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Residential property transactions jump 32% in June – HMRC

Residential property transactions in June increased 32% month-on-month to 63,250 transactions, HMRC figures show.

However, this is still far below the transaction levels seen in the same month last year. Year on year, transactions were 36% lower than June 2019.

Non-residential transactions rose 31% to 7,340 in June but annually, this was represented a 27% decline on the same month last year.

Market position to be seen in months

Andrew Southern, chairman of Southern Grove, said: “The annual decline isn’t particularly flattering but it’s the trajectory that’s most important. The next few months are going to make June look like an amuse-bouche rather than an entrée.

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“A healthy improvement in volumes month-on-month points to a large proportion of agreed sales that were knocked back, due to the pandemic, finally reaching completion.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “Whilst the transactions figures have not improved significantly since May, the nature of the property market means people have not had enough time to get through the moving process.

“It will take a bit longer for us to see how much new activity there has been in the market since it reopened in May.”

Stamp duty concerns

Mike Scott, chief property analyst at Yopa, said the recent stamp duty holiday in England and Northern Ireland, as well as similar initiatives in Scotland and Wales would help bring some transactions forward to this year but suggested this would not have a lasting impact.

“After a spike in the number of completions in March 2021 there will probably be another fall in the second quarter of next year as the normal rate of stamp duty is reimposed,” he said.

Tomer Aboody, director of MT Finance, also agreed the tax break had a positive effect on the market but said changes to capital gains tax could set that back.

Aboody said: “If the government increases capital gains tax on principal home sales, it will push us back again so any progress made by the stamp duty reduction will be swiftly lost.

“We need more stimulus via reduced stamp duty to the upper end of the market and hope for this in the Autumn Budget.”

Written by: Shekina Tuahene

Source: Your Money

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Lender raises £400m mortgage funding

Specialist lender Kensington Mortgages has raised £400m of funding through the wholesale financial markets.

The deal, which was announced to the market last week (June 17), was one of the first residential mortgage-backed securitisations (RMBS) to be sold to investors since the onset of the coronavirus crisis, according to the lender.

RMBS consist of bundles of mortgage loans, which are sold on as bonds to investors. The securities were purchased by global institutional investors.

Kensington said it will use the funds to support complex and underserved borrowers get on the property ladder.

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Alex Maddox, capital markets director at Kensington Mortgages, said: “The global financial markets are a hugely important source of funds for the UK housing market.

“While everyone assumes that the flow of money supporting British housing is all about the big banks, that’s not been true for many years.

“About 20 per cent of the cash underpinning UK house purchases is coming from pension funds and debt investors around the world.

“At the start of the Covid-19 pandemic, the Bank of England was quick to ensure that funding was made available to banks and building societies so they could keep lending – which was welcome. With wholesale markets reopening, non-bank lenders such as ourselves can play a more active role in the market again, and help more people towards a house purchase.”

Kensington Mortgages is a specialist lender that offers mortgages to those who find it difficult to borrow from high street lenders.

By Chloe Cheung

Source: FT Adviser

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Scottish Building Society scraps deposits for first-time buyers

Scottish Building Society are helping first-time buyers by scrapping deposits on new-build mortgages.

Under the Scottish government’s First Home Fund, prospective homeowners trying to get on the property ladder need to find a minimum of 5%.

However, the society has agreed to accept the 5% from house builders, removing the need for buyers to find the cash for a deposit.

Paul Denton, CEO at the Scottish Building Society, said: “As we seek to rebuild the economy post-COVID-19, it is important that as many people as possible have access to affordable housing.

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“We were proud to be one of the first lenders to take applications for the Scottish government’s First Home Fund. Getting a deposit together is the main barrier for customers trying to get on the property ladder; in some cases, one that has been exacerbated by the impact of lockdown on personal finances.

“Removing the requirement for buyers to find that 5% is good news for buyers and good news for a housing industry that is vital for Scotland’s future economic prosperity.

“This is a small but life-changing step and we would welcome further Government initiatives, such as a freeze in land tax, to accelerate the recovery.”

The First Home Fund was launched by First Minister Nicola Sturgeon to make the housing market fairer by providing a total of £150m until March 2021, helping at least 6,000 people buy their first home.

All first-time buyers in Scotland can apply for an interest-free loan of up to £25,000 towards the cost of a home, if at least 25% of the property cost is covered by a mortgage.

By Ryan Fowler

Source: Mortgage Introducer

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Skipton reintroduces 85% LTV products

The Skipton Building Society is reintroducing lending at 85% LTV for its standard residential, new build and shared ownership range and also reducing rates on a range of mortgage products.

A series of new products has been introduced to Skipton’s repriced mortgage range as it resumes lending standard residential lending at 80/85% LTV, with rate decreases across the HTB range, and has reduced rates on its interest-only product range; however, Skipton’s new residential range is not available on interest-only.

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Highlights of Skipton’s new mortgage range include:

  • For purchase and remortgage, 2-year fixes at 1.37% to 60% LTV (fee free) and 1.59% to 85% LTV (£995 fee); 5-year fixes at 1.35% to 60% LTV (£1,995 fee) and 1.76% to 75% LTV (fee free);
  • For Help to Buy, (purchase and remortgage) a fee free 2-year fix at 1.89% to 75% LTV;
  • 2-year fee free shared ownership fix at 2.69% to 85% LTV;
  • Buy-to-let (purchase and remortgage) fee free 2-year fixes at 1.99% to 60% LTV and 2.34% to 75% LTV, and 5-year fixes at 1.79% to 60% LTV (£1,995 fee) and 2.19% to 70% LTV (£995 fee).

Skipton recently announced that under a revised affordability approach, it will accept cases from applicants who have been furloughed. However, affordability will be assessed on the new, furloughed income, including any top up contributions made by the employer. The maximum LTV where any applicant is relying on furloughed income is 60%. Product transfers are excluded from these restrictions, unless the applicant is also seeking additional funds.

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Alex Beavis (pictured), Skipton’s head of mortgages, said: “We’re delighted to reintroduce lending at 85% loan to value and reduce rates on many products giving borrowers more choice and better value. As a mutual, we strive to help people buy their own homes and through this difficult time we have maintained high levels of service to ensure our customers get the best experience when buying or remortgaging.

“Our reintroduction of 85% LTV deals for new build, shared ownership and residential purchases and support for furloughed workers demonstrates this commitment.

“In order to help us continue to support our customers, I encourage anyone who needs to speak to us to make use of our online FAQ pages, webchat and email services in order to avoid longer telephone wait times in our contact centre.”

By Kevin Rose

Source: Best Advice

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Strong mortgage lending in first quarter of the year

The first three months of 2020 saw a rise in mortgage lending before the coronavirus lockdown took hold.

Gross mortgage advances in the first quarter of 2020 totalled £65.8 billion, 3.8% higher than in Q1 2019, the latest figures from the Bank of England show.

This takes the outstanding value of all residential mortgages loans to £1,509 billion at the end of March 2020, which is a rise of 3.9% from a year earlier

The value of new mortgage lending agreed to be advanced in the coming months was 6.1% higher than the previous year, at £67.6 billion.

Almost three quarters (73.2%) of the share of gross advances had interest rates of less than 2% above Bank Rate in Q1 2020. This is 10.2% lower than a year ago and was driven by the 65bp cut in Bank Rate in March rather than any significant change in mortgage interest rates.

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The share of mortgages advanced in Q1 2020 with loan-to-value ratios exceeding 90% was 5.2%,up by 0.7% from a year ago.

Buy-to-let lending, including house purchase, remortgage and further advance, represents a 14% share of gross mortgage lending, unchanged from Q1 2019.The value of outstanding balances with some arrears increased by 1.8% over the quarter to £13.7 billion, and now accounts for 0.91% of outstanding mortgage balances.

Commenting on the figures, Mark Harris said: “The Bank of England data relates to the first quarter of the year when the impact of Covid-19 had not yet been felt.

“While this makes it feel very historic, it does show what might have been had the pandemic not hit, with an increase in gross mortgage advances compared with the previous year, as well as the value of new mortgage commitments.

High LTV

Harris continued: “The share of mortgages advanced to borrowers requiring a loan-to-value greater than 90% was 5.2%, an increase on the previous year, illustrating the level of demand for high LTV deals.

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“With lenders including Accord, Clydesdale and Virgin Money pulling out of the 90% LTV market this week owing to high demand, after only recently returning when physical valuations were once again allowed, there is clearly a need for the big lenders to commit to this market.

“The number of people taking out high LTV mortgages in the second quarter is likely to fall considerably, not due to lack of demand but lack of products available.

A spokesperson for Virgin Money commented: “We’ve been one of only a few lenders offering 10% deposit products, however we have seen strong increases in demand from customers with small deposits.

“To protect the service for existing customers as well as pipeline applications, we are temporarily withdrawing our 90% LTV products. These products will still be available for existing customers looking to do a product switch. This change means we can continue to focus on providing existing customers with the level of service they’ve come to expect.

Buy-to-let

Referring to the buy-to-let figures, Harris said: “Encouragingly, buy-to-let lending was stable, even though the sector has come in for a lot of change on the tax and regulatory front. Investors are adapting to the new environment and tailoring their portfolios accordingly.

“The impact of tenants unable to pay their rent is providing a further challenge for landlords, although of course this won’t be apparent until the second quarter figures.’

By Joanne Atkin

Source: Mortgage Finance Gazette

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Kensington Mortgages launches 80% LTV residential rates

Kensington Mortgages has resumed 80% loan-to-value (LTV) lending across its residential Select, Core, Young Professional and Heroes ranges, as well as relaunching Help To Buy and buy-to-let (BTL) purchase applications across England.

On Kensington’s Select, Heroes and Young Professional range, rates start from 4.49% for a 2-year fix at 80% LTV and 4.64% for a 5-year fix rate.

There is a maximum loan amount of £750,000 on the Select range, and £500,000 for Core, Right to Buy and BTL products.

Kensington Mortgages has also relaunched its Help to Buy offering and reinstated new-build applications.

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Rates start from 4.54% for a 2-year fix at 75% LTV.

In England, now that physical valuations can take place, BTL purchase applications have been resumed.

Last month, Kensington relaunched BTL remortgage cases; the same rates apply for new purchase applications.

Rates start from 4.49% for a 2-year fix at 75% LTV and 4.69% for a 5-year fix.

Craig McKinlay (pictured), new business director at Kensington Mortgages, said: “We’re excited to introduce 80% LTV across some of our most well-known product ranges and relaunch Help to Buy in the hope that we can try to provide options for those wishing to step onto the property ladder.

“Over the last few months we have experienced an industry-wide unprecedented challenge, and lenders have been working hard to reintroduce product ranges to try and help boost the market.

“We hope these new updates provide our brokers and customers with accessible funding options and greater choice and for those that can restart their housing plans again, we are here to help.”

By Jessica Bird

Source: Mortgage Introducer

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Foundation Home Loans returns to new lending with BTL and residential products

Intermediary-only specialist lender Foundation Home Loans has created and launched buy-to-let (BTL) and residential products, and will return to new lending following the return of its valuation partners to the market.

The products will be available to advisers and their clients from 18 May.

For BTL, all products are available to individuals and limited company borrowers, with a choice of both 2 and 5-year fixed rates in Foundation Home Loans’ F1, F2 and F3 ranges, as well as for both houses of multiple occupancy (HMOs) and large HMOs.

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The product range will also include 2-year BTL discount products which have no early repayment charges (ERCs), available for both F1 and F2 borrowers.

These rates start at 2.94% for F1 borrowers at 60% loan-to-value ratio (LTV).

Foundation Home Loans’ BTL range allows loans up to 75% LTV, has a standardised interest coverage ratio (ICR) of 145% at either 5.5% or pay rate, comes with a 2% fee and reverts to Bank Base Rate plus 4.99% at the end of special terms.

The company has also launched a specialist residential range, offering both 2-year fixed and variable rate products.

2-year rates come with no ERCs, with products up to 75% LTV.

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Jeff Knight (pictured), director of marketing at Foundation Home Loans, said: “Since lockdown was brought in, we have continued to lend by processing our existing pipeline, completing in the region of £37m of lending in April alone.

“However, once lockdown began, we took the strategic decision to only allow new applications once we knew it would be possible to instruct physical valuations again.

“Therefore, given announcements made this week, it is really pleasing to say that we can now offer our products to new applicants once again and will formally launch our full range on Monday.”

By Jessica Bird

Source: Mortgage Introducer

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Virgin Money relaunches buy-to-let and residential products

Virgin Money is relaunching both resi and buy-to-let mortgages after having paused new lending at the start of last week.

The lender has increased its use of desktop valuations and will now be able to extend its core range for properties valued between £80,000 and £500,000.

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Virgin will now be lending up to 75% loan-to-value (LTV) with two, three and 5-year fixed rates for residential remortgages and 65% LTV for residential purchase deals with free valuations starting from 1.62%.

On the buy-to-let from purchase deals are available up to 60% LTV with £300 cashback and free valuation starting from 1.45% whilst the remortgage LTV has increased to 60% LTV.

Virgin has also had to make some temporary changes to its lending policy which will see it unable to accept any form of variable income (overtime, commission, bonus). Affordability will only be assessed on basic salary.

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Where an employed customer is designated as furloughed, or a self-employed customer has applied for the self-employed income support scheme, their income will not be used in the affordability assessment.

Personal income will not be accepted on buy-to-let applications where there is a rental shortfall between 100% and 145%.

By Ryan Fowler

Source: Mortgage Introducer

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Payment holiday is top search term in residential mortgages

The COVID-19 mortgage payment holidays introduced by Chancellor Rishi Sunak took top spot during March 2020 as the most searched for term among brokers within the context of residential mortgages, according to lending database Knowledge Bank.

Beyond the payment holiday, residential mortgage search terms continued as normal in March, with ‘maximum age at end of term’, ‘interest only’ and ‘self employed – one years accounts’ making up the rest of the top four.

Fifth on the list is ‘defaults – registered in the last three years’, which Knowledge Bank reports is likely to rise in the coming months.

For the buy-to-let market, ‘COVID-19 mortgage payment holidays’ was second on the list, but ‘lending to limited companies’ remained top for the third month running.

For second charges, brokers were most likely to search for the maximum loan-to-value ratio (LTV) or minimum loan amount, the latter arguably showing the increasing need to release cash during the current crisis.

The rest of the top five search terms related to second charges were ‘mortgage or secured loan arrears or defaults’, ‘debt management plan – ongoing/current’ and ‘internal/automated valuation model (AVM)/desktop valuations’.

The last option is a new entry, but one that is expected to appear across all categories as the lockdown continues to interrupt in-person valuations.

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In the equity release market, the top five search terms were ‘early repayment charges’, ‘partial repayments’, ‘property with an annex/outbuilding/land/acreage’, ‘tenants in common acceptable’ and ‘second home/property’.

Fluctuations in this category are likely the result of fewer brokers searching for equity release.

Searches relating to bridging loans and commercial lending were not particularly disrupted; the top search terms here were ‘regulated bridging’ and ‘semi-commercial properties’, respectively, and both categories had ‘maximum LTV’ in second place.

However, these categories are expected to change significantly over the coming month, as many in these sectors are now unable to lend.

In addition to monitoring the most popular search terms, Knowledge Bank has established a ‘COVID-19 criteria live feed’.

This registered almost 500 changes to criteria among 14 lenders within just 48 hours last week.

Nicola Firth, founder and CEO at Knowledge Bank, said: “With the number of lender criteria changes increasing by the day there has never been a more important time to have subscription to a criteria search engine.

“As the UK’s largest and most comprehensive mortgage criteria search system, the industry looks to us to provide up-to-date and accurate information on lending policy.

“At this time of change it is important to reflect the issues and the searches that brokers are carrying out as it reflects on the market as a whole.

“The number of broker registrations and searches has increased exponentially over the past three weeks and the a peek into those searches provides us with a fascinating insight.

“April will clearly be even more revealing as the broker searches could change more dramatically than anything we have seen to date.”

By Jessica Bird

Source: Mortgage Introducer

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Skipton relaunches residential purchase mortgages up to 75% LTV

From 9 April 2020, Skipton Building Society will reintroduce its residential purchase mortgage range, which will include products up to 75% loan-to-value ratio (LTV).

The new mortgage range will include: for purchase, a 5-year fix at 1.65% to 75% LTV with a £1,995 fee; for remortgage, 2-year fix at 1.32% to 60% LTV with £995 fee, and a fee free 10-year fix at 2.32% to 60% LTV; and a buy-to-let 2-year tracker for purchase and remortgage at 2.32% to 60% LTV with a £1,495 fee.

The building society is also introducing a new interest-only range for residential customers.

With home valuations suspended during the nationwide lockdown, Skipton is extending the use of desktop valuations, and introducing a revised affordability approach for applicants impacted by COVID-19.

The building society will accept cases where the applicant has been furloughed, but affordability will be based on their furloughed income, including contributions made by their employer to top-up the government’s 80% scheme.

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The maximum LTV where an applicant is relying on furloughed income in 60%. Product transfers are excluded from these restrictions, unless the applicant is also seeking additional funds.

Skipton is continuing to lend on all Scottish business where a Home Report less than six months old can be produced, including lending up to 95% LTV with a new range of products exclusively available for Scottish lending.

Alex Beavis, head of mortgages at Skipton Building Society, said: “During this difficult time, Skipton remains committed to supporting borrowers by providing access to a broad range of competitive mortgage deals.

“We’re working hard to continue to make our proposition as widely accessible as possible whilst also maintaining the high levels of service brokers and customers expect.

“Our reintroduction of 75% LTV deals for buy to let and residential purchases and support for furloughed workers demonstrates this commitment, whilst the launch of special range of Scottish products up to 95% LTV for applicants with a valid Home Report provides a pragmatic approach to supporting borrowers in Scotland in this difficult and usual environment.

“In order to help us continue to support you and your clients, I encourage anyone who needs to speak to us to make use of our online FAQ pages, webchat and email services in order to avoid longer telephone wait times in our contact centre.”

By Jessica Bird

Source: Mortgage Introducer