Inform 23rd September 2022

On Tuesday 20th September Suffolk Building Society relaunched expat and self build products and are now back in these markets. These include expat resi, expat BTL and expat holiday let products and standard and large loan self build products.

The team have worked hard to ensure we are in a position to return to the market and we will be following this with a further product launch into the other areas shortly – we’ll keep you posted.

Click here to find out more about our expat and Self build criteria.

On Thursday 22 September 2022, the Bank of England (BoE) base rate increased by 0.50% from 1.75% to 2.25%.

Following this decision, we can confirm the following for existing mortgage customers:

• Santander tracker products will increase by 0.50% from 3 October 2022, but customers’ payments won’t increase until November. This includes the Follow-on-Rate, which will increase by 0.50% to 5.50%.
• Alliance & Leicester tracker products will increase by 0.50% from 1 November 2022 and customers’ payments will also change from November
• Please note that Standard Variable Rates (SVR) for both Santander and Alliance & Leicester will increase by 0.25% not 0.50%. This is because these rates are not directly linked to the BoE base rate.
• Santander’s Standard Variable Rate (SVR) will increase by 0.25% to 6.24% from the beginning of November 2022, but customers’ payments won’t increase until December.
• Alliance & Leicester’s SVR will increase by 0.25% to 6.24% from the beginning of November 2022 and customers’ payments will also change from November.

If a customer’s existing mortgage is affected, they’ll receive a letter notifying them of their new interest rate and new monthly payment a minimum of 5 days before their monthly payment changes.

If they’re worried about how interest rate increases will affect their mortgage, they can find useful tools and tips in the ‘Bank of England base rate and your mortgage’ section of the Manage your mortgage page.

All tracker rates and reversion rates on our new business and internal transfer products will increase in line with the base rate on Wednesday 28 September.

Further information

Any pipeline applications already submitted and/or offered are not affected so you do not need to do anything.

Take a look at our base rate FAQs for more information.

As a TMA Member, you have exclusive access to e.surv Chartered Surveyors, for referring your customers for advice on which Survey is most suitable for their needs.

Every month e.surv send out a Green Watch magazine, this is a monthly round-up of developments, guidance and the latest thinking on sustainability in the housing market.

The August edition of e.surv’s Green Watch was published in the week in which new Prime Minister, Liz Truss, announced a very welcome two-year price cap on energy bills. Read this month’s issue here.

Click here to read the previous editions.

Watts Commercial Finance has further expanded their team, appointing James Weaver as Commercial Manager.

James joins the team from Lloyds where he spent over 13 years within the business with the last 7 years in commercial banking. During this time, James helped hundreds of SME businesses and corporates across the South Wales region to realise their business potential and support their funding needs.

James joins Watts Commercial Finance to support their ever-growing client base across South Wales and the South West of England across all aspects of commercial funding.

Commenting on the announcement, Phil Gray, Managing Director of Watts Commercial Finance said: “As our business continues to grow, I am delighted to welcome James to further bolster our team while supporting the increasing demands from our clients in South Wales and across the South West of England.

By recruiting experienced individuals like James, we can continue to provide our ever-growing client base with commercial funding solutions and unrivalled first-class service.”

James Weaver, Commercial Manager added: “I am honoured to be joining Watts Commercial Finance as I firmly believe they are the best commercial brokerage in the UK.

Already a prominent brand in the region, I look forward to working with Phil and the team, expanding my knowledge and further growing their client base across South Wales and the South West through my own network.”

The property market may be cooling, but recent data shows that house prices are continuing to climb. According to ONS data published in August, average UK prices have increased by nearly 8% over the last year.

At the same time, demand continues to grow for rental property and Rightmove says that rental prices have increased by nearly 12% in the last 12 months.

For prospective first-time buyers who are often renting at the same time as saving a deposit, this presents a significant hurdle and it’s made worse by the cost-of-living crisis.

So, it’s unsurprising that parental assistance continues to be an important route off the rental treadmill for first-time buyers.

At Mansfield Building Society, we continue to see a lot of demand for our Family Assist mortgages, and we recently completed a case where we helped a young couple with a child get onto the housing ladder that demonstrates just how this type of product can help.

The applicants were a couple in their mid to late 20s with a child looking to purchase a three-bed terraced property to the value of £160,000. With the couple renting to the tune of £645 per month, they could prove they could maintain monthly repayment commitments yet were finding it hard to raise the cash deposit required.

To help access a loan with no cash deposit, the parents were prepared to offer 20% equity from their current property as security for the Family Assist mortgage. With the parents holding equity of around 65% in their property, they could provide the £32,000 security and still retain 51% equity.

One consideration for the application was historic defaults dating back to 2017 for one of the applicants. Whilst this may have proven an issue for some lenders, we could take a common-sense view that they had been satisfied and were well over our minimum 3-year historic requirement.

The overall mortgage term requested was 40 years, taking both applicants up to retirement age. Our Family Assist release agreement is in place and will be released in 7 years as long as certain conditions are kept, such as the family have kept up their mortgage repayments.

In the end, we’re proud to have enabled a young family to get a place of their own with a little help from parents. We were able to take a common-sense view on their credit history and they can now set roots and grow.

It’s a difficult environment for first-time buyers, but there are solutions available, with lenders able to take an individual approach and consider parental help as part of an application.

A common sense approach
If you’ve got a case on your desk that requires a common sense approach to lending then please, whether it’s a first-time buyer, home mover or remortgage client, pick up the phone to our Broker Support team on 01623 676360 or visit https://www.mansfieldbs.co.uk/intermediaries/.

The complex credit mortgage market has been around since the mid to late 1990s. Over that time, it has grown, it has changed and seems to have shaken that stigma that existed in the past. In its first decade of existence, it was all about mortgage arrears and the number of County Court Judgments (CCJs).

We have also seen more changes in this important sector. There is now a lot more choice of lenders for brokers which will be important for brokers, as at Vida we believe this market will grow.

Defaults Growth
We have seen over the years that a lot of complex credit is now driven by defaults – in particular from the likes of communication and energy companies with bills not being paid. With the continued rise in energy costs and the increased cost of living, putting real strain on people’s finances, we could expect to see more defaults issued. Inflation will also put pressure on consumers with their mobile phone bills and subscriptions to various television companies all adding up; this could see more defaults there too.

CCJs on the rise
We expect to see more CCJs issued too, again due to the financial squeeze. And CCJs stay on someone’s credit history for six years.
Rising interest rates will also put a strain on consumers with any unsecured loans they may have.

The Complexity of Cases
At Vida Homeloans, we see such cases where the client has had a one-off life changing event. This could be a divorce or redundancy for example. As a result, that event acts like a domino and impacts their finances in many ways. But it is generally a one-off and there is a story to to be told. Each case is unique and will have varying types of complex credit that occurs over a short period of time. This is where brokers need specialist lenders like Vida to be able to take a holistic 3D view of the case and find a suitable solution. That is exactly what Vida does.

These such life changing events always happen and with a financial squeeze, this could increase.

As well as those clients who have experienced a one-off event, causing those credit blips, there will be other clients who have a history of adverse credit. Quite often this is not due to an unwillingness to repay a mortgage or other loan, for example, but due to poor financial management or oversight. And this poor management can exist in all types of clients, regardless of their earnings.

Layering Principles
Another final point is that when it comes to complex cases, a client may have some impaired credit. But their income may be complex, or they may self employed for example. Again, this is why specialist lenders like Vida, who can take that 3D view, are so important to brokers – especially as we expect this important sector to see growth and more opportunities for brokers.

For more information, visit our website or contact the Vida Key Account Manager for your region here.

Over the past couple of months our BDMs and underwriters have delivered record numbers of your clients’ bridging deals.

Across residential, commercial, development exit and land; the team completed 83 deals last month while also handling 133 new signed applications.

Brokers have responded to the speed and ease of the portal, which gives them instant quotes and Heads of Terms in minutes, but also the direct access to the experts supporting them.

Get quick feedback on your enquiries by registering and submitting through the portal.

While you wait for that, see the recent feedback the team has been getting on Trustpilot:

• “Since other Lenders are very slow [nowadays] LendInvest are fully geared up and giving a super fast service and smooth ride.”
• “LendInvest is an amazing lender, quick process, you can pick up the phone to the underwriter, they are extremely helpful, they understand well, highly recommendable lender.”

“When we got into difficulties in legals, LendInvest took a commercial view on what was going on and allowed the transaction to go through at pace, very impressed and would recommend any serious investor to use them.”

Start your simpler, faster deals here.

At LiveMore, we welcome the self-employed as well as their complex incomes. We accept self-employed contractor income, foreign income, rental income and more.

Here’s why 21% of our customers this year have been self-employed…

• No maximum age for self-employed income where plausible
• Latest year’s accounts considered where plausible (eg. where they have only been trading for a year)
• We’ll consider the impact of COVID or life events on trade in previous years
• Contractors’ income welcome (we consider day rate or last year’s earnings)
• Director’s salary and dividends can be used to assess affordability. And, on referral, we can use retained profits to support affordability

We’re experts in pensions income too, but we understand if your customer isn’t ready to retire. Both our RIO and TIO product ranges have no maximum working age.

If you’re placing a case for a self-employed customer, we can help. Register today.

98% of all lifetime mortgage applications were processed within 24 hours.

68% of initial lifetime mortage applications processed within two hours.

Once processed, 99% of valuations are assessed on the day of receipt.

We set ourselves a target of giving best-in-class service levels, which we hit 95% of the time last quarter.

We are dedicated to excellent service levels
Built on a core of honesty, simplicity, and responsibility, our team works tirelessly to support you and your client.

Our Underwriting Promise
Having listened to your feedback we’re pleased to offer a dedicated underwriter who is allocated to each application as it comes onto our systems.

This means you’ll have the reassurance you will be dealing with the same person throughout the case, ensuring consistency throughout.

Join us for our next LIVE Drop-in Clinic

Have you attended one of our Mortgage Referrals Committee Drop-in Clinics? These sessions are a live version of our daily Mortgage Referrals Committee (MRC) meetings, giving brokers the opportunity to discuss their cases directly with our panel of mortgage experts, including our Chief Executive, Colin Fyfe.

Our next MRC Live Drop-in Clinic will take place on 29 September.

A case approved during the last Drop-in Clinic

Read below, a case which was approved during last month’s MRC Drop-in Clinic

• The 50-year-old applicant requested a remortgage of just over £150,000 at 80% LTV
• The applicant was capital raising to repay a bridging loan he had taken out via for his business to purchase the subject property
• He was the sole director of his limited company
• The applicant would be in his 70s at the end of term

The broker came to us to discuss the case due to the age the applicant would be at the end of term and to discuss the reasons for the bridging loan and why it had been taken out through his business. After discussing the case in detail and having been provided with documentation, including proof of the client’s income, the case was approved by our panel of mortgage experts.