We are probably looking at a tough few months ahead, across all markets and sectors.

Despite Sainsburys Bank, Bluestone, Hinckley and Rugby Building Society, Kensington Mortgages and Secure Trust Bank all reducing rates on their mortgage products last week, things are still ‘interesting’ out there.

We have seen numerous retail outlets and banks recently confirm they will reduce their store or branch numbers as the ‘online v shop front’ takes another hit.   Wonga collapsed, and we’ve seen Countrywide, the UKs biggest estate agent, raising £140m in emergency cash.

As we move in to the final third of the year, I’d say we are probably looking at a tough few months ahead, across all markets and sectors. 

On the plus side, it is encouraging lenders to become more innovative and think about more innovative ways to attract new business. 

Magellan Homeloans has entered the Buy to Let sector with offerings for portfolio landlords, as well as limited company and refurbishment options.  However, the really interesting piece is that they will allow first time landlords to purchase a buy to let, with a professional landlord acting as a guarantor.  This includes Houses of Multiple Occupations and Multi-Units.  We all need advice when it comes to property, so this is a positive move.

Kensington have also launched a 5% deposit product that caters for individuals who may have had a credit blip in the past.  Their rates start from 4.64% for a two year deal and allows defaults over 36 months old and two missed payments to unsecured credit in the last 12 months.  Terms and conditions obviously apply, so seek advice!

With rates so low we have also seen a vast increase in customers looking to consolidate debt and add these to their current mortgage. This can sometimes cause issues. If you consolidate unsecured finance in to your mortgage, whilst your monthly payments may be lower, you may be paying more for your debt over a longer term. 

At AToM, we are independent, and we will happily go through the pros and cons of changing any of your financial details before proceeding to conduct any credit searches or decision in principles. You need to be clear that it’s the right deal for you. If your current deal is still the best option for you, we will suggest you stay where you are.

AToM Chairman awarded 'Outstanding Contribution' at Specialist Lending Awards 2018

I start this week with some fantastic news!  AToM’s Chairman and Founder (and my father!) Victor Jannels, received an award for his ‘Outstanding Contribution’ to the mortgage industry last week. The British Specialist Lending Awards ceremony was held at the spectacular London Waldorf Hotel and Vic was truly surprised and delighted, thanking everyone for their kind support and nominations.  Well done VJ!

In other news, the market is reported to be pretty flat currently, some estimating the impact on April was as much as 25% lower in property transactions than during March 2018.  

With this in mind, it’s good to see a number of lenders making changes to criteria or launching new products to try and offset the downturn.

One such lender, Kensington Mortgages has increased its loan to value (LTV) to 90% of the property value up to £1m loans, including options for those who might have had a credit blip previously.  This also includes new build flats and right to buy flats.  For those with a 20% deposit, the loan can go as high as £2m.

Staying with Kensington Mortgages, they’ve also added Limited Company mortgages to their Buy to Let options, up to 80% LTV, and offer a simpler process with limited company investors only being assessed on the property portfolio of the company.  Terms and conditions apply!

Rates have increased slightly though with Moneyfacts, the data provider, suggesting that the average cost of a two year fixed rate has risen to a twelve month high of 2.52%.  Whilst five year fixes remain the most popular in recent months, demand for shorter deals has been rising.  Changing SWAP rates (the mechanism through which lenders can acquire a fixed price for funding over a specific period of time) has seen a number of lenders reprice upwards over the last week or so, and although not directly linked, this is despite the Bank of England base rate remaining at 0.5%. 

This should encourage anyone considering reviewing their mortgage options in the not too distant future, to possibly consider it sooner as the ‘rate hike’ hints keep coming!  Always seek advice! 

Piazza Italia was superb! Lenders launch in to Near Prime for those with small deposits

This column is always a difficult one to write in the middle of the Easter holidays and whilst a lot of people are away, including myself!  So, whilst writing this from our ski chalet, I do look around the surroundings and weigh up the local house prices and compare to those back home.  We are most definitely an expensive comparison.  With this in mind, I wonder how first time buyers manage to save alone, without the help from the bank of mum and dad or grandparents, in the current climates, most probably still whilst paying to rent a property?  Which incidentally, will be a significant amount more expensive on the monthly payments than a mortgage probably would be!  This is of course on the basis that the clients have no issues, which, as more and more people apply for a mortgage, more and more fall out of the ‘high street’ model.  Some give up, whilst others look for the alternative mediums out there, such as ‘whole of market’ mortgage brokers, who have access to lenders who want to help. 

Lenders recognise that they should be helping those who may have had a blip in the past.  Just last week, our good friends at Kent Reliance (part of the One Savings Bank group), launched a mortgage for those with a 10% deposit, that may have had a default or CCJ over two years ago, or a missed mortgage payment over one year ago, with rates starting from just 3.19%.   Terms and conditions obviously apply, and these deals are only available through a limited few. 

They join another lender, Kensington Mortgages, who also offer a similar offering for those with just a 10% deposit.   However, that means that only two lenders in the whole market will consider someone with a historic blip and just a 10% deposit.   These two lenders must be applauded for leading the way.  But overall, this needs to change and more lenders need to follow suit and offer assistance. 

Finally, hats off to the organisers of the Easter weekends Piazza Italia.  Despite the weather, the crowd turnout was fantastic, as was the entertainment, and it looked like everyone enjoyed themselves.  AToM was delighted to be a sponsor and well done to all involved.

New products and new lender - Vida Homeloans

I start with Kensington Mortgages this week.  The lender has launched a number of new products including options to cater for those looking at investing in Houses of Multiple Occupation (HMOs).  Similar to a normal Buy to Let, bought for investment, capital growth and income potential, yet these products allow for more than one family occupation and each on a separate assured short-hold tenancy agreement (AST).  This can increase the rental yield return achievable for the owner and these products allow for properties with up to six bedrooms.  HMO's normally require a licence from the council and investment will be area specific.  Good for near colleges, universities, commuter facilities etc.  This is an increasing market as more and more people rent a room, over renting a whole house.  Demand for specialist products which require a more individual approach will grow as investors look for ways to derive greater value from their investment.

Kensington have also launched products which allow for property conversions in to multi units, that still remain on one title.  For example, where a house has been converted in to three self contained flats.  Or where a property has a separate annexe etc.

New Lender Vida Homeloans has also expanded their distribution this week to include AToM.  Their products include HMOs, Buy to Let lending in a Limited Company name, Portfolio landlords, ExPats, and Buy to Lets for those with impaired credit, so County Court Judgements, Missed payments, etc.  

The Buy to Let sector generally is becoming very competitive and despite an increasing number of options and new lenders launching in 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.  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.