Inform 17th June 2022

On Wednesday 15 June we’re updating our residential affordability rate to reflect May’s Bank of England base rate increase.

Our affordability calculator will be updated to reflect this change. Please use this calculator to make sure you get an accurate reflection of what we can lend your clients.

Pipeline rules
Our usual pipeline rules will apply. All full mortgage applications (FMAs) already submitted on Introducer Internet by close of business on Tuesday 14 June won’t be affected by these changes. Any FMAs submitted from 6am on Wednesday 15 June, or where a material change is made to an FMA that was originally submitted before close of business on Tuesday 14 June, will be assessed using our updated lending policy.

How are we supporting the change?
We’re updating the SFI website affordability calculator.

Introducing our brand new broker portal…

Simple login and intuitive account management means you get what you’re looking for, fast. And our smart filtering means you can find exactly the product you need.

If a product isn’t available, you’ll always know why. And once your case is submitted, our portal gives you complete visibility.

Our form-filling is as efficient as possible, with no unnecessary questions and a rapid response to any application.

See our broker portal in action

Newcastle Intermediaries have recently reviewed it’s offer validity and extension process and the revised process, effective immediately, is outlined below:

Full details can be found on http://www.newcastleis.co.uk/residential-lending-policy.aspx

For any specific enquiries, please contact our Intermediary Lending Team by email intermediary.lending@newcastle.co.uk or telephone 0345 602 2338 (our lines are open Monday to Friday 8am to 6pm) and one of our Customer Service Advisors will be happy to assist you.

Poppy is a first-time buyer looking to purchase a new build flat. She has been saving for a deposit but still needs some help from her parents.

She has been worried about a CCJ for an unpaid parking ticket she received in 2019, and that it could ruin her chances of owning her own home after being turned down by various high street lenders. But Vida can help!

Poppy’s parents used some of their savings and gifted her a part of the deposit. The developer of her flat also offered a 5% incentive which she is using to boost her own deposit.

Poppy can borrow up to 90% LTV for the flat and Vida also considers her CCJ (received over 24 months ago) on the Vida 24 tier. Poppy can finally become a home-owner in a brand new flat of her own!

We have recently enhanced our criteria across our Residential range… we’re resi to rumble!

• Assessment fee removed from all residential products
• £0 product fee payable on all Fee Saver products
• Fee Saver benefits enhanced – one free valuation for properties valued up to £1m, £500 contribution towards legal costs paid on completion
• 90% LTV available on tiers Vida 48 – Vida 12. 85% LTV now available on Vida 6

Coupled with our New Build criteria

• 6 month offer on new build with a further 6 month extension considered
• Up to 4 applicants with all incomes considered
• Up to 100% Gifted deposits from family considered
• Builders incentives up to 5% of the purchase price
• Complex incomes (including commission, overtime and second jobs)

See how we can help your specialist residential clients, by taking a look at our residential products and criteria on our website.

Alternatively, take a look at our New Build Hub.

Buy-to-Let

We now have products to include:

• New 60% LTV product
• New Joint Borrower Sole Proprietor product
• Increased loan size on certain products
• Flat £999 Scheme Fee across certain products

For full details of the product range please visit https://www.chorleybs.co.uk/intermediary/ and visit the Buy-to-Let section.

Right to Acquire – You asked, we listened!

At your request we have now introduced ‘Right to Acquire’ into our lending criteria.

For further details please visit:  https://www.chorleybs.co.uk/lending-criteria/ or call one of the team on 01257 235 001.

Did you know???

Second Homes – We currently lend up to 85% LTV for a second home, on our standard range of mortgage products.

If you have a client that is looking to purchase a second home, whether that is for a dependent family member or for a commuter base during the week, please give one of the team a call for further details – 01257 235 001.

Kensington’s next webinar will be taking place on Wednesday 22nd June 10am – 11am and it will focus on Inflation, Affordability and how it’s impacting the mortgage market.

Register here

LiveMore reduces ERC period on long term fixed products in a bid to support customers through uncertainty

This week, LiveMore announce that they will be reducing their ERCs on their ‘unique to the market’ long-term fixed products – with the highlight being their popular 10YR Fixed now only having an early repayment charge for 5 years.

Alison Pallett, Managing Director of Sales, LiveMore says: ‘we recognise the turbulent period we are in with interest rates, rising inflation and the need for our customers to have the peace of mind that a longer-term fixed product brings. There has never been a better time for a customer to fix; so the reduction to 5 years ERC on our 10 Year Fixed products, plus a reduction to 10 years ERC on our 20 Year Fixed and Fixed For Life products, goes some way in removing some of the barriers attributed to these longer-term products.

As with all products in the LiveMore range, all options come with the added benefit of;

• Being fully portable
• No early repayment charges in the event of major life events*
• Up to 10% capital repayment facility every year
• Payment break of up to 6 months available in the event of major life event*

*Death of a partner, or move into long term care

Pallett also says “We fully recognise the work and effort that intermediaries put in to give their customers the longer-term certainty and stability they require so our reduced ERCs, especially on our 10YR Fixed, should help benefit them even more”

View LiveMore’s products | Register with LiveMore today

One of the biggest decisions facing landlords in recent times has been whether to incorporate new purchases, or existing portfolios, into a limited company structure.

Historically speaking, this was a far more straightforward decision for many pre-2016. However, over the past five years or so, we have seen a wave of well-documented tax changes and a substantial closing in the gap between the headline rates of limited company options in relation to ‘standard’ buy-to-let products. The volume of limited company deals has also improved dramatically during this time.

To incorporate or not to incorporate remains a hot topic throughout the industry. We often see articles around the benefits of limited company offerings and this education process remains vital. But for the purpose of this piece, let’s turn this approach on its head slightly to focus on three drawbacks associated with limited companies – 1. Tax and capital gains, 2. Conveyancing and 3. Personal guarantees and outline, how landlords with the support of intermediary partners, can overcome them.

Tax and capital gains

We don’t need to dwell too much on the specifics but purchasing an investment property within a limited company structure – rather than as an individual – has become much more appealing in recent times due to various government-led modifications from a tax perspective.

Having said that, there is a major tax-related factor which limited company landlords still need to take into account – Capital Gains Tax. The main reason being that

there are no Capital Gains Tax allowances for limited companies when selling investment properties compared to when holding the property as an individual, as Limited Companies are not liable for Capital Gains Tax – Corporation Tax may apply here.

The biggest takeaway from this is the value attached to specialist tax advice for landlords. Of course, tax experts won’t enable landlords to avoid the inevitable but they will help ensure that they remain as tax efficient as possible. Now intermediaries aren’t expected to administer such advice themselves but they can help facilitate this by having a two-way referral process in place with a trusted tax partner. And this is a relationship which could prove to be a win-win solution for their clients and their business.

Conveyancing

The conveyancing process can be something of a minefield for limited companies, especially for those who don’t have a relationship in place with a solicitor who is sufficiently experienced in such transactions. It’s also the case that some lenders will force the borrower to only use a conveyancer from a limited panel, which can cause its own set of challenges.

In short, such cases tend to involve a more complex legal process, meaning landlords need to think carefully about their legal representation. If they already have a trusted legal adviser then the option of working with lenders who don’t restrict this choice may appeal. And intermediaries who understand how certain lenders operate in this area can better support their landlord clients in making the right choices for them.

 Personal Guarantees

Typically, one of the benefits outlined when operating as a limited company is that it removes any personal liability from creditors. This is a valid point but, when it comes to funding, this doesn’t stop many lenders from asking for a personal guarantee. On a positive note, not all lenders carry such a caveat and it’s important for advisers to understand and point out that options are available for those landlords who are – for whatever reason – not comfortable in signing a personal guarantee.

Whether your clients choose to invest in buy-to-let properties in their own name or through a limited company, the market is becoming ever more competitive and more complex. A combination which only serves to highlight the value of the advice process and the opportunities on offer for proactive intermediaries.

Andy Valvona, National Account Manager, CHL Mortgages

We are pleased to announce that we have enhanced our portal and origination platform as we continue our journey in providing exceptional service.

The portal has been enriched with the following functionality:

• AIP Referrals directly to the mortgage desk
• Ability to submit an AIP (application) directly to underwriting and into the origination platform
• Ability to upload supporting documentation against the case in the portal
• Real time case tracking/case progression

All new business entered onto the portal from 13/06 will benefit from the enriched functionality.

Click here to read our user guide to step you through the changes. The mortgage desk and BDMS will be contacting you also to arrange some training sessions.

We would like to thank you for your continued support.

If you have any questions please call the mortgage desk on 0800 980 6086 or alternatively email us at mortgagedesk@centraltrust.co.uk

Our clients were a couple who owned an unencumbered former farmhouse.

The property was recently refurbished and highly desirable as a holiday let.

The property was valued at £1,000,000 with an additional outbuilding for development.

Our clients were seeking to raise £300,000 as a gift to their daughter to buy her own home.

Case Outline

The challenges our clients faced were:

✔ Lack of provable income – the clients live off their rental income but over the previous tax year they’d been reinvesting their income to refurbish this property and another holiday let. Their provable income was around £1,500 in total.

✔ Complex property – the subject plot included a separately lettable annex which was entirely self-contained but on the same title as the main farmhouse. There was also a derelict barn pending planning permission to convert to living space.

✔ Bespoke refurbishment – the property had been geared heavily towards holiday makers including a jacuzzi and dedicated games room reducing its appeal for long term (AST) letting.

Solution Provided

We approached a number of dedicated holiday let lenders but they would not proceed due to the level of income and complex nature of the property. Specialist lenders were also unable to accept this case due to a perceived lack of long-term letting demand.

Thanks to our excellent relationships with lenders we were able to agree a bespoke arrangement with a lender who was able to accept an application outside their usual risk appetite with a nominal loading to their standard holiday let product range.

With so many lenders on panel able to consider holiday let applications (including for first time landlords and limited companies) this case demonstrates there are very few scenarios we cannot find a solution for.

Product chosen

4.39% 5 year fixed with a 2% lender fee and a £150 booking fee (*as of May 2022).

If your client is looking to purchase a buy-to-let property through a company, Vantage Finance can help! We will source the most suitable product for your client, managing the entire process while keeping you updated throughout.

 Why Vantage Finance?

• No minimum income
• Non-standard construction properties
• New builds accepted
• Exclusive access to a number of specialist lending products and rates
• Adverse credit can be considered
• Proven track record with portfolio finance
• Generous rental calculations
• Local authority and housing association tenants can be considered
• Lenders with no credit scoring available

If you would like more information click here.

Get in touch with the team and find out how Vantage Finance can help you and your buy-to-let clients with their limited company applications.

T: 01753 883195
E: enquiries@vantagefinance.co.uk
W: https://www.vantagefinance.co.uk/contact-us

Chris Kirby, Head of Specialist Distribution & Key Accounts at The Mortgage Lender joins Dale Jannels, MD of Impact Specialist Finance to discuss TML’s range of products and services.

The Mortgage Lender helps people with unique circumstances into the homes of their dreams. Supporting the self-employed, the entrepreneurs, the help-to-buyers, and the buy-to-letters – that’s real life lending.

Watch the webinar HERE!

Watch your topic of interest

You can jump to the questions of interest using the timestamps shown:

00:42 Overview of how TML lend

01:15 Who are TML?

02:06 Self Employed

04:26 Complex Incomes

05:44 Credit Impairment

09:02 Buy to Let

11:35 LUMI Range

16:12 Service Levels

17:42 Valuations

19:41 Volumes for the rest of 2022

 Have a case you would like to discuss?

Call the impact packaging team now on 01403 272625