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    In my honest opinion the following is the best news to come out for several months and as a Broker I am delighted to hear the news.

    Capital Home Loans (CHL) who closed for accepting new business following the problems associated with the Credit Crunch of 2007 will be announcing their return to main stream lending within the Buy to Let sector within the next two/three months. Initially they will operate a limited distribution channel for accepting new applications but once established into the processes then the availability will rolled out through the brokerage market at large.

    For anyone who has never come across CHL , all I will say is that until 2007 they were regarded as one of the leading lenders who fully understood all facets of lending to both Novice Landlord's, Established Portfolio borrowers and of greater importance the acceptance of Limited Company lending. My mole has told me that their lending proposition is designed to give greater competition within this niche sector and with the addition of further Institutional funding further into 2021 this can only be good news for everyone involved in this niche but main stream element of mortgage lending.


      A Word for the Wise

      Please note that if you are acquiring a property and undertaking a refurbishment project which will enhance its market value and subsequently seeking to raise monies Paragon Mortgages are very cautious in their approach.

      Until a property in its modernised form has been owned and let for a minimum of 12 months , the Maximum Loan to Value will be restricted to 70% and this LtV is conditional upon a full schedule of works and their respective costs being provided to the valuer.

      I raise this point as the details are contained in the General Criteria which needs careful reading to understand. Once the 12 month period has elapsed then normal LtV's apply.

      ​​​​​​​Still an excellent lender particularly for Portfolio Landlords but this is a slight negative when it comes to releasing equity from recently refurbished property and a need to maximise .


        From notifications received and conversations directly with lenders , we might see some lenders deciding to reduce their rates and/ or fees in an attempt to stimulate higher levels of business, this however seems strange coming on the back of some reporting delays in their respective processing of applications from initial assessment to the actual offer of loan.
        The latest lender to announce changes to its rates is the State Bank of India , so I await to read their announcement early tomorrow morning. If there is anything significant I will update the forum.


          Here is an interesting article which has been published in a leading Mortgage Intermediary publication today .

          New lender EPC requirements could create 'new cohort of mortgage prisoners', IMLA warns

          "It makes no sense to create artificial competition between lenders which could result in their avoiding lending on properties that are less energy-efficient and therefore less desirable."

          A new government consultation has proposed that lenders should annually disclose the average EPC rating of all properties they lend against.

          The consultation from the Department for Business, Energy and Industrial Strategy (BEIS) proposed that lenders should annually disclose portfolio-wide EPC data, as well as the gross value of lending for energy improvement works. The Government hopes that the measures could allow comparisons to be made between lenders and provide a picture of how energy performance could influence lending decisions.

          However the Intermediary Mortgage Lenders Association (IMLA) has warned that if enacted, the proposals would have "significant implications for both bank and non-bank lenders and could even fail to effectively help address the UK’s energy inefficient housing".

          IMLA says the proposals risk creating a "time-wasting paperchase" which will not achieve the desired results and could create a new cohort of mortgage prisoners trapped in less efficient homes. In its response to BEIS, IMLA said it was concerned that the compilation of an energy efficiency “league table” could cause lenders to base their lending decisions on a property’s energy efficiency, rather than on a borrower’s needs.

          IMLA rejects the implication in the consultation that lenders, rather than property owners, are responsible for the energy efficiency of the properties mortgaged to them. It instead argues for a thorough review of Energy Performance Certificates, to ensure that they are accurate and fit for purpose. It then suggests that property owners should be required to obtain an EPC and that all inspections should be carried out by appropriately qualified assessors, with the results held on a central, easily-accessible database.

          IMLA also notes that it was unclear from the consultation whether the mortgage market’s regulatory bodies, the FCA and PRA, had been fully consulted about the proposals and has pointed towards work already conducted as part of the regulators’ Climate Risk Financial Forum.

          Kate Davies, executive director at IMLA, said: “Lenders are taking the challenges posed by climate change very seriously, which is why many have already made significant moves to understand and prepare for the most immediate risks posed by our changing climate. They also recognise the important role the mortgage market has to play, with a growing number now offering ‘green mortgages’ to incentivise consumers to improve their property’s energy efficiency.

          “However, these latest proposals from BEIS are highly unlikely to bring about real change. Rather, they would oblige lenders to devote way too much time compiling and disclosing data in an exercise which - at the end of the day – won’t change a single low-energy lightbulb. It makes more sense to ensure that property owners have really accurate information about the energy efficiency of their property – and the best place to start is by ensuring that EPCs are really fit for purpose. If a property’s energy efficiency is reflected in its value, homeowners will be incentivised to make improvements – which can be financed by a combination of loans, for those who can afford them, and Government grants to help those who cannot. It makes no sense to create artificial competition between lenders which could result in their avoiding lending on properties that are less energy-efficient and therefore less desirable. In the worst case this could lead to some borrowers being unable to re-mortgage or sell. It is critical that this is avoided.

          “Tackling the detail behind Britain’s response to achieving net-zero carbon emissions by 2050 is a huge challenge. But rather than creating a distracting paperchase for lenders or imposing penalties if they fail to meet arbitrary targets, reducing our carbon emissions will require rather more fundamental cross-departmental thinking on where responsibility lies and how real change can be incentivised and encouraged. It will also need major investment to drive energy efficiency in the UK’s existing housing stock. These latest proposals from BEIS fall far short of the ambition needed."



            Kensington offering 85% LTV BTL.


              Hi Boletus Yes but at rates of between 5.35% & 5.54 with a 1.5% completion fee and higher rates with fixed fees are really hard to justify in a market which might experience a correct. There would have to be a compelling reason to access this LtV and get accepted by the Compliance Guru’s even though the loan is classed as Non Regulated.


                Originally posted by loanarranger View Post
                Hi Boletus Yes but at rates of between 5.35% & 5.54 with a 1.5% completion fee and higher rates with fixed fees are really hard to justify in a market which might experience a correct.
                The market 'might' always experience a correction, nothing new there. We had the four horsemen of the apocalypse last year and it never happened, despite all the expert predictions. And comparatively, this year looks a lot more positive.

                I remember having an 85% LTV BTL in 2004 at 6.45% and a 90% LTV BTL in 2007 at 5.99% both with mainstream lenders (B&W and Abbey National).

                I'd not take on such a high LTV nowadays but knowing I could, shows a solid return in confidence in the market from lenders.


                  I accept your comments, indeed I well remember whilst working for Paragon from 1997 ( the birth of BTL) until just before 2007 when I retired before the credit crunch when many lenders offered 85% loans at rates of at least 1.5% above 3 month Libor; the market is now much more mature but whilst having the availability of obtaining such a high LtV seems a positive move, I know my clients have developed a risk aversion in taking high loan to value facilities: No doubt there will be a take up but it will be hard justifying such facilities when the FCA expect a broker to justify why it is more beneficial taking a loan of at least 5.34% when at 75% & 80% offer lower rates.


                    Dear loanarranger, as someone with their 'finger on the pulse' of BTL mortgages, may I ask you a question ?

                    I recently had a re-mortgage offer lapse due in part to the Covid situation. The subsequent re-application incurred an extra £1000 in arrangement fees, which was justified by the mortgage company as due to ' increased demand' relating to the stamp duty holiday.

                    Now that the rush is subsiding, do you think the rates/ fees will come down again in the next few months (if not already) ?



                      Hi greenhaggis
                      At a time when there are delays in lenders processing applications and solicitors under pressure to complete transactions before the original deadline it is unfortunate that you have experienced such a negative response for reasons outside of your control. Were you dealing direct with the lender or via a broker?, if the latter he should have made strong representations to secure an extension of at least four weeks before charging a premium .
                      Lenders are presently tinkering with rates / associated fees but there is a funding floor below which they cannot go and indeed some lenders have inserted a clause which clearly indicates that if rates were to fall then these would not be allowed to go below 3%.
                      If you would like to detail either on the Open Forum or by Private Message what size loan is being sought , type of property and rental and without any commitment on your part I will research and provide details of the rates presently in place, sometimes the lowest rate is not always the cheapest over say 5 years when all the fees are taken into account.
                      I hope this helps.


                        95% Mortgage Availability from Skipton

                        Skipton for Intermediaries has joined Accord and Bank of Ireland in launching its version of a 95% mortgage BUT in common with the others it is restricted to 1st Time Buyers.

                        ”Skipton Building Society for Intermediaries has announced the launch of a new 95 per cent LTV mortgage range for first-time buyers only.

                        In the lender’s standard residential range, the high-LTV mortgage is available on a five-year fix at 4.17 per cent. It charges zero fee.

                        For first-time buyers looking for a property under the shared ownership scheme, the five-year fix is available at 4.52 per cent. This also charges no fee.

                        Both of the above have a maximum loan amount of £450,000.

                        I was made aware that Nationwide has decided to sit on the sidelines forthepresent and see which of its main competitors launch their own schemes and on what terms.

                        Watch this space for updates.


                          Paragon Increase the maximum Loan to Value

                          Paragon has today announced the introduction of two products for Single Units and HMO's with borrowing up to 80% , rates in comparison to vanilla products are a little chunky but demonstrates a increased level of comfort regarding the stability of the property market going forward given that they are traditionally a conservative lender with a propensity for very low risk applications.


                            Coventry for Intermediaries Introduce 95% Mortgages for 1st Time Buyers

                            The above have announced two products for 1st Time Buyers with rates starting at 3.89% with a Completion Fee of £999 and £4.09% with zero Mortgage Completion Fee. In common with those who have announced their involvement the rates are higher than those for lower Loan to Value properties but for those struggling to find the additional deposit in addition to everything else the facilities to enable access to becoming a 1st Time Borrower.


                              Skipton breaks the mould

                              I am pleased to advise that Skipton have launched a 95% residential mortgage facility for both First Time Buyers as well as movers and Shared ownership.
                              There are two fixed rate facilities , a 2 yr Fix at 3.95% and a 5 Yr Fix at 4.09%: again in line with other lenders their rates are higher than the norm but for those seeking the max LtV this is a welcome change particularly for Home Movers.
                              It only needs a few of the larger lenders to extend to the Home Mover element and others like the Nationwide will come into the fray in the meantime they are staying on the sidelines just waiting !!


                                Halifax improves the transparency for Non UK Nationals
                                Halifax overhauls mortgage criteria for all non-UK national applicants

                                by: Owain Thomas

                                Halifax is overhauling its mortgage application criteria for all non-UK nationals following Brexit.

                                Many lenders have been making changes to rules for European Economic Area (EEA) nationals but Halifax is applying these to non-European citizens as well, meaning all international applicants will have to meet the same criteria.

                                Where all applicants have lived in the UK for more than five years, or the loan to value (LTV) is less than or equal to 75 per cent, or where the applicants’ income is at least £100,000, no permanent right to reside will be required.

                                When proof of permanent right to reside is required for any applicant, advisers must provide it for all customers on the application.

                                To determine if a customer has lived in the UK for more than five years Halifax will use credit reference agency data but may still require proof of residence for more than five years.

                                Application income will include both incomes on a joint application and is the total of basic, overtime, bonus and commission for employed applicants or the latest year’s income for self-employed customers, plus pension income.

                                “This new simplified criteria applies a consistent approach for both EEA and non-EEA customers and will make it easier for you to know in advance if an application will be accepted,” the lender said in a message to brokers.

                                The new criteria applies to all full applications submitted from 8 April 2021 and new further advance applications.

                                Any decision in principle (DIP) keyed before this date but then submitted as a full application from 8 April will also be subject to the new criteria.

                                Permanent right to reside can include:
                                • As part of the EU Settlement Scheme EEA, EU and Swiss citizens, living in the UK by 31 December 2020 can apply to continue to live in the UK after 30 June 2021 and will receive one of two statuses which are both acceptable:
                                  • Settled status (awarded where they have lived in UK for at least five years and also known as ‘indefinite leave to remain under the EU Settlement Scheme’).
                                  • Pre-settled status (awarded where lived in the UK for less than five years and they can re apply for settled status after five years continuous residence in UK has been reached).
                                • Indefinite leave to enter or remain.
                                • Republic of Ireland citizens do not need to apply under the EU Settlement Scheme and have automatic permanent right to reside in the UK.


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