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  • loanarranger
    replied
    Such questions are indeed asked when meeting the Regional Managers but one seldom gets the truth.
    Having been a lender for over 50 years one is always conscious of having to give the impression that business is indeed good and not to communicate any negatives, that is particularly pertinent to representing PLC’s where any admission of low business levels could have a negative effect on the share price even though every quarter provisional results are released in briefing notes to City Institutions.
    i concur with your final paragraph , where lenders have an above SVR and do not offer loyalty switch options they have to rely on originating higher levels of new business , but just like a bag of sand with a hole at the bottom , the loss of sand gradually becomes greater than the level of sand being topped up.

    i foresee an interesting six months to the end of 2019.

    Leave a comment:


  • boletus
    replied
    Originally posted by loanarranger View Post
    one must assume that this move coupled with the increase in calls to its appointed brokers suggests that there is a significant push to increase their respective share of new / Remortgage business is available.
    Can't you just ask them rather than assuming? Their annual reports will show it anyway so its hardly confidential information.
    My assumption would be they are simply fighting to maintain the existing business levels they have.

    Leave a comment:


  • loanarranger
    replied
    Over the past month lenders have gone against the trend in market rates by reducing Fixed Rates on Buy to Let including niche lending sectors like HMO’s and Limited Companies, one must assume that this move coupled with the increase in calls to its appointed brokers suggests that there is a significant push to increase their respective share of new / Remortgage business is available. If anyone is contemplating making a purchase or seeking refinance then I would strongly suggest you speak with your mortgage advisor.

    Leave a comment:


  • loanarranger
    replied
    An interesting article appeared in the Trade Press using data from Property Solvers , for those Forum readers with property in London & South East this confirms what we have experienced on mortgage valuations irrespective of whether it is a Home Owner or Buy to Let application.

    South East houses largest disparity between asking and selling price

    The South of East of England is where the biggest discrepancies between asking and selling prices lie, according to data collected by Property Solvers.

    Within the region, South West London has the largest difference, at £85,142. This is followed by North West London at £80,299, and West London at £59,192.

    Property Solvers points out that the only area in the top 20 of this list is Inverness, in Scotland, which has an average gap of £18,860.

    Scotland is where the three narrowest disparities are: Perth, at £1,930, then Kilmarnock at £2,256, followed by Motherwell at £2,653.

    The data was collected from 89,582 property transactions between June 2018 and June 2019.

    Property Solvers co-founder Ruban Selvanayagam says: “Whilst it is logical to expect a bit of wiggle room, it is increasingly evident that something is amiss in the marketplace and properties are getting overpriced at the marketing stage.

    “It is common knowledge in the industry that estate agents frequently provide prospective home sellers with an over-hyped valuation to win instructions.

    “In many cases, this leads to homes lingering on the market for much longer than they should.”

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  • loanarranger
    replied
    Lenders are adjusting rates in an attempt to stimulate increased volumes

    I have noticed that in the last 7 days a number of main stream lenders announcing cuts to BtL mortgage rates and some instances the amount of fees being levied, this supports my understanding that the volumes of new BtL applications have continued to fall and those affected are seeking to gain advantages to stimulate new business . Nat West, Paragon, TMW are amongst the leaders making such announcements.

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  • Gordon999
    replied
    Also after the banking crisis in 2008 , some property home owners could not find buyers and to avoid selling at a loss, became BTL owners.

    Since property prices have now recovered during past 10 years under low interest rates , most of those BTL owners are now able to exit with a profit.

    Since loan interest is no longer allowable as an expense against rental income for owners on higher tax rates , some owners will decide to quit the rental business.

    Leave a comment:


  • loanarranger
    replied
    An article which has appeared in Mortgage Strategy

    Buy-to-let purchases drop 8% as tax changes bite: UK Finance


    The number of buy-to-let mortgages used for purchasing new properties fell by nearly 8 per cent in February compared to the same month last year, according to the latest UK Finance figures.

    The trade body says that only 4,800 BTL purchase loans completed, compared to 5,200 in February 2018.

    The value of these mortgages for landlords was £600m, down slightly from £700m a year earlier.

    UK Finance says that “while BTL house purchases continue to contract due to tax and regulatory changes, BTL remortgaging has increased as borrowers move from fixed rate mortgages and lock into new attractive rates”.

    Its figures show that 14,400 BTL remortgages completed in February, up 2 per cent from 14,100 in the same month last year.

    The value of BTL remortgages was £2.3bn, up from £2.2bn a year earlier.

    The number of mortgages for first-time buyers rose by 4 per cent year on year to 24,880 while the value of these loans rose by 6 per cent to £4bn.

    There were 18,200 new remortgages with additional borrowing in February 2019, 10 per cent more than in the same month in 2018.

    For these remortgages, the average amount taken out in February was £52,000.

    There were 18,360 remortgages for borrowers who did not want to increase their loan size, a rise of nearly 8 per cent on the same month last year.

    Leave a comment:


  • loanarranger
    replied
    AirbnB
    An excellent communication has been sent to intermediaries by Paragon Bank in respect of Air Bn B and clarifies some of the possible misconceptions over their funding.

    "Hosts have been welcoming guests into their homes via Airbnb since 2008 and the impact on the UK economy is growing. Last year, for example, Airbnb listings reached 168,000 in the UK and generated an estimated £3.46 billion boost to the economy from a combination of extra income for host households and increased visitor spending in local communities.1

    While Airbnb has the potential to take a landlord’s rental business in a new and exciting direction, there’s often initial confusion amongst would-be hosts about whether their existing mortgage covers this type of short term letting.

    Here, we answer some of the most frequently asked questions on Airbnb mortgages to help landlords get to grips with the facts. Can landlords use a standard buy-to-let mortgage to finance an Airbnb property?

    Landlords should always check with their lender before becoming an Airbnb host to make sure this is allowed under their mortgage conditions. Each lender offers a range of different mortgage products and not all products will allow customers to rent out their property on Airbnb.

    At Paragon, landlords who want to let out a property on Airbnb will need to apply for a holiday let mortgage.

    Paragon introduced holiday let mortgages into the product range in November 2018.

    Importantly, when a landlord applies for a holiday let mortgage with Paragon, they don’t specifically have to say that they are intending to use Airbnb but they should have checked first that Airbnb hosting is allowed by their local authority and, if relevant, their freehold agreement.

    If a landlord has a buy-to-let mortgage or a residential mortgage with another provider, they should also check their mortgage conditions to see if Airbnb letting is allowed. If they’re in any doubt, give the lender a call and ask them to clarify the situation. Likewise, if they’re searching for a new mortgage product, they should confirm their intentions for the property and clarify whether Airbnb lets are accepted. What type of information will mortgage lenders want to know?

    Again, this will depend on the lender.

    At Paragon, for example, we’ll want to check the proposed property is a single, self-contained unit and that it will be let under an approved holiday occupancy agreement for a maximum period of one month at a time.

    We’ll also want to consider mortgage affordability. One way that landlords can demonstrate affordability is through holiday rental income. However, at Paragon, we’ll also want to know that the mortgage would be affordable if the tenancy was let on a standard Assured Shorthold Tenancy (AST). If Airbnb doesn’t work out, can landlords convert their mortgage back to a standard buy-to-let property?

    Airbnb won’t work out in every case. Higher cleaning and support costs or more frequent voids may mean the economics are not attractive in practice. If this happens, some lenders, including Paragon, allow landlords to revert to letting on a more standard AST.

    As Paragon mortgages are only available via Intermediaries I would suggest you make contact with your advisor for more information on their Holiday Buy to Let loans and other offerings within the market.

    Leave a comment:


  • loanarranger
    replied
    An article appeared in a Trade publication highlighting the increase in First time Homebuyers whilst Buy to Let loans decline

    The number of loans given to borrowers taking their first step on the ladder increased 5.8 per cent year on year, making up £6bn of new lending – a 9.1 per cent increase.

    At the same time, new buy-to-let mortgages dropped nine per cent year on year to 6,100.

    The deals were worth £0.8bn of lending, down 9.1 per cent.

    However, there were 15,000 buy-to-let remortgages – an increase of 9.5 per cent year on year – and worth £2.4bn, an increase of 9.1 per cent.

    There were 36,200 homemover mortgages in the month, an increase of 1.1 per cent from a year earlier.

    The group accounted for £7.8bn of new lending, up four per cent year on year.

    The number of remortgages in November increased by 1.3 per cent from 2017, but the £6.8bn of lending was flat.

    Meanwhile, homeowner remortgaging activity has steadied, after reaching its highest level in a decade the previous month as a large number of fixed-rate deals came to an end.

    “In the buy-to-let market new home purchases remain subdued, while remortgaging continues to grow as landlords lock into attractive rates.”

    Leave a comment:


  • loanarranger
    replied
    BM Solutions have announced their intention to increase the minimum property value from £40000 to £50000. Not a big deal but worth considering for those properties located in areas where such properties can be purchased at such low prices.

    Leave a comment:


  • loanarranger
    replied
    TMW are gearing up for 2019 by making adjustments to the Stress Calculations, this comes on the back of adverse comments made by mortgage brokers where the lenders stress Calculations were perceived as stymying the introduction of businesss.

    New 10-year fixed products
    • available up to 65% LTV, with reduced stress rate (4% or payrate + 0.75% whichever is higher)
    • There is the option of either 5 or 10 year ERCs, available at 3.24% and 2.74% respectively.
    • Each product includes a £1,995 fee, free standard valuation and £250 cashback
    5 year fixed products
    • We’ve reduced our stress rate from 4.99% to 4.50% for all applications up to 75% LTV.
    Like-for-like remortgage
    • We’ve reduced our stress rate from 5.50% to 4.99% for like-for-like remortgage applications between 65% and 75% LTV.
    Please see our product guide for full rate details- https://www.themortgageworks.co.uk/i...9-06-12-18.pdf

    Interest Cover Ratio
    125% ICR
    • All Ltd Co applications (excluding HMO)
    • Landlords must be lower rate tax payers (gross income of £46,350 or less in England/Wales or £43,430 or less in Scotland) upon completion of the mortgage.
    • Landlords must have no more than 3 rental properties (with or without a mortgage), including any TMW applications in progress.
    • For purchase and Let to Buy applications, 75% of the proposed gross rental income will be added to current gross income to account for the increase in taxable income. For joint applications, half of the 75% proposed gross rental income will be added to the current gross income for each applicant.
    • Proof of income will be required in the form of a SA302 or tax calculation see table below
    145% ICR
    • Applies to landlords who don't meet the criteria above
    170% ICR
    • Applies to HMO applications, regardless of tax status

    Leave a comment:


  • loanarranger
    replied
    It has been revealed today that Nat West is giving serious consideration to changing its policy towards allowing Landlords to accommodate Housing Benefit Claimants on AST’s; todate this has been strictly forbidden.

    Leave a comment:


  • loanarranger
    replied
    TMW Stress Test
    I understand that TMW are giving serious consideration to making adjustments to the stress Calculations covering Portfolio Investors & Further Advances. Although the lender has achieved the required level of lending in 2018 for BtL they have noticed that the level of new applications has fallen in recent months and the negative feedback received from brokers with particular focus on applications for property in southern England.
    Lenders do not move quickly but I would expect any adjustments to be announced in early January in order that they can rebuild their mortgage pipeline for 2019.

    Leave a comment:


  • loanarranger
    replied
    Correct, I spoke with Paragon this morning and indeed they are using Sonia as the basis of rate setting rather than 3 Month Libor but this only applies to loans which were indeed linked to Libor but any mortgage offers being made now quote a reversionary rate which is between 4.85% and 5.60 depending on which incentive product is used.
    I have clients with reversionary rates of 1.5% above 3 month Libor for the remaining period of the mortgage and would naturally be concerned if the mechanism changed to the present norm.

    Leave a comment:


  • boletus
    replied
    Phew! You had me worried there.
    It is not a SVR set by the lender, it is a replacement index independent of their control;

    https://www.mortgagefinancegazette.c...or-04-09-2018/

    LIBOR is to be replaced, for GBP Sterling, with an updated version of the Sterling Overnight Index Average (SONIA). SONIA, which is based on actual transactions (as opposed to the estimations on which LIBOR is based), is less likely to be open to manipulation.

    Leave a comment:

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