Archive: Nov 2016
As we wind down the year and look ahead to 2017 and what is likely to be another interesting 12 months for the mortgage market, it is a good opportunity to look back at what has been an eventful 2016.
Whether dealing with the impact of a scheduled change in housing policy, or reacting to surprise announcements, we have remained resilient and worked together to ensure you are up to date and able to provide the same first-class advice to your clients.
But what events had the biggest impact on the mortgage market and how do they fit in with other alterations facing the industry?
March: Mortgage Credit Directive (MCD)
Put in place to create a framework of conduct rules, the MCD is a piece of European legislation designed to foster a single market to protect consumers across the continent. The requirements came into force on March 21st and lenders then chose to either move straight to a European Standardised Information Sheet (ESIS) or a KFI+ on a temporary basis.
But now that the UK has voted to leave the EU, the MCD has become another future consideration for the market. Experts now believe that the MCD could well be up for negotiation following Brexit, with some calling for it to be integrated into the exit strategy by the Government and to use the opportunity to implement a set of rules better suited to the UK market.
April: Changes to Stamp Duty Land Tax
When it was announced that the stamp duty surcharge on BTL and second homes would increase by 3% on 1st April 2016, a surge of investors pushed to ensure their deals were completed before the deadline. This was a big move by the government, with relatively little warning to the market given it was only announced in the 2015 autumn statement.
But despite industry predictions that the change would greatly curb the BTL market, the sector has remained buoyant and an October report from Rightmove shows that BTL enquiries are up 30% since May’s slight slump following the rush.
June: EU Referendum and “Brexit”
Despite only representing the decision to leave the EU, the shockwaves of the referendum result reverberated around the country and left many pondering the effect the eventual activation of Article 50 could have on the mortgage market. What did follow was wild fluctuations in sterling, stock prices and shifts in consumer confidence.
But advisers have generally found that consumer appetite remains strong despite the uncertainty that followed the Brexit decision. It is likely that we as a nation will have a better understanding of the possible effects that the actual exit itself will have on the industry, once it comes closer to realisation.
October: PRA Paper on Underwriting Standards
Technically known as the CP11/16 paper, the Prudential Regulation Authority’s (PRA) announcement followed a consultation on underwriting standards within the BTL market released in March 2016. Since the release of the official document in October, many have been looking at how these standards will fit in with the other BTL changes, such as stamp duty and next year’s changes in tax relief.
Now that the PRA have issued its supervisory statement on BTL underwriting standards, relevant firms will now have to apply affordability testing and use a sufficient Income Cover Ratio to determine whether personal income is adequate to cover mortgage repayments.
December: Help to Buy 2
With confirmation that Help to Buy 2, or the Help to Buy: Mortgage Guarantee Scheme, is to be concluded at the end of 2016, many are looking ahead to the market and asking whether first-time buyers will be sufficiently supported going forward.
Despite the forewarnings of when each branch of Help to Buy would end, there has been some confusion over whether all Help to Buy schemes are ending. The good news is the Help to Buy: Equity Loan Scheme still has several years left and early signs signify that lenders are now offering high LTV mortgages, which experts hope will negate the impact on the market of ending Help to Buy 2.
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.
By Stephanie Charman, Head of Mortgages and Insurance at Mortgage Intelligence
Looking ahead to the mortgage market in 2017, we have compiled a short list of key changes and events to keep your eye on. This will help keep you and your clients ahead of the game in 2017.
January 2017: Help to Buy 2 no more!
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.
Whether the market is ready for life without Help to Buy 2 is not fully clear, even though a growing number of lenders now have, or will have 95% products available outside of the Help to Buy scheme.
The 2017 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.
March 2017: Budget Speech
One of the most important events in the industry calendar will be Chancellor Philip Hammond’s annual Budget speech. After a turbulent few months post-BREXIT some experts are preparing themselves for more changes as the government tackles the possible consequences of leaving the EU.
April 2017: Tax relief changes for Buy to Let
The tax relief that landlords of residential properties get for finance costs will be restricted to 20%, which will be gradually introduced from April 2017 and will be fully in place by 6 April 2020.
These changes could have implications for landlords’ tax positions, but a basic rate tax payer may not see an impact. However, buy-to-let property rental income could now affect the overall tax position, which is the unintended consequence of moving from being a basic rate taxpayer to a higher rate taxpayer.
Limited companies, set up for the sole purpose of buying and letting property, will not be affected by the changes. Therefore some landlords are considering setting up companies to mitigate the personal impact of the tax relief changes.
April 2017: Lifetime ISA
The new Lifetime ISA will launch in April 2017 and allow people to save up to £4000 a year towards buying their first property or for retirement with a 25% government bonus.
Many people may be more sensitive to the details after some people felt slightly misled by information regarding the original Help to Buy ISA and deposits on property. It is currently unclear how many accounts will be available in April 2017, as lenders are unable to commit to firm launch dates due to delays on account details from the government.
November 2017: Autumn Statement
Chancellors have been required to present two economic updates a year since 1976. Yet, there are reports that the autumn statement may be scaled back or even scraped in the future. Chancellor Philip Hammond wants to move away from ‘gimmicks’ and focus on fiscal forecasting. But some suggest this may be an impossible task with the uncertainty of BREXIT.
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.
Magellan Homeloans, the specialist mortgage lender, has been added to the Next Intelligence mortgage club lending panel.
This new partnership will enable Directly Authorised members of Next Intelligence to access Magellan’s full range of specialist mortgage products which provide greater solutions for those unable to secure a mortgage from high street lenders.
(Simon Read, Managing Director or Jason Neale, Sales Director), at Magellan Homeloans said: “We are delighted to be teaming up with Next Intelligence in order to bring our unique range of specialist lending products starting with rates from 3.21% to their Directly Authorised members.
Our business development team are really looking forward to working with the Next Intelligence team and DA firms to help increase their incremental income by demonstrating how to turn their declines into completions as well as helping members take advantage of the huge opportunities available in the specialist lending sector.”
Sally Laker, managing director said: “Since launching Magellan Homeloans to our Appointed Representatives last year, advisers have increasingly looked to their specialist mortgage products to help clients that have been unable to secure mortgage finance elsewhere.
“For this reason we are delighted to be the first mortgage club to be extending Magellan’s lending proposition to the Directly Authorised market.”
Mortgage intermediaries can obtain further information at: www.magellanhomeloans.co.uk
**ends**
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 media queries, please contact Countrywide Press office, +44(0)7721 439043
One of the biggest announcements this year is the full integration of Friends life with Aviva, after Aviva’s original acquisition in 2015. This has been followed by a new range of flexible individual protection propositions for consumers. Aviva believes they have brought together the best from both existing propositions, developing an exciting suite of products and new added benefits.
What is Aviva’s Protect+?
Aviva has introduced a compelling package designed and shaped by the needs of the client. They recognise that changing client needs means more choice for a wider range of people. Their three new headline products are Aviva Life Insurance+, Critical Illness+ and Income Protection+. All these include a range of benefits and options that can be added to the standard products.
Aviva’s new support package of value added services is called Support Plus. For an extra monthly cost, your client can select additional covers and have the option to upgrade their critical illness cover for not just themselves, but their children as well.
What are the added benefits?
All clients taking out one of the new Aviva protection products will benefit from access to Support Plus and its range of added value benefits to help them through an already difficult time. These benefits include Second Opinion by Best Doctors, BUPA Anytime Health line and Counselling and Carer Support provided by Workplace Options.
For an additional cost, Aviva customers are also able to add global treatment or fracture cover to any of the three core products. Extra care cover can also be added to enhance critical illness cover.
The Melton Building Society and its subsidiary MBS Lending have joined the Mortgage Intelligence lender panel. The new partnership will see both network and mortgage club members given access to the Society’s flexible approach to lending and niche product range.
The Melton offers a range of residential mortgages up to 95% LTV for purchase and remortgage, alongside niche lending products which include buy-to-let, holiday let, self-build, shared ownership and short-term lending, with credit repair mortgages offered through the MBS Lending brand.
Nicola Alvarez, director of sales and marketing at the Melton, said: “Our flexible approach to lending offers a compelling alternative for Mortgage Intelligence intermediaries with personal underwriting supported by a dedicated broker support team and innovative niche products to meet the varying needs of customers.”
Sally Laker, managing director at Mortgage Intelligence, added: “We are delighted to have further enhanced our lending panel by adding The Melton Building Society and its subsidiary MBS Lending. These latest additions further demonstrates our commitment to delivering a competitive and comprehensive panel, which is reflective of the market and the needs of both our Appointed Representatives and Directly Authorised members.”
ENDS
For further information please contact Jane Gilhespy, Communications Manager, the Melton on 01664 414141 or email j.gilhespy@mmbs.co.uk.
Note to editors:
The Melton Group incorporates the Melton Building Society, MBS Lending Ltd and MMBS Trading Ltd. Established in 1875, Melton Mowbray Building Society is a mutual building society with branches in Melton Mowbray in Leicestershire, Grantham in Lincolnshire and Oakham in Rutland. The Melton is the 25th largest building society in the UK. The Melton offers mortgages, savings and insurance and investment solutions.
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 media queries, please contact Countrywide Press Office, +44(0)7721 439043