Furlough creates frenzy in February

In February, the Knowledge Bank team announced a new partnership with Iress following a ten-month working collaboration. The partnership provides a fully-integrated product and criteria sourcing system. Through a single search, brokers will be able to find the exact lender to suit their clients’ needs from both a product and criteria perspective, saving time and effort.

Made up of former brokers, the Knowledge Bank team were working hard in February to ensure brokers were kept up to date with the latest updates. Mid-way through the month, the government announced an extra £3.5 billion to fix potentially unsafe cladding. Following this news, the new category Knowledge Bank launched for cladding will be critical for brokers looking to support clients attempting to move while these cladding issues are resolved.

WC 1st February

The month started in positive fashion with three lenders reinstating products. Dudley Building Society made its full range of mortgage products available for lending into retirement. Harpenden Building Society relaunched its holiday let and second home products and Leek United Building Society returned to the portfolio buy-to-let and interest-only markets.

The trend of positivity continued with Ipswich Building Society returning to 90% LTV for residential products.

While these positive moves suggested a return to normality, lenders tightened criteria where the furlough scheme was concerned, with Leeds Building Society announcing it would no longer accept furlough income when calculating affordability for any new applications submitted.

WC 8th February

The second week of February was an incredibly busy week for criteria changes. The first three days of the week saw 1,500 updates to criteria as lenders continued to adapt. Cladding was again on the news agenda as the government pledged £3.5 billion of extra funding to fix the cladding, promising leaseholders in high-rise blocks, over 18m tall, that they will face no costs for safety works. To support brokers with clients impacted by the cladding issue, Knowledge Bank’s new category will be crucial as brokers can search for lenders’ specific criteria relating to cladding.

Accord Mortgages relaunched 75% and 80% LTV residential mortgages following a temporary suspension due to a Covid outbreak at its Lynch Wood site. Furness Building Society increased its maximum LTV to 90% for residential products.

Despite valuers still being able to get to properties, Shawbrook Bank widened the criteria for its digital valuation service to allow for more automatic property valuations. The maximum property value in its automated valuation model (AVM) criteria has increased to £2m in London and the South East and £1m elsewhere in England, Scotland and Wales.

WC 15th February

In the third week of February, HSBC amended affordability criteria announcing it would accept quarterly, half-yearly and annual bonus payments when considering mortgage affordability. Metro Bank increased its maximum loan size for 90% LTV loans to £675,000 and The Nottingham and NatWest introduced top end LTV products.

Teachers for Intermediaries launched a new ‘joint borrower sole proprietor’ mortgage aimed at first-time buyers. Parents and grandparents can join their child or grandchild on a mortgage by including their income in the affordability assessment. The product is available with a maximum LTV of 80%.

WC 22nd February

In the last week of February, Knowledge Bank announced a full integration with product sourcing system Iress and its Xplan Mortgage system. This revolutionary partnership means all brokers who subscribe to Xplan Mortgages and also Knowledge Bank will now be able to fully source both product and criteria on one platform, at the same time, under one login. This is the very first time that brokers will be able to carry out one search and receive results back for product and criteria simultaneously. This will save brokers a huge amount of time and effort, revealing the best products for each client.

In criteria news, Hanley Economic Building Society reported it has temporarily withdrawn all its products from the market as it tests and installs a new IT platform. The lender hopes to be back lending towards the end of April.

Furlough was again of interest with Digital Mortgages by Atom Bank no longer accepting furlough income for new purchase customers, but for those who are remortgaging, job support income will still be considered.

Although the shortest month of the year, 2,800 criteria shifted in February in response to the wider economic landscape. While there were signs that things were returning to normal with more high LTV products, the furlough scheme was still of interest to lenders. Rumours were leaked towards the end of the month that the Chancellor was set to announce an extension to the stamp duty holiday in the Budget. The government would back 95% loan to value mortgages and the furlough scheme would be extended. With these rumours proving to be accurate, lenders will certainly be adapting to these changes in the coming weeks and months.