MCI signs Proportunity to its lender panel

Proportunity, the equity loan provider helping people to raise a large enough deposit, is the latest lender to join The MCI mortgage club. MCI continues to grow its lender panel and offering an increased number of solutions to brokers and their clients.

Proportunity plays a unique role in helping people to buy a home by boosting their deposit size. Proportunity offers a unique, ‘Help-to-Buy’ style equity loan that boosts aspiring homeowners’ budgets by up to £150,000.

Members of the MCI mortgage club will now be able to unlock up to six times salary for their clients. The client can have as little as a 5% deposit and Proportunity will provide an equity loan to increase this to between 15% and 30% of the property value. This will increase the borrower’s chances of getting the mortgage they need and paying a lower interest rate on the mainstream part of their mortgage.

What is more, until the 30th September 2021 there will be no product fees on all new cases coming through MCI mortgage club.

The loan is available on both new-build and existing properties across England and Wales and is available both to first-time buyers and existing home owners. It works alongside a main bank mortgage product, with both loans taken at point of purchase by owner-residents.

FCA authorised and regulated, Proportunity has seen exponential growth since it started lending three years ago and has helped to finance hundreds of homebuyers. The intermediary-only lender is now looking to help over 2,000 buyers over the next twelve months through the help of its distribution partners. It provides brokers with a unique way of helping their clients, particularly those buying an existing property.

Melanie Spencer, head of MCI Club, says: “We are always looking for lenders that bring something different to the table and provide innovative solutions. First-time buyers, some people getting divorced and other people with small deposits can find it particularly challenging to get a mortgage and buy a property. The addition of Proportunity to our panel will therefore give our brokers a unique opportunity to help more clients as they will be able to borrow up to six times income with just a 5% deposit. Proportunity provides a pioneering new approach and is a breath of fresh air to the lending market, so it is great to welcome them onto our panel.”

Vadim Toader, CEO of Proportunity added: “We are really excited to work together with The MCI Mortgage Club to help today’s young buyers afford the homes they want. It’s a pain point that is becoming increasingly acute as house prices grow and the Help-to-Buy scheme comes to an end. We hope that MCI’s club members will immediately see the benefit that our loan can provide for those struggling with deposits and long-term affordability. To welcome brokers through our new partnership with MCI, we will waive all product fees for the next two months until 30th September 2021 for all cases submitted through MCI club.”

Property sales hit a blistering new record in June – doubling May’s sales

Property sales hit a new record of 213,120 in June (not seasonally adjusted), more than double the number in May.

This is the biggest month for sales since they were first measured like this in 2005.

June is always a popular month for the market, but this huge surge is largely due to people racing to beat the stamp duty holiday deadline at the end of last month.

Sales were higher than back in March, the original deadline, when there were 174,060 sales.

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “The red-hot property market hit a blistering peak in June, as frenzied buyers raced to complete on their new home before the stamp duty holiday tapered at the end of the month. The question is whether the overheated market means buyers have been burned.

“June was the final month before stamp duty holiday was cut from making the first £500,000 of a property purchase tax free, to exempting the first £250,000. The holiday was originally due to end in March, and the extension wasn’t announced until just before the March Budget. This meant buyers hit the market in huge numbers, desperate for a quick deal. In June, twice as many property sales completed as is usual for this time of year.

“Unfortunately for these buyers, sellers didn’t hit the market in the same kind of numbers. There’s been a huge imbalance between buyers and sellers during the spring and early summer, which has meant panic buying, bidding wars, and the return of gazumping. Early figures from the commercial indices indicate this meant hefty price rises, with the Nationwide index showing the biggest annual surge in over 15 years.

“In this kind of frenzied market it’s easy to pay far more than the going rate. It’s also easy to feel you don’t have any other choice, so you end up pushing your budget and over-stretching your finances. Months down the line, you could seriously regret the lifestyle compromises you’ve had to make.

“When the market cools, buyer remorse tends to kick up a gear. The RICS survey in June showed agents expected sales to slow through the summer and into the autumn. Price rises are already showing signs of slowing, and there’s even the potential for them to take a step back if the economy is struggling with new variants when furlough is withdrawn.

“The good news is that even if you have overpaid and prices fall, if you’ve bought a home you love, you could afford, and you intend to live in for the long-term, then as long as you have a reasonable amount of equity, it doesn’t have to matter what happens to its theoretical price in the years you’re living there.

“However, if you have paid more than you can strictly afford, the sooner you address it the better. It’s well worth drawing up a budget to work out where you can cut costs in order to make higher mortgage payments, so you can keep on top of your finances and don’t end up being forced to sell at the worst possible time.”

Property sales hit a blistering new record in June – doubling May’s sales

Property sales hit a new record of 213,120 in June (not seasonally adjusted), more than double the number in May.

This is the biggest month for sales since they were first measured like this in 2005.

June is always a popular month for the market, but this huge surge is largely due to people racing to beat the stamp duty holiday deadline at the end of last month.

Sales were higher than back in March, the original deadline, when there were 174,060 sales.

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “The red-hot property market hit a blistering peak in June, as frenzied buyers raced to complete on their new home before the stamp duty holiday tapered at the end of the month. The question is whether the overheated market means buyers have been burned.

“June was the final month before stamp duty holiday was cut from making the first £500,000 of a property purchase tax free, to exempting the first £250,000. The holiday was originally due to end in March, and the extension wasn’t announced until just before the March Budget. This meant buyers hit the market in huge numbers, desperate for a quick deal. In June, twice as many property sales completed as is usual for this time of year.

“Unfortunately for these buyers, sellers didn’t hit the market in the same kind of numbers. There’s been a huge imbalance between buyers and sellers during the spring and early summer, which has meant panic buying, bidding wars, and the return of gazumping. Early figures from the commercial indices indicate this meant hefty price rises, with the Nationwide index showing the biggest annual surge in over 15 years.

“In this kind of frenzied market it’s easy to pay far more than the going rate. It’s also easy to feel you don’t have any other choice, so you end up pushing your budget and over-stretching your finances. Months down the line, you could seriously regret the lifestyle compromises you’ve had to make.

“When the market cools, buyer remorse tends to kick up a gear. The RICS survey in June showed agents expected sales to slow through the summer and into the autumn. Price rises are already showing signs of slowing, and there’s even the potential for them to take a step back if the economy is struggling with new variants when furlough is withdrawn.

“The good news is that even if you have overpaid and prices fall, if you’ve bought a home you love, you could afford, and you intend to live in for the long-term, then as long as you have a reasonable amount of equity, it doesn’t have to matter what happens to its theoretical price in the years you’re living there.

“However, if you have paid more than you can strictly afford, the sooner you address it the better. It’s well worth drawing up a budget to work out where you can cut costs in order to make higher mortgage payments, so you can keep on top of your finances and don’t end up being forced to sell at the worst possible time.”

Paradigm Mortgage Services announces new partnership with Molo Finance

Paradigm Mortgage Services, the mortgage services proposition, has today announced a new partnership with digital mortgage lender, Molo Finance.

Paradigm member firms will have access to Molo Finance’s digital mortgage services, including the technology it uses to speed up the lending process and provide a seamless, completely paperless, experience.

The lender currently offers a range of buy-to-let purchase and remortgage products for both individual and limited company borrowers. These cover both standard and HMO properties and it offers two- and five-year fixed-rate options from between 65% to 80% LTV.

Molo is the first lender to offer mortgages underwritten entirely online, making real-time lending decisions to provide advisers and their clients with quicker access to borrowing. Customers get a decision-in-principle in minutes while full application reviews can be processed in 24 hours.

This provides greater transparency on customer cases during and after the application, while smart integrations with partners like Rightmove and Experian have allowed it to simplify the process.

John Coffield Head of Mortgages at Paradigm Mortgage Services, commented: “Technology is continually moving the mortgage market forward in terms of speeding up lender decisioning, underwriting and processing. Paradigm have long been advocates of technology and innovation which supports advisers and creates efficiencies within the mortgage application process. We are very pleased to announce this new partnership with Molo Finance, one of those lenders at the cutting-edge in terms of the technology it uses and the process it wants to deliver to both advisers and their clients. We are looking forward to working with the team at Molo to introduce their proposition to our member firms.”

Francesca Carlesi, CEO and Co-Founder of Molo, said: “We are delighted to partner with Paradigm Mortgage Services, which is one of the leading distributors in the mortgage industry and will add to the excellent partners we already have here at Molo. Recognised as the best mortgage club in the UK, and with more than 15 years’ experience, Paradigm is well-positioned to offer Molo products to its clients. We’re excited to work with a broker who understands our mission and is forward-thinking in its approach.”

House prices up by as much as £100,000 in a single year

Research from the national estate agent, Keller Williams UK, has revealed where across the UK homeowners have seen the biggest cash boost in property values in just a single year.

The analysis of Land Registry data by Keller Williams UK found that the average UK homeowner has seen a cash boost of £23,116 in just 12 months, with the average UK house price climbing from £231,508 in May of last year, to £254,624 in May 2021 (latest available data).

Biggest cash increases by region

Regionally, the South East has seen the biggest increase with the average home now worth £29,199 more than a year ago.

The latest UK House Price index shows that the North West has seen the largest rate of annual growth of all regions at 15.2%. No surprise then, that the region has also seen the second-largest cash increase in the last year at £24,987.

In contrast, London has seen the lowest rate of annual growth of all regions at 5.2%, but the higher price of property in the capital means that London homeowners have enjoyed the third-highest cash increase at £24,987.

Biggest cash increases by local authority

The capital is also home to the area that has enjoyed by far the highest cash increase at local authority level. Homeowners in Hammersmith and Fulham have seen the value of their home increase by a huge £101,496 in the last year alone. However, just one other area of London makes the top 10 biggest cash increase, with homeowners in Bromley enjoying a £59,885 jump in the value of their home.

Outside of London, the average house price in Rutland has climbed by £88,625 in a year, with Oxford (£63,009), West Devon (£61,513) and Cotswolds (£60,825) also seeing values climb by more than £60,000.

Other areas to make the top 10 include Elmbridge (£57,168), Mole Valley (£54,824), Derbyshire Dales (£52,181) and Three Rivers (£47,607).

CEO of Keller Williams UK, Ben Taylor, commented: “The latest market data shows that house prices have climbed by 10% across the UK which is a phenomenal rate of growth. While not all areas have performed as strongly in percentage terms, the differing price of property across the UK market means that the actual cash increase has been sizable, even in the worst-performing regions.

“On average, UK homeowners are over £23,000 better off than they were year ago and this is proof, if ever it were needed, that there’s no better investment than bricks and mortar.”

Comment from MaPS: FCA taking action against debt packager firms

“The FCA’s review highlights the potential harms consumers face if they are not able to access impartial debt advice. We welcome the FCA’s intervention in tackling poor practice in debt packager firms and will continue to work with them and others to ensure that consumers are signposted to providers of free and impartial debt advice.

“We have significantly increased free debt advice capacity ahead of an expected rise in the need for advice due to the financial impact of the pandemic. Many people will be seeking support for the first time and may not know where to begin. Anyone who is worried about debt should visit the Debt Advice Locator tool on the MoneyHelper website to find a qualified free adviser to help you get back on track.

“Free debt advice can be life changing for people in difficulty. Our research shows that 63% of customers with debts are reducing or clearing them within 3-6 months after receiving impartial debt advice.”

Craig Simmons, Head of Debt Policy and Strategy at the Money and Pensions Service

Coalition of consumer groups, charities and industry bodies calls for inclusion of paid for online advertising in Online Safety Bill

A coalition of consumer groups, charities and financial services industry bodies, including Which? UK Finance, Martin Lewis and MoneySavingExpert, the Personal Investment Management and Financial Advice Association (PIMFA), the Investment Association, the Association of British Insurers and the Money and Mental Health Policy Institute, among many others is today renewing its call for the Government to include paid for online adverts within the scope of the Online Safety Bill ahead of it being presented for pre-legislative scrutiny.

It comes as research from Which? found that the growing shift towards everyday tasks being carried out online following the onset of the pandemic has led to a devastating surge in scams.

Action Fraud figures, in the year to April 2021, show that 413,553 instances of fraud were reported – an increase of a third (33%) on the previous 12 months. More than £2.3 billion was lost by victims as a result, causing huge financial and mental distress.

To date, the Government has indicated that online advertising will be dealt with through a separate review of advertising regulations which is only in its infancy.

“As a coalition of consumer groups, charities and industry bodies, our united view is that the Government’s current approach to tackling online fraud is flawed. It will likely lead to complex and muddled regulations, and far worse consumer outcomes than an Online Safety Bill with a comprehensive approach to online fraud.

“While we welcome the recent inclusion in the Bill of fraud carried out through user generated content and fake profiles on social media websites, there is still a long way to go. Failing to include online advertising in the Bill leaves too much room for criminals to exploit online systems.

“This view is backed by the FCA, Bank of England, City of London Police, Work and Pensions Committee and Treasury Committee, who have all commented that the scope of the Online Safety Bill should be expanded to include fraud carried out via online advertising.

“We do agree with the Government that the impact of these frauds is often devastating, not just financially but also emotionally. That’s why we urge ministers to reconsider their current plan, and make sure the Bill protects as many consumers as possible from the full extent of the devastation caused by scams.”

Zephyr Homeloans reduces rates across majority of products

Zephyr Homeloans, the specialist buy-to-let (BTL) lender owned by Computershare, has reduced rates across the majority of its products.

Zephyr’s new rates for its five-year, fixed-rate, standard property BTL mortgage products start at 3.04%, with rates reduced by up to 0.25%. Its two-year, fixed-rate, standard BTL mortgage products start at 2.84%.

The lender’s rates for specialist new builds, flats above commercial property, houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFBs) now start at 3.43% for a five-year, fixed-rate loan.

Paul Fryers, Managing Director at Zephyr Homeloans, said: “Our broad range of products offer several, flexible options to fit the individual needs for landlords and property investors.

“Reducing the rates across a majority of Zephyr’s mortgage products reinforces our position as one of the more competitive lenders in the UK buy-to-let market.”

Zephyr will continue to offer its 80% LTV mortgages, which are exclusively available through its packager channel.

Zephyr Homeloans is a trading name of Topaz Finance Limited, a part of the Computershare Loan Services division of the Computershare group.

Less than half of us have enough emergency savings – including retirees and higher earners

51% of people don’t have enough emergency savings.

Almost half of retirees (46%) don’t have a big enough safety net, along with almost one in four households earning over £100,000.

11% of UK households have a savings shortfall, but have no idea they’re vulnerable.

Statistics from a national representative survey of 10,030 UK adults by Focaldata in June 2021.

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “More than half of us are vulnerable to nasty surprises, because we don’t have enough emergency savings to protect ourselves. Even retirees and higher earners have holes in their savings safety net. What’s even more alarming is how many people with a shortfall have no idea of the risk they’re taking, and that they’re not as resilient as they think.

“People of working age should have emergency savings of 3-6 months’ worth of essential spending in an easy access account, while those in retirement need 1-3 years’ worth. However, 52% of people of working age and 46% of retired people fall short of this.

“It’s worth bearing in mind that this research was carried out more than a year into the crisis, which has exacerbated the gap between those with enough cash to get by and those who are struggling. Among those without enough emergency savings, two in five households say things have got worse since the start of 2021, and only one in five say they’ve improved, so there’s a good chance we’re less resilient than at the outbreak of the pandemic.

Higher earners

“The emergency savings gap isn’t just an issue for lower earners: 23% of those households bringing in over £100,000 a year say they couldn’t cover their essential outgoings for three months.

“This may be due in part to the tendency of expenses to expand to fill the cash available, so there’s nothing left over for savings. If you live in a property with a large mortgage, have children at private school, or expect to take several holidays a year, then eventually all these things feel like necessities that you can’t scale back in order to free up cash for emergencies.

“They may have other assets, including investments, which they feel they could draw on in an emergency. And there will be higher earners who find the target of 3-6 months of these outgoings is so high that they decide it’s a waste to keep that much in cash earning next to no interest and want to put it elsewhere to make it work harder. They risk having to withdraw money from their portfolio at completely the wrong time, which can mean facing a loss. At times, depending on the nature of the investments, this can be significant.

“Those on higher incomes who lack savings are far more vulnerable than they think. A drop in income, even in the short term, could leave them falling short of their essential commitments, which can have far-reaching consequences for years.

Perception differs from reality

“Millions of those who don’t have enough savings say they worry about it all the time. Almost two in five are worried about it, and one in five worry every day. But while this is concerning, it at least allows them to prioritise savings whenever they can. What’s even more alarming is the huge number of people who don’t have enough savings and aren’t worried about it at all – particularly among retirees.

“One in ten (11%) people don’t have enough set aside in savings to be financially resilient, but are perfectly happy with the level of savings they have. This rises to 21% among those who have retired. This may be because they have no idea of how much they should have, so having any savings at all lulls them into a false sense of security.”

How much cash should you have?

“People of working age should have 3-6 months’ worth of essential spending in an easy access account for emergencies. Our calculations show that this means having at least £3,000 in savings for the average single person. In retirement, you should have 1-3 years’ worth, which should be at least £9,000.

“However, you need to calculate the level that’s right for you. The first step will be to work out what you’re actually spending. Some people keep a spending diary so they know where their cash is going.

“Once you know what you’re spending on various things, you need to decide which of those expenses you want to be able to meet if you lose your income. Some people want to cover the lot, others want to ensure they’re still comfortable, while others just choose to keep the essentials. The decision over which expenses to cover will depend in part on the kind of compromises we’re prepared to make during tough times, and just how high a savings target we’re happy to aim for.

“Where you fall within the range for each age group will often come down to your circumstances too. During your working life this will include things like how secure your employment is, who else depends on you, and how much flexibility you have over your outgoings. In retirement it will include issues such as how you are taking a retirement income, and how much of it is guaranteed.”

StepChange responds to new FCA business plan

In a speech to mark the publication of the Financial Conduct Authority’s (FCA) new business plan for 2021/22, FCA CEO Nikhil Rathi set out the vision for its role in the post-Covid, post-Brexit environment, pledging to be a more, innovative, adaptive and assertive regulator.

Responding to the business plan, Peter Tutton, Head of Policy, Research and Public Affairs at StepChange, said: “With the country dusting itself off from the financial impacts of the pandemic, the role of the FCA in ensuring more positive outcomes for consumers will be crucial over the next few years, so it’s extremely encouraging to see this new set of priorities that builds on the work of the Woolard Review and encompasses such a wide range of needs. We’re particularly pleased to see a focus on consumers in financial difficulty. In coming months, many people who’ve not recovered financially from the last 18 months will be turning to lenders for support – building on tailored support guidance put in place during the pandemic is crucial to ensure those in difficulty can access the help they need.

“Meanwhile, with our research showing 7 million people were behind on essentials or borrowed to make ends meet due to the pandemic, a commitment to increase the availability of legal alternatives to high-cost credit while ensuring firms properly assess affordability and support customers who encounter difficulty is more important than ever. We hope the Government will match this commitment with complementary changes to public policy, like the establishment of a national No-Interest Loan scheme.

“It’s also encouraging to see the FCA confirm its intention to appraise current debt advice rules with a view to ensuring people can access high quality advice. For too long, consumers have faced significant barriers to getting the right help, such as falling prey to IVA lead generators impersonating debt charities. Dealing with problems such as these to ensure that there is good availability of high quality, free debt advice that identifies accessible solutions for financially vulnerable people is vital.”