Category: Mortgage
Monmouthshire Building Society (MBS) has become the latest addition to Mortgage Intelligence’s lending panel.The new partnership will see Network members given access to the Society’s comprehensive product range.
Managing Director Sally Laker commented on the new partnership: “We are very excited to be now working with Monmouthshire Building Society. Their flexible approach and the addition of their extensive product range will no doubt be well received by advisers.”
Colin Strong, Head of Broker Sales at Monmouthshire Building Society, said: “This invigorating new relationship with Mortgage Intelligence enables the Society to extend distribution to a wider network of brokers who can offer their clients our broad range of products.”
The Society will now be working with Mortgage Intelligence to raise awareness of their products and the criteria available to brokers. MBS promises advisers flexible underwriting, access to underwriters prior to submission and the support of a dedicated broker helpdesk.
Product Development Manager Nathan Reilly highlights some of the big opportunities for advisers to help clients in 2018
2017 was a big year for several sectors in the mortgage industry, with plenty for advisers to keep on top of. This has made helping advisers prepare for opportunities and adapt to change an even bigger focus for our network and club this year.
To help advisers stay ahead of the game once again, I have highlighted some of the top opportunities there will be to support clients in 2018!
The cessation boom
Current data predicts that £220bn worth of mortgage product cessations are due in 2018. This is a massive opportunity to help clients ensure they are on the most suitable product for them, especially if that means they can save money on their monthly mortgage repayments.
Some lenders are increasing the number of remortgage and product transfer products they offer. Data shows that remortgaging was responsible for 37% of valuations in August 2017, which is its highest share of the market in a decade. Early signs suggest remortgaging will have another big part to play in 2018.
Base Rate rises possible
Whether or not the Bank of England increases the base rate from its historic low on Thursday 2nd November, there has been definite movement from the Monetary Policy Committee towards an increase.
Even a small upward movement could create a substantial change in consumer behaviour. Moving from just talk of a rise to the increase itself will mean people may start looking more closely at those stress margins they were tested against. Advisers will be invaluable once again, as this may also trigger a new wave of remortgage opportunities.
Changes to HMO
A recent survey found that more than 85% of all landlords were unfamiliar with upcoming changes regarding Houses of Multiple Occupation. From April 2018, landlord clients may have to carry out expensive restructuring work on properties or risk being fined.
The new laws will impose tougher minimum standards on room sizes, waste disposal and storage facilities. After the changes, some landlords may even be left with rooms they are no longer able to rent out to tenants.
GDPR comes into effect
The General Data Protection Regulation, otherwise known as GDPR, will replace the existing Data Protection Act. This will become part of UK law from 25 May 2018 and apply to any organisation that handles any individual’s personal data. The new rules are designed to give more people control over how their data is stored and for how long.
Help for mortgage prisoners
The FCA has been calling for lenders to do more to help mortgage prisoners. These are borrowers that have found themselves trapped on a lender’s SVR, unable to remortgage due to complicated borrowing scenarios.
Experts are concerned at the growing number of mortgage prisoners in the market, who often as a result of changing circumstances no longer meet new affordability and stress testing rules. Fortunately, we have grown the number of specialist lenders on panel to bring advisers more options to help those with borrowing needs that require a specialist touch.
Second phase in BTL tax relief
After being introduced in April, the changes in tax relief that landlords can claim on their mortgage repayments for second homes will reach its second phase in April 2018. The level of income tax relief landlords can claim will be restricted to the basic rate by 2020. This will affect those that let residential properties as an individual, or in a partnership or trust.
All residential landlords with finance costs will be affected, but only some will pay more tax. Landlords that won’t be affected include UK resident companies, non-UK resident companies and any landlord of Furnished Holiday Lettings. It is of course important to ensure that clients are getting the required tax advice from an expert when considering the financial effects of any tax changes.
Advances in technology
It is hard to get away from changes in technology, and this is as much the case in the mortgage sector. Robo-advice is still being looked at as a possible way of streamlining the mortgage process for consumers. Freeing up time to spend with clients can only be a good thing, and far from replacing the adviser, changes in technology could simply mean more clients will be supported even more efficiently.
A certain portion of those needing to borrow money for a home will of course be looked after more quickly through automation. But human advice is still highly valued in a sector that contains numerous borrowing scenarios, which often need looking at in more detail than simply a series of questions.
Other things to keep an eye on
EPC changes – Energy Performance Certificates (EPCs) are used as a measure of the energy efficiency of a property. Although first introduced for those buying and selling homes, they are now prevalent in the rental market as well. From April 2018, landlords will need to reach a minimum EPC level before renting their property to new tenants.
Aging population – As people live and say healthier for longer, it becomes more common to borrow into later life. Lenders are adjusting their criteria all the time to suit the changing needs of older borrowers. This includes higher age limits and a raft of more suitable options to suit their needs, such as interest-only and specialist products.
Open Banking – The CMA (Competition and Markets Authority) retail banking market investigation found that larger banks did not have to compete for market space when compared with their smaller and newer counterparts. This has resulted in consumers paying more and not benefiting from new services. The CMA is therefore implementing one of their reforms called ‘Open Banking’, a transparency initiative that the FCA finalised requirements for in September.
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.
Product Development Manager Nathan Reilly reflects on the up and coming trend of prefabricated homes.
What we associate with prefabricated homes has come a long way in recent years. Previously thought of as cheap post war buildings, they were built en-mas lacking character and individuality.
Yet modern day prefabricated homes are now recognised for their unique and modern design, energy efficiency and advanced technology. Prefabricated homes are becoming widely accessible even to the point where you can now order your new home online.
What exactly are prefabricated homes?
Prefabricated homes are a type of specialist building, which are manufactured offsite in panels, modules or transportable sections of the full structure. These sections are then shipped and assembled onsite to make the final construction where the foundations will have been laid.
How can they help?
Many people aspire to build their very own dream home, but decide it is unachievable. However, prefabricated homes are making this goal more attainable by helping people avoid the lengthy, complex and expensive process of building a home from scratch.
Some even suggest prefabricated homes may contribute to solving the housing crisis. At a time when we require 250,000 new homes a year, with only 130,000 being constructed, the efficient nature of a prefabricated construction may be preferred. Prefabricated homes may be produced twice as fast as traditional constructions, due to the fact that whilst the foundations are laid on site, the house is being built in the factory.
So what’s the catch?
One of the main problems with this style of home is finding the land to build it on. Clear building sites are few and far between, especially in the south of England. For this reason many self-builders are choosing to buy a house and knock it down, making the process of building prefabricated homes less time efficient and cost effective.
There is also the issue of planning permission, as the modern structure of prefabricated homes are likely to be too distinct from surrounding homes. But, they may be favoured by some local authorities due to their design status and environmental benefits.
It is worth noting that because prefabricated homes aren’t typically considered to be of standard construction, some mortgage lenders may have certain restrictions when lending against them. This will all depend on valuer’s comments, warranties and the location of the property.
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.
Sharon spoke to recently-appointed Product Development Manager Nathan Reilly about his role, his background and what it feels like to be one of the key team members of Mortgage Intelligence.
Since joining as a Marketing Assistant at Mortgage Intelligence in 2014, Nathan has quickly progressed within the company, holding positions as Marketing Executive and Product Development Coordinator, before becoming Product Development Manager earlier this year.
Receiving a first-class marketing degree from Chichester University, Nathan’s first step into the industry was through a leading lender as a Customer Service Adviser. Fully CeMAP qualified, Nathan brings not just knowledge, but a real enthusiasm for developing relationships and products with lenders, providers and other partners.
What exactly does your role entail and how do you help advisers through lender relationships?
“A key part of my role is building and nurturing relationships with lenders, providers and other partners. This means that as a Network and Mortgage Club we are always aware of the latest developments from across the industry, and in turn, considering the next potential opportunity.
“The relationships we have with our partners are ultimately in place to make sure our advisers receive the highest level of service and support, so another important part of my role is regularly sharing any adviser feedback I receive.”
Which aspect of your role are you enjoying the most so far?
“I love the variation and no two days are ever the same! I spend a lot of the time thinking on my feet as I look for ways to maximise broker value. This can include identifying which product criteria adjustments and special features will help our advisers the most. I spend time communicating with lenders and providers through different mediums, working with them on the right approach to ensure our advisers are looked after first.”
What changes do you think we might see in the lending space over the rest of 2017?
“As consumer needs change we are seeing specialist lenders and challenger banks positively influencing the market. This is something we have responded to over the past 12 months by welcoming a diverse range of lenders and their products to panel.
“Although there is an argument to say this has happened already, I think Buy to Let lending will continue to polarise. Lenders will fit in to one of two categories, they will either be a specialist Buy to Let lender with a proposition designed for professional landlords, or an amateur landlord lender that will focus on landlords with just one or two properties.
“More lenders are also looking at the first-time buyer market and making positive changes to products and services to support people looking to take their first step onto the housing ladder. It will be interesting to see whether other lenders follow suit or even make this growing market their own.”
I hear your golfing prowess is without equal within Mortgage Intelligence. What would therefore be your ultimate golfing destination?
“My dream golfing holiday would be a tour of the United States, including legendary courses such as Pebble Beach and Augusta. But as that won’t be happening anytime soon, I think I would settle for a day trip to Scotland to play a round at the home of golf: St Andrews.”
If you could meet one celebrity in person, who would it be and why?
“Can I have a fictional character instead? In that case it would definitely be Tony Stark AKA Iron Man. He is a genius billionaire playboy philanthropist…everything I’m not.”
Favourite sporting moment?
“As a golf fan it has to be the 2012 Ryder Cup, otherwise known as the Miracle at Medinah. I just couldn’t believe what I was seeing.”
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.
Saffron for Intermediaries, the dedicated intermediary channel of Saffron Building Society, is making its full range of mortgage products available via Mortgage Intelligence.
Anita Arch, Head of Mortgage Sales at Saffron, said: “We’re delighted to be joining Mortgage Intelligence’s lender panel and are looking forward to supporting their Appointed Representatives and Directly Authorised members over the coming months. Not only will their brokers have full access to our Special Situations, Everyday residential mortgages and buy-to-let deals, but they will also benefit from our personal approach to underwriting.”
Brokers can submit a DIP and a full mortgage application via Saffron’s website based mortgage portal. Members of Mortgage Intelligence network who require further information or help can contact Debby Tedder, Business Development Manager, on 01799 582925 or by sending an e-mail to: deborah.tedder@saffronbs.co.uk
Sally Laker, Managing Director at Mortgage Intelligence, said: “Saffron for Intermediaries not only has competitive residential deals for straightforward cases, but also products specifically designed for borrowers with special requirements such as the self-employed, contractors, self-builders and landlords wanting to buy property for refurbishment before being let out.
“I have no doubt that both our Network and Next Intelligence mortgage club members will welcome Saffron as a very useful addition to our lender panel.”
**ends**
Journalists requiring further information can contact:
Josh Cooper, Cooper Consultants Ltd Office: 01654 767711
josh@cooper-consultants.co.uk Mobile: 07768 355265
NOTES TO EDITORS:
About Saffron Building Society
Saffron Building Society was established in 1849 by the Reverend John Marten, who was Minister of the Hill Street Baptist Church and Manager of the local gas company. From such humble beginnings the mutual Society has successfully grown to manage assets of over £1 billion.
Saffron Building Society is the largest regional building society serving the East of England, with 11 branches and 1 agency. The society has served the needs of the local community for over 165 years and is committed to doing so in the future.
A mutual organisation, Saffron Building Society is owned by its 90,000 members and exists solely for their benefit.
The Society employs more than 160 staff across East Anglia, who understand local customers’ needs and provide value for money products backed-up by a professional and reliable service.
Saffron for Intermediaries is the Society’s dedicated broker lending channel. Further information about the products and services available for brokers can be found at: www.saffronforintermediaries.co.uk
Editors’ notes:
To arrange interviews and find out more, please contact:
Sally Laker
Managing Director
Mortgage Intelligence Holdings
Tel: 01202 312955
Email: slaker@experiencemi.co.uk
Nadia Mahmud
Head of External Communications & Investor Relations
Mobile: 07721 439043
Email: press.office@countrywide.co.uk
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 July 2012. FYB’s brand will join the Mortgage Intelligence and Mortgage Next brands under the umbrella of Mortgage Intelligence Holdings Ltd. They have over 50 advisers and 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 in April 2011 and brought together Mortgage Intelligence and Mortgage Next’s directly authorised clubs. They offer premium brokers services to over 5000 mortgage intermediaries including mortgages, general insurance and a new protection panel which was launched in September 2011.
For further information any of the above brands please visit www.experiencemi.co.uk.
Head of Mortgages and Insurance Stephanie Charman reflects on an interesting time for buy to let with the upcoming changes to tax relief.
April’s alterations to tax relief will soon join several other key changes that the buy to let sector has faced in recent years. It is an interesting time for the industry, with the changes being another political step towards curbing a sector that has seen steady growth since 2008.
Once the changes are phased in, tax relief will revert to a flat rate of 20%, which means landlords on higher incomes may find themselves losing more in mortgage interest payments. But what does all this mean for buy to let going forward?
The story so far
The buy to let sector has been targeted for a raft of changes. One of the most impactful of these was the April 2016 stamp duty changes on second homes, which added 3% to the stamp duty bill. This was seen as a longer-term solution to reduce the incentive to invest.
The Prudential Regulation Authority’s consultation paper on lending standards has meant a tightening of criteria for buy to let lending. This includes stress testing against higher interest rates and increasing income cover ratios (ICRs) up to 145% or more.
Lenders have acted promptly to adjust their criteria. This means potential challenges for both those considering remortgaging who took out their mortgage under previous affordability, and investors looking to purchase another property. The effect that this has on landlords will depend predominantly on the amount of their mortgage in relation to the value of the property and the rent they receive.
Another contested change
Despite changes to stamp duty on second homes and new stricter affordability rules, it is the 2017 changes in tax relief that have seen some of the strongest protestations. To avoid the changes, some landlords will be considering a limited company set-up going forward, in order to be exempt from the reduction in tax relief.
A survey by the Royal Institute of Chartered Surveyors (RICS) revealed that as a result, investors will likely be reducing the number of properties they own. With the changes in tax relief adding to the previous alterations, the survey found that 26% more contributors expected landlords to scale back their portfolios, rather than expand them.
Although some of the extra costs may be passed on in the form of rent increases, it is just as likely to have the effect of freeing up property for first-time buyers. But with house building still not at the level required to reach government targets, affordability remains the overriding obstacle for many young homebuyers.
An uncertain future
Some lenders are already reporting a drop in buy to let lending, which has resulted in some traditionally buy to let-only lenders moving into the residential space. It seems that all involved in the sector, whether landlord, lender or first-time buyer, are keeping their eye on the effect of all these changes.
The government’s housing whitepaper, released in February, also looks to further assist developers in building the much-needed homes and streamline the planning system. The whitepaper also announced that the government would be generally changing policy towards supporting renters, as well as homebuyers, by removing agent fees and encouraging longer term tenancies.
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 takes a quick look at the current signs surrounding mortgage rates in 2017
It has been widely publicised that the Bank of England base rate remains at its lowest ever level. This means that many home buyers and home movers have seen relatively low interest rates. Those looking to remortgage could also currently benefit from a competitive fixed rate deal, to avoid moving onto their lender’s standard variable rate.
But is this era of low borrowing costs coming to an end? Are we about to finally see a return to higher interest rates?
The end in sight for rate cuts
After many months of rate cuts from lenders, some experts feel this period of intense competition is finally coming to an end. But despite warnings of an upcoming increase in rates in 2017, some big lenders are currently reducing their rates even further and announcing best buy contenders. It seems that as long as competition remains strong, lenders will continue to compete to reduce rates where possible to entice new business.
Uncertainty reigns
Talk of an increasing base rate took a back seat after the vote on the EU Referendum. But will Brexit’s eventual commencement actually act as a catalyst of change after a period dominated by a poor economic outlook? Only time will tell, but it was only last year that many in the market were factoring in for a rate increase that they were certain would happen. It seems that the only thing that is now certain, is uncertainty.
In the meantime, competition between lenders to offer low rates continues, which makes it an opportune time for low borrowing costs and remortgage opportunities.
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 explores whether the Government’s new garden homes are a possible answer to the UK housing crisis
A divisive plan to create nearly 50,000 homes within 14 garden villages across England has been announced by Housing Minister Gavin Barwell. Ministers have backed the building of the villages, which will be located on sites that include former airfields and much coveted green belt land. These new villages are smaller versions of the Government’s planned “garden cities”, each containing between 1,500 and 10,000 homes. But are they an answer to the UK housing crisis?
Where will the new homes be located?
Ministers have confirmed that the new villages will not be extensions of existing towns or villages. Instead, the Government has said that they will be “distinct new places with their own community facilities”. With several garden towns also announced, the whole “garden” project could deliver 200,000 new homes.
The first round of locations include sites in Cornwall and Cumbria, which makes them eligible for a share of a £6m support fund. The former Deenethorpe airfield in Northamptonshire will be one of the key locations. This 600-acre plot has been approved to include a village green, shops, a community hall and over 1,000 homes.
Other locations include an ecovillage in West Carclaze, Cornwall, where 1,500 homes will be built. These new energy efficient homes will sit alongside space for self-build and custom-built housing, as well as a brand new primary school.
Will they help solve the housing crisis?
One of the proposed solutions to the housing crisis has been the general decentralisation of housing and planning. With this in mind, Gavin Barwell said that the village development would be led by local communities, not central government. The Campaign to Protect Rural England (CPRE) also said the plans would work to relieve the crisis if “done well with genuine local consent”.
But as well as the anticipated opposition to building on green belt land, the plans have also met some scepticism. Labour’s shadow housing secretary John Healey said: “In the last Parliament they promised a flagship ‘garden city’ at Ebbsfleet. Since 2012, we’ve had 32 government announcements on Ebbsfleet but less than 500 homes built … the country deserves a proper plan for fixing the housing crisis.”
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.
With plenty of options out there for first-time buyers, Head of Mortgages and Insurance Stephanie Charman takes a quick look at five ways your clients can help their children with buying their first property.
In a time when we are continually facing property price increases, it may be hard for first-time buyers to save up enough money for a mortgage deposit or have adequate affordability to purchase their first home. To help, we have put together five ways your client may be able to help their child overcome the difficulties of getting onto the property ladder.
Gifted deposit
A simple way your client can help is to offer their child all or part of the required deposit. By raising the deposit from 5% to 10%, it could help improve the child’s affordability and reduce their monthly repayments. If they do decide to gift a deposit, they must sign a written agreement to confirm it is a gift, otherwise this may be treated as a loan by lenders and could affect the child’s affordability.
Equity charge
If they don’t have the cash available to gift to their children, they could consider equity charge. This is where they put a collateral charge on the family home instead of their child paying a deposit. It is however worth bearing in mind that not all lenders allow this in their criteria.
100% guarantor mortgages
Another option is a guarantor mortgage where a charge is placed against your client’s home. This means that the amount their child can borrow is based on a combination of their own and their child’s income and assets. This could allow them to receive a 100% mortgage. However, there is associated risk, as they would be guaranteeing that the repayments are made. This means that the guarantor’s home could be at risk in the event that their child failed to pay.
Family offset mortgages
Alternatively your client could consider a family offset mortgage. This type of mortgage enables parents to offset the value of their savings against their child’s mortgage so they may pay less interest. This is because their savings offset the sum of the mortgage that interest is charged on. As a consequence they may not always receive interest from their savings.
Getting them mortgage ready
Perhaps the best way your client can help is to make sure their children are ready for the responsibility of applying for and having a mortgage. They could make them aware of budgeting and affordability so that their children have a realistic idea of what owning a home may cost them each month. After all it is not just the mortgage repayments they have to think about.
Experts have also reported that many younger people are unaware of the extra costs that arise on top of having a deposit, such as stamp duty and surveying fees as well as solicitor fees. If they need help to save money for this, the parent could help them open up a Help to Buy ISA or a Lifetime ISA. These ISAs will support their children with their savings whilst also receiving a 25% government bonus on limited deposits.
Additionally, they could offer advice on improving their child’s credit score, as this is a common problem when first time buyers apply for a mortgage. A credit score is often an important part of lenders’ underwriting process to decide whether the applicant is suitable for the product.
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.
With changes in tax relief for landlords just around the corner, Head of Mortgages and Insurance Stephanie Charman takes a look at why some are considering the much-publicised limited company option.
With rates holding low at 0.25%, investing in property could still be a good idea for many. This is despite the tax changes that are due to begin from April 2017, at which point the tax relief that landlords of residential properties receive for finance costs will start to be restricted to 20%. This change will be gradually phased in to be fully in place by April 2020.
So why limited companies?
Limited companies set up for the sole purpose of buying and letting property, will not be affected by the upcoming changes. That’s why many landlords are considering setting up limited companies to mitigate the personal impact. As this demand for limited company loans increases leading up to April, some lenders have updated their product ranges to cater for this emerging demand.
Research from leading buy to let specialist lender Kent Reliance has revealed that more landlords are already moving their buy to lets into limited companies. In fact, the lender revealed that over 100,000 buy to let mortgage loans were issued for limited companies before December 2016. This is double the figure of the whole of 2015, suggesting that more and more people are considering the option.
But is limited company the right choice for your client?
There is no easy answer, although it may be a possible solution for some circumstances. They may be considering using the limited company strategy whether they are a professional landlord, an investor with a portfolio or even looking at purchasing their first buy to let property.
Although there is no way to avoid the changes in stamp duty on second homes, setting up a limited company and becoming a corporate entity may indeed mean avoiding the changes in tax relief. But this is a complicated area and these tax changes will often affect each landlord differently. That’s why talking to you about their mortgage needs and seeking tax advice from an accountant, will help prepare your clients for any decision on their buy to let investment.
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.