New Buy to Let with just 15% deposit requirement is launched!

A second Buy to Let with only a 15% deposit requirement has been launched into the Market.  Exclusively through just three distributors in the UK (inc AToM!), BlueZest is a new lender to market and has some superb products. These products are part of a broader range that allow landlords and developers to do refurbishments, conversions and new builds with funds advanced upfront, secured on non-development property that they already own. These mortgage products are available for periods up to 18 months with competitive rates, without the need for bridging finance.  This is a fantastic offering and we look forward to working with them.

Despite the continued talk of rates rising, there is a lot of activity in the market place and some rates have even decreased (Nationwide with some residential rates by up to 0.5%).  Foundation Home Loans has launched a new Buy to Let range with just a fixed fee of £1,999 (most lenders charge up to 2% of the loan amount), for loans up to £1m.  And Accord Mortgages has added a £500 cashback to all of their Buy to Let fixed rate house purchase products.  Obviously, terms and conditions apply.

The Buy to Let sector generally is becoming very competitive and despite an increasing number of options and recent regulation changes to the market, demand is still increasing.   Whilst first time buyers struggle to get on the property ladder and savings interest rates remain low, many continue to invest long term in to property and there's no immediate reason why this should change. 

The really positive news is the number of new lenders who have launched this year.  A sign of the times and that funding is a lot easier to achieve compared to recent years.  This has also bought in rate price wars and this can only be a good thing for the end consumer and keeps competition rife.

However, with all of the recent tax changes on Buy to Lets, you should not only seek professional mortgage advice, but tax advice from an accountant who understands property and all the new rules surrounding landlords and, where applicable, portfolio landlords.

Stick with your current lender?

So, your mortgage product is coming to the end of it's term.  You may have fixed for an amount of time, maybe two, three or five years.  And now your rate is due to change to the lenders variable rate, which in the main, is higher than the rate you are currently on, and your monthly payments are about to increase.  But hold on, your current lender has seen the light and decided to offer you some 'fantastic' products to keep you.  Even though you are four months out of your product change, they've given you just fourteen days to decide whether to choose a new product to stay with them.  What do you do?

One recent example a customer showed us, had some very attractive rates.  However, when we looked, the same lender was offering better rates through the intermediary sector, with the same fees, etc.  I always say do your homework, and lucky this customer did as it saved them 0.1% on the rate over a three year period.

Even though some lenders put a deadline on any new offerings, remember most are contacting you three or four months before your product changes, so there is plenty of time to review your options and choose the best one for you. 

This is the biggest debt you will ever take on, take your time and ensure you will not regret it further down the line.  Always seek advice! 

With this in mind, we've seen a lot of rate changes and reductions over the last few days.  TSB, Santander, Halifax, Harpenden Building Society, Accord, Platform, Saffron, Kensington, Virgin Money and Precise Mortgages have all made changes, to name but a few.  Key highlights include 5 year fixed rates from 1.75% up to 65% LTV, Buy to Let fixed rates from 2.99%, ExPats in Australia can now be First Time Buyers in the UK, more options for lending in to retirement and many many more positive enhancements.    Lenders want to lend!

Even the pundits say to 'act fast' to secure a good rate!

There seems to be a lot of talk from various industry pundits regarding the end of the 'good rates' in the mortgage market.  Even Martin Lewis' money saving programme this week suggested that consumers should be quick and secure a competitive rate.

Remember, that fixed rate monies are derived by the money markets, whereas tracker rates follow the Bank of England base rate and lenders decide on their own standard variable rates.

With this in mind, personally, I can't see rates having a significant increase for some time yet.  You might see the odd shift here and there, but with over 11,000 mortgage products now in the market place, this is expected.  To back this up, many lenders fell short of targets last year and with a market that is expected to be similar in overall volume in 2017, compared to 2016,  I can only see competition becoming stronger to fight for the business.

Just in the last few days, we've seen Buckinghamshire Building Society launch a first time buyer mortgage at 95% loan to value (LTV), so just a 5% deposit required.  In addition, the rate is an attractive 3.24% and the product has no product fee and £250 cash back.  This lender also reviews cases manually, rather than a credit score.

Accord Mortgages is giving offset mortgage customers £1,000 when their home loan completes, for a limited time.

Virgin Money has launched new residential and buy-to-let fixed rate loans. The range includes a two year residential fixed rate up to 90% LTV at 2.84% for first time buyers. The loan has no product fee and £1,000 cash back.  Virgin has also introduced a five-year residential fixed rate up to 65% LTV now at 1.89%.  The loan has a £995 fee, £300 cash back for purchases, a free valuation and legal fees for remortgages.

And finally, Bank of Ireland for Intermediaries has increased its maximum loan size to £1.5m for Buy to Lets and increased its upper age limit for Residential customers to 75.

So in short, despite the negative press, no one knows what's going to happen this year and with economists pulling their hair out, you just have to think of number one.  You have no loyalty to stay with your current lender when others will offer better rates.  And only you can decide if you want the certainty of a long term fixed rate, or if you are happy to see what happens with a shorter term tracker rate.  As always, terms and conditions apply and, as Martin Lewis said, speak to a whole of market mortgage broker!

Positive news for the Self Employed and also Ex-Pats!

The self employed have had a good week on the mortgage side.  Specialist lender, Precise Mortgages has changed criteria and will now allow customers to use just last years accounting figures as income for a mortgage.  Previously the lender, and most lenders, would look at two or three years figures and average over the period.  However, whether the customer has been trading one year, or twenty, the lender will now work on just the last years figures.  This is available right up to 85% of the property value and only via a small and select number of companies, including AToM. 

A number of lenders have joined the current price rate war over the last few days.   Metro Bank, Virgin Money and Leeds Building Society joined a number of other lenders who have cut rates substantially.  We even saw a six year fixed rate launched, under 3% interest rate, but sadly this was only available for three days before being withdrawn  - probably due to huge demand 

Others have also launched short term availability schemes. Accord Mortgages have launched a '10 day sale' on some of their products covering both their Residential and Buy to Let schemes.  These include lower lender fees, enhanced cash backs and low fixed rates options.  But be advised that these products will require your mortgage adviser to submit a full application before midnight on 1st October!  Terms and conditions apply, etc.

Finally, we are delighted to be one of only seven companies in the UK who can offer a new product range aimed at Ex-Patriots from Skipton International.  For UK Nationals  living abroad, looking to buy or remortgage an investment property in England and Wales, up to 75% of the property value, Skipton International will consider lending up to £1.5m with rates starting below 4% and no lender arrangement fee (for a limited time).  This really is a superb offering and if you know someone who may fit this criteria, please get them to contact us to find out more!         

Confused by the internet "information"? .....we can help!

Considering it was a ‘holiday month’ August was a flurry of activity and caught many of us out and this was a very pleasant and great surprise!  Of those approaching AToM, many were seeking straight forward simple human assistance having become confused by the huge amount of information currently available on the internet.  The majority were after the superb low rates currently available.  However, and with this in mind, we have seen a few fixed rates increase over the last week as some volatility returned to the financial markets (as I write Nationwide Building Society, Accord Mortgages and a couple of other specialist lenders have all raised medium to long term fixed rates, some by up to 0.4%).  As mentioned in previous columns, lenders are incurring huge delays with processing and underwriting and August’s great business volumes won’t have helped clear the back logs!

Second steppers are being given a helping hand.  Some lenders are offering loans of up to 95% of the property value to get people moving up the ladder and thus freeing up properties affordable to the first time buyer sector.   Lloyds TSB’s recent research also compliments this as they report that equity levels for home movers have helped people living in their first home jump up to the next level.  Improving house prices over the last twelve months have helped.  Despite a reported 2% decrease in homemover mortgages in the first half of 2013, the same time frame that saw a nineteen per cent increase in first time buyer approvals, the average equity share position of a home mover rose from one per cent in the second half of 2012 to thirteen per cent in June 2013!

Finally, due to the increase in business volumes, we’re looking for staff to join our expanding AToM team.  If you know someone in the mortgage sales sector, with the relevant qualifications (or studying towards them) and who likes to be kept very busy, then please ask them to get in touch! 

Right to Buy and Shared Ownership enquiries on the increase

Over the last few weeks, we’ve seen a marked increase in enquiries for both Right to Buy properties and those looking to purchase on a Shared Ownership basis.

Right to Buys are usually via the local council selling their properties to the existing tenant at a discounted price.  This discount can be up to £75k and tenants must have been with the council for five years or more.  Some lenders will allow borrowing of up to 100% and possibly slightly more if the extra funds are to be used purely for home improvements.  If you resell your home within five years you will usually have to repay some or all of the discount you received, however remortgaging is usually allowed in this time period.

Shared Ownership Schemes are provided through housing associations.  You buy a share of your home, between 25% and 75% of the property value, and pay rent on the remaining share to the housing association.  You usually have the opportunity to purchase a bigger share of the property later on (normally called ‘staircasing’).  Local housing associations must confirm your eligibility in order to join these types of schemes.

Both schemes are proving popular in the local area and a wide number of lenders are looking to lend in both scenarios and to a number of different customer types, so always seek advice.

Whilst mentioning advice, there are a lot of good rates in the market currently.  Some of these are only accessible through certain brokers.  Make sure you are speaking to someone who has access to the Whole of Market and access to these superb rates as they can be withdrawn with little or no notice.  With this in mind and as mentioned in a previous write up, some lenders will launch market leading products but only for a short period, in order to attract volume business.  The latest to do this is Accord mortgages (owned by Yorkshire Bank).  Sadly by the time this goes to print, this particular set of fantastic products will be gone as they were only available for 7 days, so I will not go in to detail, but they were good and there are likely to be more soon.  Remember, despite what some say, you do not have to take your mortgage with any one source even if they insist that is the deal.  Shop around and make sure you are getting the right deal for number one!

Lot's of activity in the mortgage market!

There is a lot happening in the mortgage market as we move into the last month of the year! Where have the last eleven months gone?

Good news in that lenders are looking to expand their distribution offerings to a wider market as both Kensington Mortgages and Saffron Building Society launch new products into the intermediary market. Both have various niches and are looking at a number of new products. Saffron, for example, have no redemption penalties on their products, so a customer can leave or overpay at will. These include Residential, Rent to Buy for First Time Buyers, Buy to Lets and Self Build Projects. Seek advice though!

On the other side, there was another nail in the coffin for Interest Only this week as both NatWest and Royal Bank of Scotland cease to offer new interest-only mortgages from Monday 3rd December. This does not affect existing customers or their Buy to Let mortgages.

Many lenders still offer Interest Only as an option, however we are slowly seeing it eradicated from the high street lenders. For the right situation and right scenario, Interest Only works, but it really does look like it is going to be an option only available through the smaller lenders and at a low loan to value soon.

The price war continues as we see lenders offering competitive rates, but this time on a ‘fire sale’ type basis. Santander issued some sub 2% fixed rates via brokers, for just 7 days! This has now been followed by Accord Mortgages who have launched some attractive options, but for a period of just 10 days. Do keep an eye on our shop front in the Carfax, if you are local, as we promote these opportunities in our window. If they are right for you, you will need to act fast as when they are gone, they are gone!

Finally, news just reaching me as I write this column is that the Bank of England has decided on Sir Mervyn Kings successor. Bank of Canada Governor Mark Carney will take over the post in June 2013. Personally I welcome someone external to take over the role as it does need a good shake up and a little modernisation!  However, there’s no denying that the job in hand is huge and the new Governor will need to settle in quickly to the tasks at hand, including financial stability, regulation and monetary policy.

Positive activity in the mortgage market

Only a few days into the final quarter of the year and we’re already seeing lenders lowing rates to attract new business.  Woolwich have cut some rates by up to 0.2% and Abbey for Intermediaries have reduced various fixed rates across the range, both following numerous lender changes last week.  Accord Mortgages have also launched eight products aimed at First Time Buyers with a 10% deposit.  Rates are reasonable and some offer free valuations and £250 cash back.  All in all, it seems there is an appetite to lend in the last quarter (to hit bonus targets?!) and this is great news for the end consumer.

Second charge lenders are also in the midst of a price war.  Many have reduced rates, one or two new lenders have entered the market and another has increased their maximum loan size up to £200,000.   Many customers are making use of a second charge, rather than a full remortgage, as their existing first charge mortgage is on a very good rate and it may not prove cost effective to remortgage the whole amount.  Make sure you review all options available to you.

House prices have fallen 0.4% in September, according to the Nationwide House Price index.  The average house price now stands at £164k.  Nationwide go on to suggest that overall house prices should remain “relatively flat” or decline only modestly over the next 12 months.

With a recent Panorama programme highlighting the use of Payday loans around the country, I need to reiterate that these are classed as an ‘adverse entity’ with most lenders (not that some would admit it!).   In short, these lenders will charge a premium interest rate for a mortgage, compared to a high street lender.   However, even these lenders (those who accept customers with historic CCJs, defaults, or missed mortgage payments registered against them) MAY NOT accept someone who has taken out a payday loan.   So, although these may be right for a customer in certain circumstances, they will most definitely limit the number of lenders available to you when you come to apply for or change mortgages.  Seek advice.

Act quickly - once they're gone, they're gone!

The summer is over, the kids are back to school and the post holiday credit card statements are on their way!   Ok, so a bit negative, but don’t panic when they arrive.  Debt Management Plans and Payday loans look like an attractive solution and they will be right for some people, however most mortgage lenders are not favourable to these arrangements.  If you are looking to change your mortgage, think twice before committing to such a plan.   Consolidating debts into one monthly payment via a secured loan or even a total remortgage may be a better option.  Obviously securing short term debt in to a longer term loan will inevitably increase the amount of interest paid and professional advice should be sought before going this route. 

Some lenders have been trying to boost mortgage volumes by launching products for a limited amount of time.  Accord Mortgages launched some superb products for a period of 10 days only.   These included cash back, free valuation, low arrangement fees and great rates.  A number of lenders took this approach around this time last year and maybe this is the start of things to come.  Watch this space and act quickly!  Once they’re gone, they’re gone.

Other lenders have made movements in the mortgage market over the last week or so, including rate reductions by Co-Op Bank, Tesco Bank, Santander, Coventry, Virgin Money and Skipton, to name but a few.  Lenders want your business, so make sure you shop around and do your homework.

August was a superb month for AToM.   Completion numbers, those taking out mortgage loans, were the best for nearly four years!  Thank you to all those who have been using AToM’s services, we really do appreciate it. 

Don't miss the rates, use a Broker

More mortgage product pulls this week resulting in rate increases. Both Nationwide and Accord withdrew products only giving one hours notice to book the funds. In short, this meant that we had an hour to upload a full application on to the lenders systems to book the rate and secure the funds. One minute over the deadline and the rates were lost. Add this to the recent shenanigans over booking funds with the Woolwich (limited funds released at 12am and gone by 12:01am!) and life as a mortgage broker has been far but dull of late, but incredibly long hours!

The Bank of England’s latest mortgage approval figures show mortgage lending fell by 12% in February. Loans secured on property fell from 108,767 in January worth £13.1bn to 95,976 in February worth 11.7bn. Within this figure loans for house purchase fell from 57,899 in January worth £8.7bn to 48,986 in February worth £7.1bn. I suspect March’s figures will return to an
increase as it was incredibly busy throughout the month!

In comparison, gross mortgage lending by building societies and other mutuals rose 28% year on year in February 2012, figures from the Building Societies Association data shows. New mortgage approvals were up 31% on February 2011 and with gross lending at £1.9bn. This sector of the market appears to have a huge appetite to lend and some great product innovation.

Interest only remains in the spotlight with suggestions from Unbiased.com that one in seven UK households are sitting on an interest-only mortgage with no repayment vehicle. The website suggests that 1.6m properties are simply paying off the interest each month and not repaying capital or saving anything towards paying off their mortgage debt in the future. This is a pretty scary and certainly something that requires a review and not left until ‘tomorrow’. Speak to a independer adviser and work out a repayment plan.

Finally, the Leeds Building Society are the latest to reduce interest only mortgages to 50% of the property value and the Co-Operative Bank have increased their Standard Variable Rate
(SVR) from 4.24% to 4.74%. I’m still unsure how this fits within our markets regulatory rules of ‘Treating Customers Fairly’…

Switch and Fix on Buy to Let!

More movement in the mortgage market this week as yet more lenders have decreased rates and a pricing war seems to be unfolding in the longer term fixed rate offerings. One lender, Accord Mortgages, have reduced their 5 year fixed rate to just 3.84%, available to 75% of the property value and with a lender fee of just £995. They have also reduced their 2 year fixed to 2.79%, also with a £995 fee.

Loans of 90% of the property value and over also seem to have been targeted this week as lenders seek to assist those with small deposits. The rates are reasonably priced, but as more and more lenders re-enter this arena, with sensible lending, the rates will decrease. One example is Kensington Mortgages, funded by Investec, who offer First Time Buyers a 2 year fixed rate at 5.99% with a £699 fee and a free valuation, with a 10% deposit required. For home movers, the rate is 5.79% with a £999 fee. The benefit with Kensington is they do not credit score, compared to many others. Certainly an area to keep an eye on over the coming weeks.

The Buy to Let (BTL) market has also seen huge changes as Natwest cut some rates by 1.4%, Mortgage Trust (part of Paragon group) launch 18 new BTL products, some starting from sub 4% and The Mortgage Works (part of Nationwide) launch a 2.99% tracker and allow ‘switch to fix’ on all of their Buy to Let trackers.

The Switch to Fix option is now available on both Residential and Buy to Let mortgages via certain providers. It is a great product offering allowing you to have the best of both worlds. Take a low base rate tracker and enjoy the Bank of England base rate whilst low, and when you feel you want to fix your monthly payments for a medium to longer term, transfer to a fixed rate with the same lender. Sounds great, but just beware that the lender may charge a product fee for the fixed rate and of course, you will only have access to those fixed rates available at the time of the switch. Terms and conditions apply!