false positive match. This means that the applicant appeared to be the same person screened at application stage but on closer inspection they were not.
Another possible scenario is that a new piece of intelligence was received and it matched a past case that then concerned the lender about the collateral they were lending on. It is possible that the lender received information and, given their experience from the sequence of events, they suspected the person selling the property was not the owner. That would make it likely that the solicitor would be involved too.
New build is another area that lenders are currently concerned about, mainly regarding assignable contracts, also called “contracts of novation”. This is where a developer is selling his property via a middle man who has offered to take on, for example, 20 units at a reduced price. The middle man buys them for, say, £380k each rather than the developers asking price of £500k. The middle man is confident that he can sell them speedily, which in turn, frees up cash for the developer. They make an agreement between themselves and the middle man sells them at £450k each. The middle man offers the buyer a £50k cashback off the £500k purchase price on completion. That enables the buyer to apply for a 90% LTV mortgage as the purchase price is £500k, and a credit (cashback) of £50k is passed directly back to the buyer once completed.
This should normally be picked up by the solicitor who will notify the lender, as there is no buyer deposit. If the lender finds out about this prior to the completion it would mean that they had lost transparency on the deal, and an alert would be placed on that developer and that broker.
It is impossible to say what the real reason was, and it seems that all the transactions went through, but it is useful to know what can be hidden behind a seemingly normal transaction. This example is a very good reminder of how important it is to know who we are dealing with, and to carry out thorough checks in all cases.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.