Inform 25th November 2022

We are pleased to let you know, that following feedback from mortgage intermediaries, we are introducing changes to how we assess and evidence income and affordability for:

• applicants that receive income from foster care; and
• applicants that are newly appointed Limited Liability (LLP) partners

Foster care income

In addition to the latest three months bank statements evidencing receipt of foster care income, in all cases we will now accept either of the income documentation, detailed below, as an alternative to SA302s:

• Latest 2 years Local Authority Council statements (the most recent statement must be dated within the last 18 months); OR
• A letter from the Foster Agency confirming the total foster income received for each of the last two years

In the absence of either of the supporting documentation detailed above, SA302s are still acceptable but due to the tax allowances given to foster carers, these may not accurately reflect the full level of income received.

Important: The income you declare in the application should be entered into our application system as per our self-employed policy, and needs to reflect the documentary evidence you are providing. The income entered on the application should therefore mirror the total income stated on each of the last 2 years, as detailed on the SA302s, Local Authority Council statements or Foster Agency letter, depending on which you are providing.

Newly appointed Limited Liability (LLP) partners

To establish income and affordability, we will now accept the following documents in place of a letter from the finance director:

• The latest contract from the LLP to evidence income; AND
• The most recent bank statement to evidence income received is in line with the contract

To establish an income history, a newly appointed partner must also provide their last P60 if they were employed or last two SA302s if self-employed.

When within the 1st year with the LLP, the income used will be the value of the guaranteed income as evidenced within the contract. However, this won’t include any discretionary payments or performance linked bonuses as no track record of these exist.

Where the contract carries repayment terms of interest charges for the partnership loan, this is to be captured as an Other Regular Commitment (ORC) within our application systems.

For support in submitting an application or further information about our policy, please view our updated Residential and Buy to Let packaging guides, and our Residential and Buy to Let lending criteria.

These policy changes are effective from today, Wednesday 23rd November and will apply to all applications including those that have been started within our systems but not yet submitted.

Part One: The Knowledge Gap

The scale of the challenge is still huge. Shawbrook’s research shows that only a quarter of landlords’ portfolios contain properties that all meet the EPC C target.

Nearly four-in-ten (38%) have properties that are all rated D or below, a proportion rising to 58% of investors in London. Some 71% of all landlords still own at least one property in this category. If the proposals go ahead, landlords will not be able to begin new tenancies in these properties beyond April 2025.

Spotlight
The Guidance Gap

73% – Nearly three-quarters (73%) of landlords say the government has done a poor job of communicating its EPC proposals. Ministers have been expected to introduce legislation several times but are yet to formalise the regulations. As such, the industry is moving towards the 2025 deadline with the expectation – not certainty – that the rules will change.

75% of brokers are concerned their BTL clients are not aware of proposed EPC changes.

31% – A lack of information on how to make improvements is also a key barrier to change, cited by of landlords in our research. A similar proportion say improved guidance would be the most effective way to help them make the necessary upgrades.

Want to find out more?

You can now read more about The Knowledge and Guidance Gap from Shawbrook’s Whitepaper. Take a closer look at Shawbrook’s latest product range, which features their Buy to Let Energy Efficiency Discount for your Buy to Let cases.

Have a case you would like to discuss? Call the impact packaging team now on 01403 272625.

It’s not only solar panels and heat pumps that get you over the level C. These low cost measures may be all your landlord needs.

Many landlords may not be aware of what the EPC rating for their property is, but you can find each individual one online, and this not only covers estimated energy costs, energy efficiency and performance in preventing heat loss, but it also shows what can be done to improve the level and the cost.

Click here to find out more.

We’re back again with products to suit all kinds of borrowers aged 50-90+.

For example, we love the self-employed and they love us – in fact, they make up 21% of our customers this year alone.

Get in touch with your local BDM and let’s discuss how we can help your next self-employed case. 

• All kinds of self-employed income welcome
• No maximum age for self-employed income where plausible
• Latest year’s accounts considered where plausible (eg trading for one year)

View our products.

As part of our ongoing commitment to continue to enhance the broker journey we have extended the roll off period on mortgage product switches.

With effect from today, Monday 21^st November, the product switch window has been increased from 120 days to 180 days, giving your customers up to six months to complete their product switch with us.

Product switch criteria reminder

All existing HSBC UK mortgage customers who are on a Fixed Rate, Term Tracker, Lifetime Tracker or SVR are eligible to switch, with the following exceptions:

• The mortgage account is in arrears
• There is a consent to let in place
• A product switch application is already in progress (via Intermediary or our Direct channel)
• They have more than six loan parts
• There are more than two applicants
• There are any additional changes to the mortgage (e.g. change of term, repayment type etc.)
• They have less than two mortgage payments left

Product switch additional information

• We will pay a 0.2% Procuration Fee
• Request your customer’s mortgage sort code and account number via our

Broker Helpdesk

• Your customer can select their preferred product transfer date
• Your customer can exit their current mortgage deal early, subject to any Early Repayment Charges (the customer would need to call our Helpdesk to pay these)
• If you are instructed to accept the Offer on your customer’s behalf, you are required to do this via the broker platform
• You can also process an additional borrowing application simultaneously with a product switch (one product fee* is payable providing the chosen rate is the same for both the product switch and additional borrowing applications)

* If you are processing additional borrowing simultaneously with a product switch, the 2 product fees will need to be paid and we will then refund one to the customer. Please note, in these situations you must contact our Broker Helpdesk on upload of the applications to arrange for the applicable refund.

Need any help?

If you have any queries regarding our product switch process you can ‘Chat with us‘ or call our Broker Support Team on 0345 600 5847 (Monday to Friday, 9am to 5pm).

Over the last few years, the average landlord’s portfolio size increased and as a biproduct of this, a recent study saw an 18% increase in total rental income in 2022.

Currently, landlords have an average total of 8.2 properties in their portfolio which is a 1.3 increase from 2021. Furthermore, the growth in an average landlord’s portfolio size has led to an increase of 18% in return year-on-year amounting to £63,917 in annual rental income.

For more information on Aria’s extensive product range, click here.

Next Development Project – With properties that are classed as unmortgageable

Your client wants to purchase their next property for their portfolio, , but there’s a problem. Even though the property has lots of potential, finding funding could be difficult as it doesn’t have a bathroom or kitchen.

A bridging loan could be the answer, even if your client’s property may be classed as unmortgageable.

When we reach out to our panel of lenders regarding an enquiry, we always aim for a prompt answer and arrange the funding as soon as possible with competitive rates, with a quick and easy process.

Quick and competitive rates for Property refurbishment or development

When your client has a property investment opportunity and needs to move fast, a bridging loan is the perfect solution to get them the funding they need! It can be used to purchase land (even without planning permission), renovate a property, or buy at an auction.

We work with an incredible panel of lenders that offer bridging loans at competitive rates and a fast turn-around time to help combat sudden changes in the market.

At Aria Finance you always get a premium service that’s second to none. We handle every element of your enquiry from application to completion to take the stress out of the bridging loan process.

With one quick easy call 020 3839 9998, submit an enquiry or talk to us on the live chat, we can review your client’s finance needs and work with our extensive panel of lenders to tailor a perfect bridging solution

With buy to let constantly evolving, it’s never been more important your landlord customers know what’s happening in the market to help them make the most of new opportunities.

As part of OSB Group, one of the UK’s specialist banks and leading buy to let lenders, we’re here to do the right thing by tenants, landlords and brokers, so that the industry collectively thrives.

Landlord Leaders gathers the insights from a poll of more than 1,000 landlords and 200 brokers to find out what they think of the future of the sector, as well as speaking with industry insiders about their secrets for success.

In the report, you’ll find out more about the:

• acceleration of the professionalisation of the private rented sector
• industry-wide recognition of the benefits professionalisation brings
• emerging divergence between the motivators and practices of professional and part-time landlords
• rationalisation and investment in housing stock and environmental improvements
• new focus on tenant-first solutions

Download your copy of this must-read report.

We no longer charge the £35 funds transfer fee on all new business mortgage offers issued from Monday 21st November. Any new business mortgage offer issued before 21st November will still be charged this fee at completion.

This clarifies the previous communication which incorrectly stated that the funds transfer fee would no longer be charged on mortgage completions from 21st November.

We always want to be completely transparent about our service levels, so please see our latest figures below for when you’re ready to place a case.

Talk direct…
13 SECS
to start talking to your Sales Support team

Turnaround…
<1 DAY
review on all new apps

Response…
<1 DAY
to review uploaded docs

Decisions…
16
working days from App to Offer

Four great reasons to use webchat:

1. No waiting on the phone
2. All chats are with TBDMS
3. Easy and convenient tool for you
4. Get quick updates on submitted cases

Use Kensington’s webchat.

Four great reasons to visit K-HUB:

1. Service Levels
2. Handy Guides
3. Latest Updates
4. Portal Tips

Visit the K-Hub.