Together helps a mum and son achieve their property ownership dream

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 Q1 2018 Results: a positive start to the year and increased funding flexibility

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.

Performance Highlights

› 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.

Outlook

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.”

Equifax works with HSBC UK on first live open banking credit application solution

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.”

Landlords grow their buy-to-let portfolio through a seven-day second charge loan

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.

Lender representatives at FSE Manchester question FCA is ‘back tracking on MMR’

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.

Debt collectors act to support customers with mental health issues

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 delivers another quarter of strong growth and record lending

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.”

‘Relentless’ rise in CCJs highlights precarious state of household finances

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.”

Leap in tribunal awards

The number of tribunal awards registered during the first quarter of the year rose by a half compared to Q1 2017, according to figures released today by Registry Trust.

Registry Trust is the Registrar of Judgments, Orders and Fines in England and Wales (on behalf of the Ministry of Justice). In addition, it collects, verifies and publishes judgment information from jurisdictions throughout the British Isles and Ireland.

Sixty-seven tribunal awards were issued during Q1 2018, 21 more than during Q1 2017.

Despite rising in number, the average tribunal award dropped in value by almost a quarter.

As a result of these changes, the total value of tribunal awards stood at £214,416 for the quarter, 11 percent higher than Q1 2017’s total value.

Registry Trust runs the “FastTrack” service for the Ministry of Justice. FastTrack offers winners of ACAS settlements and employment tribunal awards the opportunity to have their debt enforced by an authorised High Court Enforcement Officer (HCEO). If a defendant refuses to pay out on an issued award, FastTrack is the mechanism in place to instruct a HCEO to enforce an award. There are many reasons why companies refuse or fail to pay awards: well under half are paid in full.

Malcolm Hurlston CBE, chairman of Registry Trust said: “It is sensible for people who win at tribunal to think early about getting help through FastTrack which works effectively in their interest.”

In 117 of 277 cases during the three quarters of 2017, where HCEOs were allocated via FastTrack, HCEOs were able to gather payment where the defendant had otherwise not paid.

In Q1 2018 Registry Trust received 56,881 requests to search the register for England and Wales online at www.trustonline.org.uk. TrustOnline allows anyone to search for judgments and similar information registered against consumers and businesses in jurisdictions across the British Isles and Ireland.

Subcontractors wary of working with large construction firms following Carillion collapse

Half of subcontractors working within the UK construction sector are wary of working with main contractors, following the collapse of Carillion, according to a new study by specialist financial services provider, Bibby Financial Services (BFS).

Findings of the Subcontracting Growth study reveal a shift in attitudes towards working within the supply chains of large construction firms, following the Wolverhampton-based giant’s liquidation in January. Almost half of subcontractors (47%) say that it has made them cautious of working with large contractors, and the same proportion now has concerns over the financial stability of similar firms.

The prospect of a main contractor going into administration is the second greatest threat to subcontractors over the next twelve months, behind late payment.

Specialist Finance Director at BFS, Kash Ahmad, commented: “It is clear that January’s news has sent repercussions throughout the sector and subcontractors working within the supply chain of large main contractors have serious concerns about others suffering a similar fate. It’s now vital that both public and private sector organisations work together to support the sector’s SMEs at this pivotal time.”

Following the collapse of Carillion, subcontractors are calling on the Government to introduce measures to prevent similar supply-chain collapses in the future.

Four-fifths (82%) say they support mandatory payment terms for public sector suppliers and more than two-thirds (69%) believe there should be better public reporting of supply chains. Furthermore, 59 per cent of firms say that Project Bank Accounts – ring-fenced accounts ensuring that all parties in the supply chain are paid on time – should be mandatory.

Kash Ahmad continued: “There are a number of measures that subcontractors and small construction firms would like to see introduced to level the playing field between them and the larger contractors with which they work. As an industry, we must look to address the power imbalance that has become indicative of the sector. Only when this is achieved will the sector reach its full economic potential.”

Findings of the study highlight this power imbalance. More than half (56%) say they must accept onerous contract terms of large customers or face losing work, and 44 per cent say that contracts are difficult to understand. Just six per cent say they seek professional support when negotiating contracts.

The data echoes recent comments from Small Business Commissioner, Paul Uppal, who said that many businesses would “rather have a very, very bad commercial relationship than none at all.”

The research shows that some subcontractors have acted to protect their businesses following Carillion’s collapse. A fifth of firms (19%) say they have evaluated their cashflow position, and 16 per cent say they have reviewed existing agreements with main contractors. However, two-thirds (66%) are yet to take any action.

Kash Ahmad continued: “Small construction firms often have Hobson’s choice. They must either accept the burdensome contract terms outlined, or lose contracts and vital revenue. Very rarely can they influence the terms of these agreements, and this often leads to disputes and even insolvency further down the line.”