Inform 28th January 2022

Today is the final day for voting in the 2022 Mortgage Strategy Awards we’re delighted to have been nominated in the ‘Best Mortgage Club‘ category.

We would be hugely grateful for your vote if you feel we have gone above and beyond for you and your firm in the last 12 months.

VOTE FOR TMA

Foundation Home Loans are pleased to announce the expansion of their mortgage offering to borrowers purchasing or remortgaging properties in Scotland.

The Foundation product range can be accessed by mortgage intermediaries in through Foundation Home Loans’ existing panel of Clubs, Networks and Packagers.

As part of the launch, Foundation invites mortgage intermediaries advising in Scotland to join a free Welcome breakfast this week in Edinburgh or Glasgow. Places are limited and intermediaries can sign up before 5pm on Monday 24^th January via the events page of the Foundation website.

As one of the leading specialist lenders, Foundation offers a broad range of residential and buy to let criteria supporting borrowers with more complex needs, and provides product choices for intermediaries with solutions for both the employed & self-employed, professionals, individual and limited company landlords and those seeking “greener” options.

The lender has also appointed a new, dedicated Regional Account Manager, Fiona Robertson, who will be covering Scotland and the North East regions.

George Gee, Commercial Director at Foundation Home Loans, said:

“We are very pleased to be announcing our launch into Scotland today, kicking off the new year by expanding our geographic distribution, and welcoming the mortgage intermediaries who are active in Scotland to access our ranges of specialist owner occupied and buy-to-let mortgages for their clients.

“This is an exciting time for Foundation and we’re looking forward to building new relationships in Scotland, engaging with all stakeholders and providing greater product and criteria options for borrowers.

Chain Break Finance is a bridging loan that helps individuals buy a new property before selling an existing property. The upside of chain break finance is that it can be arranged very quickly so that the chain remains intact, and they can move in with minimum delay.

Impact Packaging has access to a comprehensive panel of bridging lenders. We have built strong relationships with these lenders who will take a view on all aspects of an individual case, including limited distribution lenders.

Access a faster solution to your Bridging Finance by contacting
the bridging team at Impact Specialist Finance.

Call: 01403 272625

bridging@impactsf.co.uk | impactpackaging.co.uk

We’re pleased to announce that we now support First Homes – a government run scheme in England designed to help first-time buyers get on the property ladder with discounted housing prices.

How does it work?
Your clients could get discounts on the price of a qualifying property of between 30% and 50% (compared to the market price) if they’re eligible for the First Homes scheme.

They’ll need to have at least 5% of the discounted price available to put down as a deposit, and a mortgage in place for a minimum of 50% of the discounted price.

Who is eligible?
National criteria (everyone must meet this):

• all applicants must be first time buyers their household income must not exceed £80,000 (or £90,000 in Greater London)
• they will need to have a mortgage (or home purchase plan) in place for a minimum of 50% of the discounted purchase value.

Local authorities can also apply their own criteria:

• the authority may set a lower income cap if they can provide evidence that it’s needed
• they might apply a local connection test based on residency, employment in the local area, family connections or special circumstances, such as caring responsibilities (serving members of the armed forces and their families, families of deceased members of the armed forces, or veterans within 5 years of leaving the armed forces, will be exempt from local connection tests)
• and they might want to prioritise key workers (as defined by the local authority) for the scheme.

If your clients are eligible for the First Homes scheme, then we may have a suitable mortgage in our range for them. And as always, we’re here to answer your questions.

For more information on First Homes England, please visit OwnYourHome.gov.uk

You can view our product range here.

Keep up to date with the latest trends in the BTL market by having a read of the latest Rent Index report from The Deposit Protection Service (The DPS). Like Zephyr, The DPS is owned by Computershare, and as it manages over 1.8m tenancy deposits, the Rent Index reports can provide useful insight to you and your landlord clients.

The key headline from the Q4 2021 Rent Index report is that average UK rents increased for the fifth consecutive quarter, as pressure on the supply of rental properties during the pandemic continues. Average rents reached £834 during the final three months of 2021, an increase of £16 (1.96%) on the previous quarter and a £42 or 5.30% increase on Q3 2020.

Regional breakdown of average rents.

We spoke to Paul Fryers, Managing Director of Zephyr, who said: ”There is currently significant pressure on rental stock across the country.

“Reasons are complex, but they include landlords selling up to capitalise on high sale prices, plus a shortage of new build homes as a result of supply chain and raw materials issues.

“We’re hearing stories of landlords receiving unprecedented levels of interest, with some renters willing to pay rents upfront and even stories of some tenants willing to pay over the odds to secure properties.”

Have a read of the full Q4 2021 Rent Index report here: https://depositprotection.com/learning-centre/the-dps-rent-index/

Find out more about the recently reduced buy to let mortgage products through Zephyr here: https://zephyrhomeloans.co.uk/

In 2021 the buy-to-let sector undoubtedly benefited from the Government-gifted stamp duty holiday in terms of incentivising a significant number of landlord borrowers to purchase in order to make that tax-saving.

This was clearly not a ‘normal’ aspect of the market and, given we are highly unlikely to see landlords benefiting in such a way during 2022, there has been some concern voiced about activity levels, particularly purchasing.

However, there are plenty of positives around buy-to-let, which have led our trade associations to predict another strong year for business, and which should ensure advisers active in this space are kept busy during the months ahead.

The obvious point to make here is about the continued draw of property investment, and its allure in terms of delivering both strong income levels and capital growth. With this being the case, it is not surprising to see landlords looking to add to portfolios and seeking to broaden the range of properties they invest in, particularly in areas such as HMOs or multi-unit freehold blocks.

The facts of the matter are that, through a combination of strong tenant demand and a drop in supply availability, rental yields have forged ahead. Looking at Fleet Mortgages’ recent Rental Barometer Index – which covers all regions of England and Wales – it’s Q4 2021 data shows yearly increases in yields ranging from 4.5% (Greater London) to 7.9% in the North East.

Overall, England and Wales together comes out at 5.6% which is a pretty good return, especially if you combine it with the capital growth many landlords will have secured on property over the last couple of years.

The same factors driving rental yields higher are those that continue to deliver house price inflation. Increased demand – particularly the case post-lockdown(s) as people weigh up their housing options – coupled with a low supply of homes coming to market, and a tendency not to hit the targets when it comes to new-build properties, means prices have been rising – over double-digits in some regions of the UK.

In the private rental space, can rental yields continue perform? Well, Knight Frank figures for November last year show a 44% increase in new prospective tenants compared to the same month in 2019, while available stock was down 46%. It will not need an economics professor to realise that this is likely to mean strong yields for the foreseeable future.

And existing landlords in particular, are unlikely to be backward in coming forward in terms of access those increased capital values. 2022 was always going to be a big year for buy-to-let remortgage activity, but the chances are that many landlords will be looking to capital raise against those increased values, in order to unlock the money they need for deposits on new additions to their portfolios. Which may well mean we see more purchase activity than many anticipate.

In other buy-to-let areas, we also have positive news. Whereas the lockdown did see something of an exodus from many city centre areas in particular, that trend is now in full reverse. The easing of lockdown measures and the re-opening of many offices and workplaces, will see that trend back to the cities increase even further, and we also have to consider University student returns as well.

Some suggested city centre living was about to end as a result of the pandemic, but Knight Frank in December last year said that rents were up 2.9% in Prime Central London over the year, with rents up 3.7% for Prime Outer London. Again, it shows an increase in demand here, and other cities are also seeing similar rises, especially those which do house a large student/young professional demographic.

The further positive news here of course lies in lender activity, appetite and potentially further new blood coming to market which will only ramp up the competition.

I can think of few other times – certainly post-Credit Crunch – when advisers and their landlord clients have had the kind of product options available to them as they do now. Particularly in the specialist/complex/portfolio/professional landlord arena where pricing, criteria and flexibility has been ultra-competitive, benefiting advisers and the landlord clients they serve.

All in all, the outlook for 2022 in buy-to-let – particularly the more complex parts of it – look incredibly positive. Landlords always have a sense of the opportunity before them, and where they can secure the properties they want, in the areas they require, at the prices they are willing to pay, they will be doing so, and they will be using their existing property assets to help fund their portfolio growth.

Do you need help solving a complex buy-to-let? Submit a quick enquiry and let’s get started.

At Family Building Society we offer a range of expat mortgages in over 40 countries, including most European countries and a number of Gulf States.

We’ve also made some significant rate reductions to our mortgage product range which will make your clients even happier!

How can we help?

• Expat products available on an Interest-Only basis for both Owner Occupier and Buy to Let
• We accept applications for expats in over 40 countries, and a further 9 countries eligible through our packager partners, subject to stricter requirements
• We lend to UK nationals working abroad with families remaining in the UK, and UK nationals working in the UK but paid in a foreign currency
• No minimum income for Buy to Let applications and no portfolio limits
• Minimum loan reduced to £45,000 for our 5 year fixed rate through our packager partners, and £100,000 for our 3 year fixed rate products.

Find out more.

Our Mortgage Referrals Committee is a panel of mortgage experts consisting of our head decision makers, senior underwriters and CEO who meet every weekday to explore your complex cases in the hope of reaching a positive solution.

Once you have discussed the details with one of our Business Development Managers, the team will refer the case to the Committee on your behalf and talk through the individual circumstances. The panel meets every single weekday with the outlook of giving same day decisions on enquiries, and potentially an alternative solution if needed.

What are the benefits of the Mortgage Referrals Committee to      a broker?  

• Improved chance of securing a mortgage for your client
• Consideration of unusual or complex circumstances
• Manual underwriting considering the individual circumstances of each case
• Common sense approach to decisions resulting in increased flexibility
• Same day decision in most circumstances

If you have a complex case you would like to submit to the Mortgage Referrals Committee, contact our friendly team by calling 01455 894084.

You probably already know “we do expat”. But in which circumstances? And isn’t it confusing sometimes? We’re here to make it simple. Here’s how our expat format recently helped an intermediary struggling to place a case.

Background.

Applicant 1 – UK national living & working in The Netherlands with partner & 2 children. Earned income of €115,000.
Applicant 2 – Dutch national who was providing some of the deposit.

Wanting to purchase a residential property in London, using when back in the UK but also to be used by the applicants brother whilst in London.

Purchase price – £650,000
Loan required – £520,000 (80% LTV)

The problem

The broker was coming up against the following problems:
1. Lending to someone living in Europe.
2. Income multiplier and LTV.
3. The fact the partner was a non UK national and also providing some of the deposit from an account in The Netherlands.

Our Large Loans Underwriting Team provides you with a tailored service to meet your clients’ needs.

You can email our Large Loans Underwriting Team to discuss the suitability of your proposition upfront.

At AIP, you’ll receive a call from your dedicated underwriter if there are any specific requirements to discuss.

See what’s new…

We never take our relationship with mortgage intermediaries for granted and we’re always looking for ways to improve. To do this we’ve teamed up with Smart Money People so that you can give confidential feedback twice a year on how well you think we are doing.

Take the survey.

Everyone that leaves feedback will be automatically entered into a free Prize Draw to win a £100 Amazon voucher. Only one entry per mortgage intermediary. Full terms and conditions apply. Closing date for the survey and the Prize Draw is midnight 31 January 2022.

You talked. We listened. We’ve given our old site the heave-ho and launched our brand new website with a whole load of revamped features to help you quickly find the right product and criteria for your customers.

So come take a look around and see how we’re helping to improve brokering for the better.

• NEW PRODUCT FINDER TOOL – quickly lets you know if a case could be placed
• NEW ONSITE CRITERIA SEARCH to help with that important research phase
• FIND YOUR LOCAL BDM