Inform 27th September 2024

For all self-employed income evidence, the most recent year end must not be more than 18 months before the date of the application.

From Monday 7 October, we’ll no longer be able to accept income evidence if the most recent year end is for the 2022/2023 tax year. We’d need more up-to-date income evidence.

For more information, see the ‘Self-employed income’ section of our evidence requirements guide.

LV=

Navigating later life lending in a time of economic challenges and demographic shifts

The UK has experienced a shifting economic landscape in recent years. High interest rates and inflation are reshaping our financial reality, alongside an ageing population which is redefining how people live in later life.

What’s causing high interest rates?
Property values and interest rates have always been tied to economic conditions. However, recent changes in the UK and global events have impacted interest rates to the extreme. After holding interest rates at 5.25% seven times in a row, The Bank of England has only recently made the first reduction since the Coronavirus lockdown in March 2020. However, a 0.25% reduction reflects that some inflationary measures are higher than it would like.

Key factors influencing interest rates include:

• Low productivity levels: Global events and an ageing population have decreased productivity in the UK, causing supply to drop while demand remains steady.
• Fiscal policy: Government spending and tax cuts have fuelled inflation and led to higher rates. The new Labour government has set out its intention to be fiscally constrained – if that holds, it should help drive rates lower.
• Inflation: This is the primary driver of interest rate decisions. The Bank of England is focusing on price stability rather than increasing economic strength. It is therefore unlikely that rates will reduce until inflation is under control.

But within these challenges lies opportunity – as property wealth outpaces pension savings, equity release can be a powerful tool for later life financial planning. Read the full article for more factors that are strengthening the case for equity release as a consideration in later life finance.

Paymentshield

New proposition to help advisers protect more clients

Paymentshield has announced the launch of its “Refer and Protect” proposition, with the latest development enabling an immediate automated quote to be sent digitally to your customers to purchase in their own time.

The full referral proposition has been developed to empower advisers who are time poor or don’t have GI permissions but still want to ensure their clients receive quality insurance protection for their home.

The latest technology release from Paymentshield further enhances the referral options available, meaning advisers now have a digital solution which enables them to either seamlessly refer clients to a team of Paymentshield’s in-house insurance specialists to receive advice on a chosen date and time, or provide an instant automated quote to clients by email or text.

The automated quote is available for both Paymentshield’s Home and Landlord’s Insurance, also enables clients who begin an online journey to still speak to a member of Paymentshield’s dedicated referral team at any point if and when they need advice.

The service also allows you to track referrals via a new intelligent user interface, which separates both telephony and online referrals into key milestones. For example, for phone referrals, users will see: call arranged, customer contacted, customer quoted and the final outcome. This means advisers can see exactly where each client is in the customer journey, giving them confidence that their client is being looked after.

The new proposition will be supported by Paymentshield’s “Refer and Protect” business development team, which will proactively support those firms who could benefit from embedding a referral approach within their business. Alongside the referral technology itself, the team will play a significant part in Paymentshield’s mission to ensure every home is properly protected.

To learn more about referring to Paymentshield, visit the Paymentshield website here.

Virgin Money

Fix & Switch – Fix for 5 years, or flex after 2

Fix and Switch is a five-year fixed rate mortgage with a difference – its ERC only lasts until the end of year two. After that, there’s no ERC. This means your customers get five-year protection against rates going up, but if they go down, they can switch to another deal after two years (which is where you come back in).

Take a look at our factsheet for more information.

Kensington Mortgages

Teachers Building Society

Remo + debt-reset up to 90% LTV

Aviva

Introducing Mick’s story

When Mick had to stop work due to an injury his income protection policy helped him in more ways than one, letting him focus on recovery instead of worrying about money.

Discover his story and learn how your clients like Mick, can benefit from the financial, physical and mental support with income protection from Aviva.

Watch Mick’s story below

Market Financial Solutions

Providing a way forward for a BTL Landlord with adverse credit

Pssst… Don’t forget.. select TMA Club as your procuration fee payment route to secure your enhanced procuration fees when submitting your case directly to MFS.

Complicated BTL deals are MFS’ specialty, and it’s there for borrowers who will likely struggle with mainstream lenders. Refinancing, for instance, can be tricky for any property investor when the economic climate is uncertain. But, when missed payments are added into the mix, it can add a whole new level of difficulty.

A borrower required refinancing capital to cover an existing facility, and progress with their plans. However, as MFS reviewed their details, it found a financial issue in their background. The underwriter had to address this problem, and find a way forward for the borrower. What’s more, they had to also make sure this issue didn’t derail their exit strategy.

During MFS’ initial review, it emerged that the borrower had missed financial payments in their background. This threatened to slow down the deal. But, the underwriter dug deeper into the borrower’s details.

It turned out that this missed payment had been resolved and MFS could accommodate the borrower’s potential adverse credit record within its remit. With this addressed, we turned to the refinancing exit strategy.

Even with the payment issue, MFS saw the borrower had several external lenders they could refinance with down the line. What’s more, as the property already had tenants in situ, bringing in immediate income, MFS felt assured that this investment held long term stability.

If you have any complicated cases on your books which need this kind of flexibility, the MFS team are ready for your call

Click here.

Greenfield Mortgages

Bridging Finance on the Rise: How Brokers Can Leverage Short-Term Lending Solutions

At Greenfield Bridging, Business Development Managers are mandated to make quick decisions (as qualified underwriters) and have a unique perspective on the growing importance of bridging finance. This combination of client engagement and lending decision-making offers valuable insights into why bridging finance is seeing such rapid expansion. According to the latest figures, bridging loan completions surged to a record £1.74 billion¹ in Q2 this year, reflecting a 15.4% increase over the previous quarter. These numbers demonstrate how vital short-term lending has become.

This article will explore the drivers behind this growth, when bridging finance is suitable, and how brokers can use it to meet clients’ evolving needs.

1. What’s Driving the Surge in Bridging Finance?

2. Bridging Finance Beyond Property Transactions

3. Bridging for Complex Client Scenarios

4. Key Considerations for Brokers When Using Bridging Finance

5. Streamlining the Bridging Loan Process

Read the full article here.

Metro Bank

Limited Company Success: The SPV Approach

Metro Bank’s recent launch into Limited Company Buy to Let ultimately provides greater flexibility and choice for your customers whether they are looking to purchase their first buy to let property through a limited company or to grow their portfolio.

Meet Emma & Simon

Emma and Simon are owner occupiers who live with their two children in their family home. They are both directors of their own trading limited company with 60% and 40% shareholding respectively. They wish to purchase a couple of BTL properties within a new SPV as an investment. The customers are using personal savings as the deposit for the new BTL purchases. Unfortunately, Simon has a couple of missed payments on his credit card and Emma has a small CCJ from an unpaid parking ticket.

And how we can help…
At Metro Bank, we are able to layer our criteria to create the perfect solution for your customer. In this scenario, we can consider missed or late payments across multiple accounts as long as they don’t exceed a status 2 within the last 24 months. Any other missed payments that are older than that can be ignored. We can also accept unsettled CCJ’s and/or Defaults up to a maximum combined value of £500 or fully settled CCJ’s and/or Defaults up to a maximum combined value of £1,000. Any amounts higher than this would have to be settled for at least 3 full years before the scenario could be considered.

Criteria highlights:

• Maximum 75% LTV
• 125% of the mortgage interest amount calculated at our standard Buy to Let stress rates
• Up to four Directors/Shareholders accepted. They must be the same people and have 100% shareholding, all Directors must be shareholders
• No minimum income (subject to rental void plausibility checks) but at least one Director must be earning an income (other than rental)
• Portfolio landlord accepted – maximum of 10 properties with Metro Bank (under £10m aggregated debt), maximum of 10 properties in total
• Maximum age 85 (mortgage term based on the oldest applicant)
• Limited Company must be non-trading and must be limited to solely holding residential property and not engaged in wider activities (must be an SPV). Acceptable SIC codes (no other SIC codes are accepted individually or in conjunction):
  o 68100 – Buying and selling of own real estate.
  o 68209 – Letting and operating of own or leased real estate.
  o 68320 – Management of real estate.

Please ensure you or your customer verifies the solicitor firm is on the Smoove panel and that the firm handling the application is able to process limited company buy to let mortgages before submitting.

For full details, please refer to our Mortgage Lending Criteria Guide and Product Guides.

Contact us
Get in touch with your local Business Development Manager; they would love to hear from you. Find your nearest BDM here. Or call our Broker helpdesk on 020 3427 1019.

Leek Building Society

Leek Building Society partners with Own New to offer innovative Own New mortgages

Leek Building Society is excited to announce a new partnership with Own New. This collaboration will enable the Building Society to offer the innovative Own New Rate Reducer mortgage through brokers, providing a flexible and affordable path to homeownership.

The Own New Rate Reducer mortgage is a unique product designed to lower interest rates and reduce monthly repayments for the initial fixed-rate term.

Leek Building Society has multiple standout features in its approach to lending including:

• 95% LTV for new build houses and flats
• Family gifted deposits accepted
• Reduced early repayment charges
• No credit score – credit search based approval
• High LTV with thin credit files accepted
• Automated DIP through to application via MSO system (soft footprint at DIP stage)

“Our Own New Rate Reducer product is a game-changer for those looking to buy their dream home” said Helen Wainwright, Director of Lending at Leek Building Society. “With lower initial rates, it’s a more affordable way to step onto the property ladder. We’re thrilled to be working with Own New on this innovative initiative.”

Eliot Darcy from Own New added, “We’re thrilled that Leek Building Society is now offering Rate Reducer mortgages. This opens-up Rate Reducer to more people with a bigger range of circumstances, including people with a 5% deposit buying a new build flat. Our goal is to make buying a new home more affordable for everyone, and this partnership allows us to bring real, tangible savings to buyers across the country.”

For more information about the Own New mortgage and how to apply, please visit https://www.leekbs.co.uk/intermediaries/own-new-mortgages/ or contact Leek Building Society Intermediaries Team on 0808 2819 309.