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Mortgage roundup – a month of firsts in the mortgage sphere

This week’s mortgage roundup involves a month of firsts and milestones, with Proportunity and BuildLoan launching UK-first products for buyers. Meanwhile, SoMo releases a second-charge product set to disrupt the market, and both Access FS and Just Mortgages break the broker-count millstone. Finally, The Nottingham enters the holiday let lending space.

UK’s first zero deposit mortgage product comes to market

London-based neolender Proportunity has announced it will bring the UK’s first zero deposit mortgage product to market later this year.

The announcement was made as part of its crowdfunding campaign with Seedrs to grow the business and help more people in the UK become homeowners sooner.


With the deadline for the market’s biggest player, Help to Buy, brought forward to October this year, Proportunity aims to capture the £5 billion market gap set to be left behind.

The addition of a zero deposit mortgage product to Proportunity’s existing offering, which also includes a mortgage booster loan, is the latest way the company is looking at disrupting the broken borrowing system.

Proportunity offers mortgage boosting solutions that help its customers access the finance they need to get on to the property ladder. Its Zero Deposit mortgage removes the biggest barrier to homeownership: saving for a deposit.

As well as the zero deposit product, Proportunity also mentions in its fundraising video that it will be looking into a Rent to Buy offering. The crowdfunding campaign invites investors to join Proportunity on its journey to help 1 million people onto the property ladder by 2030 and become the go-to home buying partner for anyone struggling to buy a home. The campaign ended on July 30 and the final investment will be announced this month.

Vadim Toader, Proportunity chief executive officer and co-founder, explains: “In today's market, rising interest rates, an unaffordable mortgage, and cost of living crises are making the process of buying a home even more challenging. We are committed to becoming a trusted provider of home buying services for anyone struggling to buy the home they desire.”

“The new products we are developing will enable buyers to overcome various barriers to homeownership. We’ve already financed over £100 million of homes, helping over 260 people onto the property ladder, and we’re not slowing down anytime soon.”

House prices are increasing at the fastest rate in 17 years due to the cost of living crisis and rising inflation. This is exacerbated by 1.2 million properties now requiring higher stamp duty charges and higher interest rates from mortgage lenders.

To get on the property ladder, buyers may explore other lending options to make up the deficit between the deposit they have from savings vs. what they need to put down up-front. Proportunity aims to provide homebuyers with the right financing tools to help them get on or move up the property ladder, so they can buy the home they want, not just what they can afford.

Stefan Adrian Boronea, chief technology officer and co-founder, comments: “With house prices in the UK increasing at such a pace, it’s more important than ever for home buyers to know which areas are currently most undervalued, so they are able to make sound and informed decisions - Proportunity can help them do that.”

“Our Proportunity Home Index (PHI) enables customers to buy smarter - identifying undervalued homes and avoiding overpriced ones.”

Proportunity’s proposition is similar to the UK government's Help to Buy scheme. However, it is available on any home, removing the restriction to new builds and raising the home’s price cap from £600,000 to £1 million. It uses AI technology to analyse millions of data points to see if a property is being purchased at or under its true market value.

To reduce the affordability gap, Proportunity provides mortgage boosters to offer an up-to-£150,000 loan to customers purchasing viable properties. This means buyers can still access better mortgage rates, with just a 5% deposit. The Proportunity loan lets its customers buy the house they want now rather than saving for another 5 to 10 years. 

BuildLoan launches first Help to Build Mortgage

BuildLoan has launched the first-ever Help to Build Mortgage as part of the government’s long-awaited Help to Build Equity Loan Scheme.

Created by BuildLoan in partnership with Darlington Building Society and Homes England, this indicates ‘the dawn of a new era’ in the new-build housing market.

Help to Build will help people live in brand new homes they have designed themselves. It works in a similar way to the Help to Buy Equity Loan Scheme, due to end in March 2023, but is for self and custom builders.

Under the scheme, the maximum land and build costs can be up to £600,000 and borrowers will need just a 5% deposit. The other 95% is via a Help to Build Mortgage, which can only be provided by lenders approved by Homes England, which runs the scheme.

Help to Build Mortgage

There are two products in this first Help to Build Mortgage range, both three-year discounted rates at either 5.39% or 5.99%.

During the build, borrowers pay on an interest-only basis, making monthly lower. Once the build is complete, the Help to Build Mortgage switches to a standard repayment mortgage which must be in place for the duration of the equity loan.

Like many of BuildLoan’s products, the Help to Build Mortgage offers advance stage payments which means borrowers receive funds before each stage of their project. They will also benefit from stage payments being linked to the project costs with no risk of receiving less than expected due to an interim valuation.

Details of the Help to Build Equity Loan Scheme

Self and custom builders have three years to build their home, after which the Help to Build Equity Loan is paid by the government to the lender. This can be up to 20% of land and build costs outside London and up to 40% within London. The equity loan therefore reduces the mortgage balance owed to the lender.

Payments on the equity loan are also interest-only but are free for the first five years. After that interest is charged starting at 1.75% in year six increasing in April each year by the rate paid the year before and 2% plus the Consumer Price Index (CPI).

Borrowers can pay back the equity loan at any time after the build is finished but it must be repaid by the end of the mortgage term or when the home is sold. The amount repayable is based on the property's value at the time the equity loan is redeemed, not the amount that was initially borrowed.

A boost for the custom build sector

Commenting on the launch, Raymond Connor, chief executive officer of BuildLoan, says: “I have waited a long time to see this scheme come to fruition and it will create a whole swathe of new build housing opportunities. People can build, or have built for them to their specification, the types of home they want to live in.”

“Help to Build is going to significantly boost the custom build sector, and property developers already have land earmarked for this purpose. Homes England has built up a large database of people registering their interest and our own database consists of approaching near to 1,000 people who want to use the scheme.”

“We have worked extremely hard to develop the Help to Build Mortgage and more lenders will be launching their products over the next six months in partnership with us.”

Andrew Craddock, Darlington Building Society chief executive, adds: “This is an exciting time to be a self and custom build lender and we are thrilled to be the first to launch our Help to Build Mortgage with BuildLoan. Help to Build opens up the housing market and enables more people to design and build their dream home, starting with a 5% deposit.”

SoMo’s new challenge for brokers – find a better second-charge loan

Specialist lending firm SoMo Bridging has challenged brokers to find a better second charge loan after launching its ‘confident’ new campaign this July.

The Greater Manchester-based firm has already seen a 25% increase in its second charge lending over the past year, and these loans now make up half of its lending.

SoMo’s FoMo marketing campaign earlier this year, which aimed to educate brokers on the huge potential of second charge, generated a 63% increase in second charge enquiries.

Sales director Jade Keval comments: “We’re so confident we have the best second charge product on the market so we’re asking brokers to challenge us to say yes to any second charge deals on their desk. Our second charge loans are superior both in terms of rates, which start at 0.6%, and the fact that we lend for any business purpose.”

“When we say any business purpose, we mean it. That could include working capital, refinancing a Coronavirus Business Interruption Loan Scheme, paying staff or funding new ventures. We recognise that as the cost of living crisis deepens, businesses and individuals could struggle financially. For many, a second charge loan could get them out of a tight spot.”

“So many brokers don’t realise the potential of second charge and Equitable Charge loans. A number of first charge lenders won’t even approve the second charge consent but as SoMo doesn’t require consent from the first charge lender, we see an increased acceptance rate of clients. We’re happy to accept this risk and our success in this area speaks for itself.”

SoMo welcomes all applicants, from individuals with adverse credit to businesses with a short trading history, and will lend on a director’s main residential home – even if it’s in the individual’s name. 

The bridging lender aims to be as inclusive as possible with a quick and easy lending process.

Keval concludes: “SoMo is lending more month on month and year on year. second charge loans are a key part of our growth strategy and we’re committed to ensure we have the best and most widely available product on the market.”

Access FS recruits 100th broker

Mortgage and protection broker, Access Financial Services, has been joined by its one-hundredth broker.

It has achieved this in just five years after its founder, Karl Wilkinson, set up Access FS as a one-man band in April 2017.

The firm also doubled revenues in its last financial year, ending April 30 2022, compared to the year before. Its ambition now is to not only double the number of brokers in the firm, but to enable them to double their earnings.

It will do this by broadening the number of products brokers can offer their customers whilst providing business growth support and training that covers much more than the usual "product knowledge" training. Its aim is to help all its advisers earn six-figure sums by working with them to implement bespoke strategies into their own core businesses.

While many of the brokers and advisers joining Access FS do so from other adviser firms, many join via the company’s academy which brings in talented individuals from outside of the mortgage industry. The academy takes them through their CeMAP exams, teaching them how to provide advice. Access FS also welcomes people who formerly worked in banks but who have left with the ambition to become a mortgage broker.

Half of the brokers currently part of Access FS are specialist protection brokers, the other half advise on both mortgages and protection. Uniquely, Access holds general insurance permissions so that its brokers can offer the whole range of insurance products, even simple things like holiday and car insurance.

Access FS enables brokers to advise on a wide range of loans and mortgages, including:

  • Mainstream lending

  • Buy-to-let, including specialist and portfolio buy-to-let

  • Equity release and later life lending

  • Commercial lending

  • Bridging loans

  • Development loans

Access FS brokers benefit from whole of market lender, protection, and general insurance panels, with access to all mainstream banks, lenders and a wide range of specialist lenders.

Mortgage roundup – a month of firsts in the mortgage sphereChief executive officer of Access FS, Karl Wilkinson, says: “It’s a great achievement that we have managed to attract one hundred advisers to join us in just five years from a complete standing start.”

“We try to do things a little differently from other broker firms, creating a collaborative environment for brokers to help each other rather than competing with each other. There really is plenty of business out there to go round."

He adds: “Protecting the customer and providing best advice is our number one priority, so our compliance standards are high but with a common-sense approach. Many of our brokers who have worked at networks and other broker firms report that the way Access FS works is like a breath of fresh air compared to what they have known previously.

“Our ambitions now are to continue to grow and to double in size in the next twelve months.”

Just Mortgages smashes through 600 broker milestone

Lending broker firm Just Mortgages has surpassed its 600-broker milestone with a raft of new brokers joining their employed and self-employed divisions.

The company announced that it now has 618 brokers and is on target to reach its goal of 1,500 brokers by 2027 which will be comprised of 1000 self-employed brokers, 425 employed and 75 wealth advisers.

Just Mortgages aims to become one of the largest mortgage broker firms in the UK by attracting those brokers already in the industry but most growth will continue to come via their academy initiative which brings new people into the financial services industry.

It recently launched a new academy programme, an enhanced digital marketing support package and will soon be announcing a geographical expansion, all of which are designed to attract and support the brokers throughout their professional careers.

Mortgage roundup – a month of firsts in the mortgage sphereLeading the expansion is John Phillips, national operations director at Just Mortgages, who comments: “We have set ourselves some ambitious growth targets, but the recruitment team just deliver month after month, and we are thrilled to welcome new brokers to the Just Mortgages family.”

“Once brokers are qualified that is very much the beginning of the journey with us, not the end. Their success is our success, and it is our job to provide brokers with the tools they need to deliver the best possible service to their clients. Over the next few years as rate rises and cost of living begins to bite into household budgets, the value of advice will increase substantially.”

He adds: “We are going to play our part in ensuring that there is a strong and professional mortgage advice sector to help individuals and families with their borrowing and protection goals.”

The Nottingham breaks into holiday lets lending

The Nottingham has ‘packed’ even more options into its mortgage offering with the introduction of holiday lets lending.

It has responded to the demand for staycations by unveiling a range of products designed to help those looking to invest in a holiday rental.

The building society’s criteria includes lending on up to two holiday lets (in England or Wales), with no minimum personal income requirement.

It will also take into consideration up to 32 weeks’ rental yield and allow the owner to utilise the holiday let for personal use for up to 60 days each year.

The new products (all available up to 75% LTV) include:

  • Two-year fixed with £999 fee (£0 upfront), 3.55%

  • Five-year fixed with £999 fee (£0 upfront), 3.82%

  • Two-year discount with no ERCs and £999 fee (£0 upfront), 3.25%

Mortgage roundup – a month of firsts in the mortgage sphereThe Nottingham’s head of mortgage product, Christie Cook, comments: “As we head into summer hopefully our competitively priced range of holiday let products, aligned with our lending criteria, will bring some sunshine to brokers and their customers.”

“The challenges and restrictions brought about by the pandemic led many to rethink certain aspects of their lives including how, and where, they take their holidays – with a well-publicised surge in the number of staycations.”

“That in turn has created a potential investment and income opportunity for those looking to purchase a holiday rental, so we are excited to be lending in this space,” she concludes.


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