Inform 2nd June 2023

The Consumer Duty implementation deadline is fast approaching and the FCA have recently cautioned ‘swift action’ for firms that ignore the new regulation.

Under the new rules, you can’t afford to ignore clients that you can’t help. Referral relationships are going to be key to help you meet your obligations and find alternative solutions for your clients.

Here at Key Partnerships, we’re ideally placed to help offer your clients equity release advice. With over 20 years of experience in this industry and having helped over 1 million clients see if equity release is the right solution for them, you can rest assured that your clients are in safe hands.

Click here to find out more.

On Wednesday 24 May, we reduced the qualifying income required for Sale of Mortgaged Property (SOMP), bonus and cash repayment plans. We also making changes to some SOMP criteria, which will mean this option is now available to more customers.

For SOMP (including where 2nd home), bonus and cash repayment plans

Minimum income reduced to;

• £75,000 for a sole applicant (or one applicant on joint application)
• •£100,000 for combined income on a joint application.

Sale of Mortgaged Property (SOMP)

• The maximum loan to value (LTV) available on Interest Only with SOMP is being increased from 50% to 75%
• For part Interest Only and part repayment lending the minimum equity will now be calculated at the end of the mortgage term, not at point of application.

New limits are now:

• 0% to 50% – minimum equity at the end of mortgage £300,000
• >50% – 60% – minimum equity at the end of mortgage £500,000
• >60% – 75% – minimum equity at the end of mortgage £750,000.

Example:

For a property value of £500,000 a loan of £375,000 (75% LTV) would now be available with up to £200,000 on SOMP (to leave £300,000 minimum equity at end of term).

• You will receive a new message where SOMP has been selected but the minimum equity requirement has not been met.
• All other SOMP criteria remains unchanged.

There are no other changes to our interest only repayment plan criteria. Please see our website ‘Interest Only’ Criteria section for more information on acceptable repayment plans. The changes apply to applications started from Wednesday 24 May. Please see our website ‘Interest Only’ Criteria section for more information.

In 2022 L&G helped 17,768 families, paying over £883m in claims. This equates to 48 families’ helped and £2.4m paid daily. And over the last 5 years, they’ve paid out over £3.8bn in claims. Find out more

Meet the people behind the numbers

Barry explains how a pay-out on his critical illness policy allowed him and his family to focus on what’s important following a Subarachnoid brain haemorrhage.

Watch now  and read their claims magazine today

Pure Retirement will soon host their third informative webinar on the upcoming Consumer Duty changes.

Did you know that 50% of UK adults display one or more characteristics of being potentially vulnerable? (Financial Lives Survey, July 2020).

The webinar, “Consumer Duty and Vulnerable Customers: Are You Prepared?” will be held online on June 7th at 10am, and aims to provide valuable insights and guidance on effectively addressing the Consumer Duty and its impact on vulnerable customers.

Protecting vulnerable customers is a key priority within the FCA’s Consumer Duty regulations. Join Managing Director of Later Living Now, Simon Chalk, as he discusses the characteristics of vulnerability and what you need to do to accommodate your customers’ vulnerability, both now and in the future, to ensure that they continue to experience the best outcomes.

You can book your place using their website.

Coventry for intermediaries is helping clients navigate changing EPC legislation with a Home Energy Efficiency Tool and their Green Further Advance, a loan that offers a lower rate for clients when they make energy-efficiency improvements.

The government is proposing to raise the minimum EPC requirement for both BTL and residential properties. Landlords may well be affected first, as the minimum rating for BTL properties is likely to change to C or above for new and existing tenancies.

The new Home Energy Efficiency Tool has been developed with support from Energy Saving Trust. It looks at the current and potential EPC rating of a property and generates practical recommendations for improvements depending on budget. It’s easy to use – just answering a few simple questions generates a personalised efficiency plan.

The Tool is only a guide but it helps brokers show their clients how small changes could make a real difference.

Take a look at the new Home Energy Efficiency Tool.

Clients who are keen to make energy-efficiency improvements could benefit from a lower rate with a Green Further Advance. The maximum loan amount is £25,000 and to qualify, a customer must spend at least half making eligible improvements designed to reduce carbon emissions and increase their property’s efficiency.  Both BTL and residential clients can apply for a Green Further Advance as long as they are existing customers of Coventry Building Society or Godiva Mortgages Limited, they’ve held their mortgage for at least six months, and they meet current lending criteria.

Here are your three red hot updates from Virgin Money and Clydesdale Bank…

1. Red Hot BTL…

Virgin Money straightforward rental cover tests, starting from 125% at the higher of 5% or product rate +1%, for like-for-like remortgages.

Clydesdale Bank no minimum rental coverage requirement means we can say yes to landlords with personal income to cover any rental shortfall within their own affordability. Call me and we can work through it together.

2. Straight up service…

Clydesdale will review applications in 10 working days and contact you with an update.

After that, you can email case.updates@cybg.com with application queries, who will respond in 2 working days.

3. Maximising affordability…

There are many ways we can look to maximise affordability for your clients, including using non-standard income, using more variable income, or looking at future income changes. Underwriters are on hand to discuss these cases so please call your virgin money BDM to discuss further. Find your BDM.

Last year, we supported 1,229 members with income protection claims. But we believe it’s the story behind those numbers that really counts.

Visit our website to find out how income protection proved invaluable for our members last year, and how these stories can help your client conversations.

In 2022, our average age of claimant was just 36, with our youngest being only 21 years old.

Watch our videos to discover some more unexpected statistics, and understand how income protection could be more affordable than your clients may think.

To help you plan ahead, we want to let you know that our mortgage system is being enhanced from 5.30pm on Thursday 1 June to 9am on Thursday 8 June.

So what does this mean?

While we work on delivering significant improvements, the system will not be available for the following:

• Resetting your password
• Case updates
• Uploading documents
• Submitting new AIPs
• Progressing applications or
• Completing a product switch

Please note, all applications and new registrations submitted during this time will not be progressed/processed and therefore may impact timescales. We appreciate your patience and understanding.

However, if you have a new enquiry, please get in touch with your local Business Development Manager or call our Broker helpdesk on 020 3427 1019.

What happens next?

When you login to the mortgage portal at 9am on Thursday 8 June, you will need to change your password, set a memorable word and a reminder of what that memorable word is. All applications prior to full mortgage application will revert to “AIP in Progress” and will need to be progressed back to its previous status.