Lloyds Bank has recently partnered with Be the Business, a new free to join and use business movement set up to unlock practical and pragmatic practices that help productivity and share them across the UK.
A mother and son have bought the council house where they’d lived for more than a decade thanks to a residential home loan from specialist lender Together.
They had been unable to get a mortgage under the Government-backed right to buy scheme because he had just taken up a new job at a garden centre which supports adults with disabilities, and his mum was receiving jobseekers’ allowance while looking for work.
The mother and son had lived together in their rented home for more than 11 years and had always wanted to buy it together. However, they hadn’t realised that their employment status, as well as the fact they were buying under right to buy, meant they would struggle to get a home loan from a high street bank or building society.
The customers discovered Together could help following a search on the internet. An in-house adviser at the specialist mortgage lender spoke to them both and its expert underwriters looked into all aspects of their backgrounds, including his employment contract, previous payslips, and their long history of rental payments.
Richard Tugwell, a director at Together, explained: “The son had started a new job and was, technically, on a zero hour contract at his new employment, meaning it would have been difficult, if not impossible to be able to get a mortgage through mainstream channels.
“Using our common sense philosophy and a personal approach to mortgage advice and underwriting, we looked at the son’s employment history and found that he had been consistently working beforehand and was working full-time hours in a stable job.
“We also found that the mortgage was affordable in their joint names, taking into account their impeccable credit records and the fact that the mother was actively seeking work, so was eligible for Government benefits. We took all these factors into consideration when deciding to provide the finance.”
Together agreed to provide a £24,470 first charge mortgage, secured against their £46,000 council house, while the customers paid a deposit of £2,300
Mr Tugwell added: “We’re delighted that we’ve managed to help them in their dream of home ownership. The capital repayments on the loan are less than they had been paying their local council in rent, so it was a great outcome for them.”
Lowell, a European leader in credit management services, has delivered another positive set of quarterly results for the period 1 January to 31 March 2018, continuing to deliver on the company’s strategy of sustainable growth and diversification.
› Quarter-on-quarter growth delivered against a strong comparative quarter in 2017.
› Continued realisation of portfolio acquisition opportunities in line with the Group’s required returns and growth strategy (£167m in 6 months to March 2018).
› Business mix remains well-diversified across income lines, sectors and segments, with 47% of portfolio acquisitions coming from forward flow arrangements with existing clients.
› Integration of the Carve-out Business as new Nordic region well underway, and trading in line with expectations.
› On a pro forma basis, 120-month ERC stands at £2.8bn, with last 12 months Cash EBITDA of £402m.
› Extension to existing Revolving Credit Facility (RCF) supported by an expanded group of 13 banks.
› RCF increased to €455m on existing terms, this increases funding flexibility and reduces the weighted average cost of debt.
In line with the guidance we gave in our 2017 Full Year Results (12th April 2018), we remain positive about the year ahead:
› Good momentum from last year has continued into 2018;
› Strong acquisitions and 3PC placements pipeline in place;
› Enhanced European scale and reach gives further opportunities for future debt management and debt purchase opportunities;
› The business will deploy investment capital in order to achieve overall growth and maximise returns for the benefit of the wider Group;
› Recent record unsecured consumer lending in the UK creates sizeable opportunities for future growth; and
› Underlying business resilience as evidenced by IFRS9 preparatory work.
Colin Storrar, CFO, said: “We have built on the momentum of the final quarter of last year and started 2018 positively. Focus has been maintained on the delivery of our core strategy while we continued to work through the integration of our new Nordic businesses, where we are already seeing positive performance. Our prudent approach has seen us make significant investment but do it selectively – taking opportunities both to grow and to review.
“That fundamental strategy of prudent investment, focused on sustainable returns, together with effective and mutually beneficial customer and client relationships continues to set us apart.
“The Group’s net debt position remains largely unchanged despite significant portfolio purchasing. This is a positive reflection of our ability to generate free cash flow for further re-investment.
“The increase in commitments for the Revolving Credit Facility to €455m demonstrates the underlying value and strength seen in Lowell, with the key terms of the facility remaining the same. The extended facility enhances the Group’s ability and flexibility to grow the business, whilst reducing the average cost of debt, in-turn providing for greater cash-flow generation.”
HSBC UK has created the first live use case of open banking for credit applications using the InterConnect platform from Equifax, the consumer and business insights expert. The solution will facilitate quick affordability assessments by allowing individuals to submit their bank transaction information electronically, in less than five minutes, during an application for credit.
Each submission is presented directly to HSBC UK Underwriting in real-time, providing the bank with a fast and informed view of a customer’s affordability and facilitating faster lending decisions.
The Equifax InterConnect platform is a flexible cloud-based decision management platform, which consolidates insight on credit applicants and streamlines the risk decision process. The Equifax platform collates consumer current account transaction information from its third party fintech partners, classified according to FCA guideline categories; committed spend, basic quality of living, essential spend, and discretionary spend.
Jake Ranson, Banking and Financial Institution expert and CMO at Equifax Ltd, said: “This work with HSBC reflects our ongoing commitment to the open banking initiative and our drive to deliver to our banking and financial services clients the best solutions for their customers in this new world of open data.
“We’ve produced a next level data service that helps the industry make the most of new data sharing, and empowers customers with more control over their own financial information. Part of the open banking challenge is educating consumers on what it means in a real life context, and a streamlined credit application process that helps them get a faster decision is a great example.”
The directors of an investment company, who own nearly 250 properties, are set to grow their portfolio after Together delivered funding secured against part of their buy-to-let empire – in just seven days.
The lender provided a second charge loan over 26 of their rental homes, worth £3.5 million, and owned by the high net worth customers, who run their property portfolio through a limited company structure.
The three investors, two who are self-employed directors of the property business, wanted to keep their favourable interest rate on the current first charge buy-to-let mortgages on the portfolio of properties across the North of England, which they bought before the financial crisis of 2008.
However, the customers wanted to unlock the equity they had built up over the past decade through a second charge loan, and wanted the deal to complete quickly so they could press ahead with adding to their property portfolio.
They approached expert packager Crystal Specialist Finance who brought the case to Together, having previously worked closely with the lender, and knowing its reputation for delivering fast finance tailored to their customers’ borrowing needs.
Marc Goldberg, commercial CEO at Together, said: “Our dedicated team of buy-to-let underwriters was presented with the complete package after Crystal’s clients couldn’t find the finance they needed through mainstream lenders.
“These customers run a multi-million pound property empire, which includes buy-to-let homes, commercial property and car parks, through multiple companies.
“All three of the applicants have spotless credit histories and, between them, have years of financial knowledge, as well as the experience they needed to expand their already-successful business.”
Together liaised closely with trusted experts from legal firm Priority Law and the customers’ solicitors, and provided £879,000 through a second charge loan, agreeing repayments on an interest-only basis.
Jo Breeden, managing director of Crystal Specialist Finance, said: “This case shows that professional and experienced landlords and investors are focusing on growing their portfolios, despite the tax and regulatory challenges of recent years. This limited company didn’t want to lose the interest rates on their first charge mortgages by remortgaging their properties, so, in this case, a second charge was a great option.
“It was fantastic that Together pulled out all the stops to deliver in seven days, allowing the customers to move quickly with their plans to purchase more buy-to-let properties.”
Together, which has been at the forefront of the specialist lending market for 44 years, lowered the rates on its buy-to-let products in March. It has also simplified its process for brokers to make it as easy as possible for them to submit portfolio landlord cases.
Following on from its Mortgages Market Study Interim Report, published earlier this month, a number of lender representatives have questioned whether the contents of the report mean the regulator is pulling back from the measures it introduced as part of the Mortgage Market Review (MMR).
Speaking at today’s Financial Services Expo (FSE) Manchester, the premier exhibition for the financial services industry in the North of England, and following the FCA’s own seminar presentation on its report, a panel of lender representatives discussed the Interim Report and a host of mortgage market topics.
Dave Rogers, Intermediary Partnership Director at Barclays, was first to question whether the Report signalled a different approach from the regulator. “In terms of the overall report, I don’t think there’s anything for the industry to worry about,” he said. “But it seems to be a bit of back-tracking on the Mortgage Market Review in terms of its view on price.”
The comments followed a heated session with the FCA when a stream of delegates questioned representatives from the regulator on whether its research on the potential cost-savings for borrowers not on the ‘cheapest rate’ was valid.
Ian Andrews, Managing Director, Intermediary Sales at the Nationwide while welcoming the report, in particular its view that intermediaries are not biased towards products that pay a higher procuration fee, also questioned what the Interim Report meant in terms of the MMR, asking: “Has the FCA softened on the MMR idea that everyone needs advice?”
Richard Tugwell, Group Intermediary Relationship Director at Together, also suggested that the “cheapest [mortgage] isn’t always the best” and “price isn’t necessarily the only driver”, citing the personal circumstances of clients as determining the recommendation provided.
Andrews also said he “couldn’t get his head around” the potential “Trip Advisor for clients” idea the FCA is positing which would allow individuals to compare different brokers/intermediaries. The regulator earlier said that it would like to work with the industry to establish what type of metrics it could use in a broker-comparison tool.
Overall however the lender representatives did welcome the Interim Report. Charles McDowell, Commercial Director at Aldermore, said it was a “fairly strong ringing endorsement” and that it “could have been much, much worse” for the industry. He did however question how the theoretical measures outlined would be put into practice.
The debt collection industry has taken a significant step towards stopping people in debt with mental health problems from having to pay to prove their condition at the very time they are least able to afford to do so.
Coinciding with Mental Health Awareness Week, the Credit Services Association (CSA), the voice of the UK debt collection and debt purchase sectors, has proactively revised its Code of Practice to make it easier for customers to evidence mental health problems that affect their ability to manage their money without having to revert to the Debt and Mental Health Evidence Form (DMHEF) for which GP’s often levy a substantial charge.
John Ricketts, President of the CSA, says that the Association has started from the principle that individuals should not have to pay for medical evidence, where such evidence may be used to help improve their financial, physical and mental well-being: “Those who are most vulnerable should not have to take on more debt to prove it,” he says.
The revised Code advises members not to ask customers to approach health professionals for evidence in the first instance, but rather to engage with the customer to better understand their position, consider what evidence of their health problem is appropriate, and to seek other forms of supporting evidence (e.g a prescription or appointment letter) if necessary.
Only as a last resort, or if the evidence is directly required by the original creditor, should the Debt and Mental Health Evidence Form be requested – and even then, the cost should not be borne by the individual in debt.
The change follows a series of meetings last year, championed by the Prime Minister, Theresa May, the Minister for Mental Health, Jackie Doyle-Price, and the Money & Mental Health Policy Unit, in which various organisations (including the CSA), charities and clinicians (including the BMA), discussed how the (DMHEF) is used and paid for.
Mr Ricketts says it is unacceptable that someone with money and mental health problems should have to pay to evidence their condition: “We’ve therefore taken the proactive step of issuing clear guidance to our members on how they can support the most vulnerable and shifting the focus away from the use of the Debt and Mental Health Evidence Form,” he explains.
“Being in debt can be a stressful experience and we recognise that. We want to encourage other interested groups to follow this lead and work with them to ensure that all creditors, not just CSA members, see this as a positive move and likewise not request evidence that could ultimately add to a customer’s debt burden.”
Jackie Doyle-Price MP, Minister for Mental Health, added: “This is a significant step towards addressing the injustices that people who have mental health problems often face. Around half of those with a debt problem also have mental ill health and many of those with a mental health condition cite concerns about money as a contributing factor.
“Everyone with a mental health condition deserves to be treated compassionately and I encourage other groups to follow the CSA’s lead to ensure their customers’ mental health is both respected and protected.”
Together, one of the UK’s leading specialist lenders, has announced strong growth and record levels of lending in its quarterly results to 31 March 2018, as the group’s loan book reached a new high of £2.78bnt.
Building on over four decades of experience, Together continued to grow strongly, with quarterly lending volumes at a record high of £422m, while maintaining a very conservative loan to value of just 58.8%. The group remained highly cash generative and profitable, with quarterly cash receipts of £259m and profit before tax of £29m.
Group Chairman, Mike McTighe commented: “We maintained our strong growth momentum in the quarter, delivering a 38% increase in originations while continuing to invest in our people, products, distribution channels, systems and governance. We also continued enhancing our senior management team with the arrival of John Lowe from Coventry Building Society. To support our ongoing growth, we successfully issued a further £150m of our bonds and refinanced our £255m Lakeside securitisation on improved terms. This strong progress was reflected in a ratings upgrade from Fitch. We see increasing demand from customers for our broad range of tailored products and our personalised approach to underwriting and remain confident that Together is well placed to deliver on our ambitious future growth plans.”
Marc Goldberg, Commercial CEO, said: “Together continued its strong growth in the last quarter, and we are proud to report another great set of results. The success and continued growth of our business would not be possible without the hard work and dedication of our 700 colleagues, and our maintained focus on positive customer outcomes where we’re continuously working to enhance the experience for our intermediaries and customers through their entire journey – from origination through the lifetime of their loan. We are delighted to have been recognised by our entry into the Sunday Times Top 100 Companies to Work For, at number 34, and I want to thank all of our colleagues for their continued commitment to helping our customers to achieve their financial ambitions.”
Pete Ball, Personal Finance CEO, added: “We are excited to have achieved another period of record lending during the quarter as we grew our loan book to £2.78 billion. As we continue to build out our platform, particular highlights over the quarter have included further strengthening our distribution partnerships with the UK mortgage clubs and networks, continuing to invest in our product range, platform and service offering and the opening of our London office. Looking ahead to the next quarter, we’re mainly focussed on further enhancement of our platform to provide more customers with the products and finance solutions they need and.”
The Registry Trust has today published figures showing that 305,877 county court judgments (CCJs) were registered against consumers in England and Wales during Q1 2018 – more than in any other quarter since current records began in Q1 2005.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “The relentless rise of CCJs in recent years highlights the precarious state of many household s’ financial positions – and the need for more people to receive free debt advice at a much earlier stage.
“CCJs can have a significantly negative impact on credit ratings, and so the effects of this trend could be felt far into the future.
“With people now being taken to court for much smaller amounts of debts compared to a decade ago, supporting people in financial difficulty and making sure they receive the free debt advice they need has never been more important.
“I would urge anyone struggling with their commitments to seek free advice from a charity-run service such as National Debtline as soon as possible.”
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