Inform 11th February 2021

Your move: Keeping the business agile in an ever-changing landscape.

Eligible CEO, Rameez Zafar, has pulled together his brutally honest thoughts, guidance and expertise in this new playbook series – The Eligible Gambit.

The series will focus on key macro events and factors that are on the horizon in 2021 and how to keep your “chess moves” fresh to navigate potential obstacles.

Kicking off the series is Game One: the stamp duty holiday.

Subscribe now to get this free download, market information, client-ready guides and other exclusive content to help you keep your customers.

Semi-commercial and mixed-use property

InterBay’s Semi-commercial criteria could help those looking to diversify their portfolios or invest in mixed-use properties, with up to 70% LTV available on properties valued up to £2m.

Other key criteria include:

• Two, three and five-year terms (with identical rates on three and five-year options)
• Commercial income accepted as well as residential

Download their latest Product Guide and find your next semi-commercial case solution.

If you have questions, please contact your local Specialist Finance Account Manager or speak to their broker sales support team on 01634 835007 and they’ll be happy to help.

Making sweeping changes

LendInvest makes sweeping changes to its BTL suite increasing maximum loan sizes for HMOs and MUFBs

LendInvest, the UK’s leading platform for property finance, has made a host of important changes to its Buy-to-Let suite, including the introduction of higher LTV products; and an increase in maximum loan sizes.

And here are the changes at a glance

• 80% LTV net on standard properties plus rate drops
• Increased LTV and rate drops on HMOs
• Increased loan sizes
• Cashback towards legal fees of 0.25% of loan amount up to £1000
• Reduced pricing for tier 2 borrowers
• Refreshed criteria, including HMOs up to 15 rooms and increased exposure limits.

Got a case that needs some love?

Find out how KRFI could support yours today.

With Valentine’s Day almost here, they wanted to remind you that if you’ve got a case that needs some TLC, Kent Reliance could help. Their experienced underwriters are able to individually assess each Buy to Let and residential case meaning they could give it the attention it deserves and help where mainstream lenders can’t.

And if you’re looking for a Valentine’s treat, they have launched a quiz to celebrate their love of odd cases. All you have to do is answer five quick questions regarding KRFI’s criteria correctly before 8pm on 11 February and you’ll be entered into their prize draw for the chance to win one of five £50 Just Eat vouchers.

Minimising Purchase Drop off Risk at the Stamp Duty Deadline.

February has arrived and I always feel a sense of optimism about what is to come, but perhaps especially this year given the incredible challenges of 2020 and the hope with which we start 2021. At Foundation, we believe we are particularly well placed for a strong year; our appetite to lend, our focus on borrower needs and the commitment of our team.

That said, I think it’s very difficult to look even more than a few months into the future, predominantly because of the stamp duty holiday deadline that is racing into focus.

So, what does this mean?

Well, it sharpens the value of prioritisation when it comes to pipeline business. This was certainly a choice we made at Foundation back in November.

The Guild of Property Professionals’ asked 1,000 buyers in mid-December what they would do if it looked like their transaction would not complete pre-31^st March. Close to a third (31%) said they would pull out. Zoopla recently said there were currently 418,000 property sales progressing towards completion; extrapolated out that could mean close to 130,000 sales aborted, having a significant impact on resource and obviously income for advisers.

Evolving processes to meet the challenge

Our aim over the next two months is of course to ensure we have all the resources, in the right places, in order to do our very best for every borrower. We now accept ‘No-Search Indemnity Insurance’ for both purchase and remortgage transactions (excluding HMOs and Multi Unit Blocks), with the policy available in lieu of Local Authority and/or other searches.

What none of us can do is guarantee a pre-31^st March completion, but hopefully as we embark upon a new year, we are able to introduce such measures and do everything we can to take as many cases through to their final destination.

It will be a busy quarter ahead, of that there is no doubt, but I have no doubt it can be a very successful one for the vast majority of clients.

Want more updates like these? Register now.

You’re the first to know.

Buckinghamshire Building Society are delighted to announce that they have extended their popular CARE mortgage product across the whole of England and Wales, following its success in Buckinghamshire. This product is specifically aimed at their incredible emergency services, offering 90% LTV.

Their hope that this product makes it as easy as possible for Emergency workers to join the property ladder or re-mortgage, after what has been an incredibly challenging year for them and with Valentine’s Day just around the corner, Buckinghamshire Building Society want to show that they really care.

To find out more about Buckinghamshire Building Society’s Care Mortgage, please click here.

In addition to the CARE product, the Buckinghamshire Building Society offers a wide range of mortgage products to suit everyone. They pride ourselves on offering specialist solutions so if it’s complicated, think Buckinghamshire Building Society.

Some of their popular products include:

• Family Assist – perfect for first time buyers, in need of a little help from their family.
• Bucks Solutions – perfect for those customers with impaired credit.

To find out more about them and all the mortgage products they offer, visit www.bucksbs.co.uk or call Julie Hanif (South) on +44 (0)1494 418254 or Claire Askham (Midlands & North) on +44 (0) 1494 418257 and remember, if it’s complicated, think Buckinghamshire Building Society.

For any queries, please contact myself, or Fiona Jackson, Head of Marketing fionajackson@bucksbs.co.uk

Webinars created for the intermediary community

After the success of last year’s webinars, our BDMs are dusting off their webcams and preparing for a brand-new series of regional and national webinars that promise to be bigger and better for 2021.

Featuring
You can expect to hear from more guest speakers on a variety of subjects, all designed to make things easier for you, including broker registration. We’ll also be welcoming back award-winning BDM Rachael Hunnisett, who’s been recognised for her work on the webinars by Mortgage Finance Gazette.

Rachael Hunnisett, Business Development Manager:
“Last year, meeting virtually with brokers was my highlight and I’m delighted to be delivering the webinars again. The content is being designed around things you said would be most useful to you. It’s going to be fantastic and I can’t wait to share more details with you soon!”

Don’t miss out
Watch this space for the webinar ‘who, what, where and when’. And, if you can’t wait until then, contact your local BDM, who will be delivering regional webinars on subjects that are relevant to you.

Landlords could be eligible to borrow more

Coventry for intermediaries has reduced the reference rate on its BTL 5 Year+ Fixed rate products. This means landlords could be eligible to borrow more if they opt for the security of a longer-term product.

Jonathan Stinton, Head of Intermediary Relationships, says, “This is a positive change to our lending policy and one that will benefit our brokers’ clients. Along with our straightforward BTL policy which includes a simple ICR calculation as well as no minimum income or minimum time in employment criteria, reducing the reference rate demonstrates our ongoing commitment to the Buy to Let market.

As with all of Coventry’s standard BTL lending criteria, the change also applies to portfolio landlord applications. If a client with four or more Buy to Let properties chooses a Five Year+ Fixed product on the subject property, they could also benefit from an increased loan amount.

Jonathan says, “I’d encourage brokers to try our BTL calculator to see how much their landlord clients could borrow. And they can speak to one of their BDMs or use our live CFI web chat if they have any questions about the change.”

You can find the calculator here.

Bridging and Development

Opportunities and Solutions

• Wednesday 17th February 2021 @11am
• Thursday 18th February 2021 @ 2pm

Presented by Stu Bryce, Buildloan National Account Manager, Relationship Manager

• Free to attend
• CPD Certificate Provided

Join Stu Bryce for the third in our series of webinars which throws the spotlight on Bridging and Development Finance and the numerous opportunities that you could be missing out on, simply because of a lack of understanding of the solutions available. This webinar will help you to understand this specialist market, see the opportunities, service more clients and earn more money.

There are numerous occasions where bridging is a viable option – sometimes the only option.  We’ll take a look at a range of different case study scenarios including downsizing, garden plots, and refurb to lets.

We’ll also look at development finance and options for building several properties.  Whether your client is an experienced or inexperienced developer, we’ll explain how to handle this type of enquiry and why BuildLoan is your perfect partner when it comes to doing this type of business.

Aldermore’s First monthly round-up

They wanted to share with you some of the news, articles and changes they have shared with their broker network and customers recently, just in case you missed anything!

They hope you find this useful, if you’ve got any feedback, then let them know. You can reply to this email or get in touch with Nick, Matt, Steve or James.

• Stay positive and be proactive, says Jon Cooper, head of mortgage distribution
• Changes to our application process
• Why should first time buyers use a mortgage broker?
• Buy to let city tracker

Helping identify opportunities

Helping you to identify opportunities to introduce GI to your clients, Paymentshield have provided you with a selection of sales processes and tools to get the conversation flowing this Valentines.

To help you be admired for your GI skills, whilst getting your clients in the mood for a GI conversation, you can also download Paymentshield’s latest eBook!
Download now

Let Dean Marson, Paymentshield’s Regional Sales Manager explain how you can spice up you GI conversations this Valentines by using an alternate sales process in his latest blog.
Read the blog here

This Valentines, there are 4 ways to #BeAdmired by your clients;

BE BRILLIANT
Help give yourself that confidence when it comes to GI with Paymentshield’s thought provoking CPD resources. They’ve lovingly arranged for you in one place to inform, educate and even entertain.
Explore CPD Resources

BE KNOWLEDGEABLE
Don’t be caught out by your clients ‘popping’ any surprising questions.
With access to Paymentshield’s online FAQs you’ll always be admired for your knowledge about our proposition.
Explore Online FAQ’s

BE QUICKER
Speed is only to be admired if the outcome meets expectation.
Keep your finger on the pulse by preparing your clients a Quick Quote, which provides an indicative quote for Paymentshield’s 5 Star Defaqto rated Home Insurance from just a few questions
Login to Adviser Hub

BE CHATTY
If we waited for someone else to start the conversation, the world would be a much quieter place.
Download their video to help your clients see the value of your advice and to make sure they’re always comparing apples with apples.
Download the Video

Buy to Let – The opportunities for advisers in 2021 | Caroline Mirakian, Head of National Accounts

A year on from entering the Limited Company Buy to Let space, they continue to monitor movements and trends across the sector in what was a trying year for many landlords.

According to Hamptons estate agents, landlords setting up Limited Companies accelerated in 2020 with an increase in 23% on the previous year.

Remortgage opportunities

2021 marks the five-year anniversary of the 3% stamp duty surcharge which led to a clamouring from landlords to secure 5-year fixed rates before the implementation.

This of course represents a big opportunity for brokers, and there’s sure to be plenty of landlords who are now operating in a limited company structure who may be looking to re-arrange their portfolios.

By starting these conversations early in the year, brokers can get ahead of the rush and ensure that all avenues can be explored with their customers in good time.

Purchasing to continue

On the purchase side, there may be a rush to complete before the return of SDLT, but there’s an increasing belief that there will be no cliff edge effect come 31^st March.

On the contrary, there are predictions that there will be a portion of the landlord community who are waiting for less competition for properties and the potential of a reduction in house prices.

This has been ratified by a sample of brokers who they recently surveyed, with 60% predicting that purchase activity will remain the same following the stamp duty holiday.

How Pepper Money can help brokers with Buy to Let

Pepper Money continue to offer both Limited Company & Private/Individual Buy to Let ranges via their distribution partners.

In our recent survey, two key challenges were identified by brokers when selecting a lender for their landlord clients. They were Interest Cover Ratio (37% of the vote) and approach to background portfolio (32% of the vote).

These are areas that Pepper Money can help brokers and their landlords with.

Pepper Money have a favourable Interest Cover Ratio, particularly on 5 year fixed rates where they are able to use 125% of pay-rate for Limited Company landlords and 140% for private/individual landlords. This is irrespective of applicant tax band.

Their approach to background portfolios means there’s no cumulative LTV gearing limit, and Pepper Money don’t stress the customer’s other properties in the background.

For more information about Pepper Money’s Buy to Let range, visit their website or contact your local BDM here.

IMPORTANT – SUBMISSION GUIDANCE

Help them help

Please fully read the submission guidance below to ensure a smooth application experience for you and your client.
*Incomplete or missing documentation will delay the initial processing of your application*

5 Steps to a successful submission:

1. You’ll need a printer and scanner to submit to the Society.
2. Complete and print off the application form leaving the signature fields blank. Please ensure all other fields are correctly and fully completed.
3. As the intermediary, please physically sign in the relevant boxes on pages 2 and 3. Unfortunately we are unable to accept automated or computer font signatures.
4. Arrange for your client to review the application and physically sign the declaration page. Again please note that we are unable to accept automated or computer font signatures.
5. Once you have completed the above steps and received the signed declaration from your client, upload the fully signed application form to the portal, as a single document. Also make sure you upload the budget planner and other supporting documents required to support your application.

Please refer to the checklist at the top of page 1 of the application form to make sure you have included all the required information. If you have been advised of any specific additional documents that we require, please ensure that these are also uploaded with the application form.

Once correctly received, we will start processing your application within the advised service levels. As the Society requires an original direct debit form this will be sent directly to your client for completion and return. If you require support when submitting please contact your BDM or Telephone Account Manager who can guide you through the process:

Covid-19 changing customer priorities, Masthaven research shows

Masthaven’s latest Broker Beat research has found that Covid-19 is set to cause real change in the lending market, as customers focus on new priorities and look for greater flexibility from their lenders.

“Customers have also been clear about what they want from lenders. With so many being impacted by the pandemic, customers are looking for lenders who have a flexible approach and can meet their needs.”

“The Stamp Duty Holiday deadline has also undoubtedly increased demand for speedier transactions, while customer service, which has always been a crucial part of any business, has taken on new importance and become an essential duty for lenders. It’s important that lenders listen to their customers and adapt accordingly.”

Rob Barnard, Director of Intermediaries at Masthaven

To find out how they can help your customers take a look at their website or call the Lending Specialist Team on 020 7036 2020

You can register to place business online and they will have you set up in no time.

Bridging Trends that shaped the bridging finance in 2020 via impact packaging

According to recent data compiled by MT Finance from a number of their key introducers, including Impact:

Annual bridging lending fell by £278 million due to Covid-19 disruption. £455 million of bridging loans were transacted by Bridging Trends contributors in 2020, a 38% decrease on the previous year.

£112.86m in bridging loans were transacted by contributors in Q1 2020 before volumes plummeted to £79.4m in the second quarter as restrictions continued.

Average monthly interest rates increased in Q1 to 0.8%, before peaking at 0.85% in Q2. The second half of the year saw a drop in pricing with the rate falling to 0.78% in Q3 and then 0.72% in Q4.

The average LTV also fell to 50.7% in 2020, down from 52.9% in 2019 and 55.6% in 2018.

Second-charge loans accounted for an average of 23% of the market in 2020, up from 20% in 2019 and 17% in 2018. This 3% year-on-year increase reflects a strong lending trend.

The second quarter of the year saw second-charge transactions peak to the highest level recorded, at 26.1% of gross loan volume.

In the fourth quarter, a traditional chain break was the most popular purpose, accounting for 23% of all transactions.

This reflected the slow processing times in the mortgage market as borrowers tried to take advantage of the stamp duty deadline.

The average loan term in 2020 was 12 months, the same as in 2019. The average completion time averaged 50 days, up from 47 days in 2019 and 45 days in 2018.

Why use Impact specialist finance for Bridging?

Bridging can be arranged by Impact on a regulated or non-regulated basis. They have a dedicated bridging team who are experts in their field, and are there to help with your bridging and short term lending enquiries.

Call the impact packaging team today on 01403 272625 to find out more.

Shifting strategies: Property wealth and inheritance planning are changing

Increases in life expectancy mean inheritance is often being passed onto the next generation long after their years of greatest financial pressure have passed. As a result, many HNWIs are adopting a more strategic approach to managing their estates and turning to alternative, emerging financial solutions. David Forsdyke, Head of Later Life Finance at Knight Frank Finance, explores this growing trend

The UK’s ageing population has transformed the way we think about inheritance.

Approximately a quarter of people living in the UK will be aged 65 or older by 2042, up from less than one fifth in 2016, according to the ONS.

Meanwhile average life expectancy will surpass 90 over the next 25 years for both sexes, up from 80 for men and 83 for women today.

All this means that wealth is being passed to the next generation later on in their lifetime. The average age of individuals when their last-surviving parent passes away is expected to rise from 58 for those born in the 1960s, to 64 for those born in the 1980s, according to the Institute for Fiscal Studies (IFS). For about a third of people born in the 1980s, this won’t happen until they are in their 70s at the earliest.

This shift alters the dynamics of inheritance. By the time sons and daughters hit their mid-sixties, life’s greatest financial pressures, including raising children, school fees, and climbing the property ladder, are behind them.

This in turn is driving many HNW families to adopt new methods of passing on wealth to their next of kin, both when the need is at its greatest and while they are still able to see the benefits of their legacy.

Modern forms of equity release are proving popular solutions within this trend, as they allow individuals to unlock property wealth that has been accruing over decades. Knight Frank Finance estimates housing wealth held by those aged 55+ alone now stands at more than £3.1 trillion.

Once considered to be an option of last resort for homeowners struggling with their finances, sweeping regulatory changes, coupled with product innovation, have modernised the industry. It is now considered a strategic move for those with future estate planning in mind.

Meanwhile ultra-low rates and advantages when it comes to mitigating inheritance tax bills mean much of the growth in this market has been driven by HNWIs, with equity release products fast becoming a mainstay on the money menus of independent financial advisors (IFAs).

Property owners unlocked £963 million in property wealth in Q3 2020 alone, according to the Equity Release Council. That was broadly in line with the previous year, despite the pandemic, underlining that long term demographic shifts are the main drivers of demand, rather than more temporary reactions to economic crises or surges.

The concept of gifting property wealth to family members in their seventies is certainly making sense to the clients we advise. It presents a potential opportunity to reduce the value of their estate from a tax perspective and, at the same time, allows them to enjoy the very tangible benefit they are providing to the important people in their lives.

A desire to mitigate the impact of inheritance tax on their estate is also of growing importance to our clients, amid a long-term expansion of inheritance tax (IHT) receipts, which stood at £5.2bn in 2019/20.

One client I advised recently, who owns a £3 million home, was concerned about leaving his children with an inheritance tax bill in the region of £1 million. At the age of 76, we advised him on securing a lifetime mortgage on his property, the most popular form of equity release, which allowed him to make gifts to his two children of £500,000 each. In doing so, he not only significantly reduced the potential Inheritance Tax bill (subject to certain rules around making gifts, or what HMRC call ‘Potentially Exempt Transfers’) but also provided his beneficiaries with a financial boost during his lifetime.

Innovations in lifetime mortgages are underpinned by robust consumer protection, including FCA regulations and the Equity Release Council standards framework.

David Forsdyke leads the Later Life Finance Team at Knight Frank Finance and has over 15 years’ experience in the equity release market. In 2009 David joined the FCA and became regarded as a subject matter expert on equity release. He now sits on the Equity Release Council’s Risk Committee and their advisory panel.

Contact David directly if you’d like to find out more about emerging financial solutions for inheritance planning and property wealth management: david.forsdyke@knightfrank.com, +44203 869 4706. Knight Frank Finance are an Equity Release referral partner for TMA members.