Financial Reporter spoke to Danielle Evans, our BDM about the importance of good packaging and who she would nominate in the WRAs.
FR: What area do you cover?
I cover the East Central area. My patch stretches as far north as Huddersfield, down as far as Milton Keynes and everything in the East Midlands.
FR: If you had one ‘top tip’ for life as a BDM, what would it be?
Keep plenty of spare change in the car for parking as not everywhere has functioning ‘pay by phone’ facilities. Also, spare tights in the winter for the ladies. I can guarantee you’ll get some ladders at some point!
FR: How do you pass the time on the road - books, podcasts, audiobooks?
I’ve recently learned how to keep up with technology and discovered that my hands-free can add reminders into my diary. If I’m not answering voicemails, I’m calling out to book meetings for the coming weeks.
FR: What’s one thing you wish all brokers knew?
Brokers know the score. We’re all working towards the same goal which is to get the case completed for the client. The importance of good packaging is the key message I’m delivering at the moment, as well as the importance of adding notes to the case. This means that underwriters are best equipped to make a decision quickly and we can achieve the end goal much sooner.
FR: A quick email on Monday or a phone call in the afternoons - how can brokers contact you?
Either way. I return calls directly through the mailbox so ideally calling from the number they want me to call back on means we can discuss the case more quickly. If you can’t get hold of me, our dedicated intermediary support team is on-hand to answer any questions you might have by calling 0800 116 4385.
FR: What’s your favourite place to stop for a coffee when you’re between meetings?
I am partial to Costa Coffee, but any place that does caffeine will do!
FR: Financial Reporter has recently launched its second Women’s Recognition Awards – who would you nominate and why?
Our head of key accounts, Liza Campion. She’s one of the most hardworking and intelligent women I’ve worked with and is constantly 100mph (not in the car of course!) She always goes out of her way to help everyone. Well worth the nomination!
In an interview with Bridging & Commercial, Dan talks about educating brokers and challenges in the bridging market.
You recently restructured your sales team. What are you responsible for in the new specialist distribution manager role?
As a lender, Precise Mortgages now has more BDMs in more areas of the country than ever before, which means brokers are never far away from the support they need to access a wide variety of products, including bridging finance.
My new role is working with our key account partners and educating them about our bridging proposition. My territory is London and the South East, including East Anglia, and I work with brokers in promoting how short-term lending can be a great solution to meeting their clients’ needs, both on a regulated and non-regulated basis.
I work closely with the key account team to identify opportunities, while also working with the BDM team to help them promote and provide education on bridging finance through their intermediary relationships.
Do you think the industry can do more to educate brokers on bridging finance?
We so often hear that lenders are London-centric and how bridging finance is focused mainly on London and the South East. However, bridging finance can help you wherever you are in the UK and I believe we can do more to make more brokers aware of this. Precise Mortgages’ team of BDMs works hard to spread this message by holding regular bridging finance workshops and training sessions in locations around the country.
What advice would you give to brokers who are new to the bridging finance market?
My advice to brokers regarding the bridging market would be to make sure you’re up to speed on the benefits of short-term finance. It’s a really flexible product and can be used in a wide variety of situations, whether that’s as a solution to a chain-break situation, as a way of quickly raising capital or obtaining the finance for a property that is not currently habitable. Take our refurbishment BTL offering, for example. Not only does it allow customers to access the short-term finance they need to refurbish a property and get it up to a lettable standard, it also gives them the peace of mind of an exit on to a long-term BTL mortgage once the work has been completed.
What do you expect will be the biggest challenge for the bridging market this year?
Most people talk about the economy being the biggest challenge, especially following Brexit. However, properties not selling and clients spotting new opportunities in the property market can drive more bridging finance business. With some rates now less than 0.5% per month, it could be a good time for clients to consider flexible short-term finance.
How did you get into the industry?
My first role in the mortgage industry was at Capital Home Loans (CHL), which I joined after completing my marketing degree. It was potluck to be honest; it was the first interview I went to and I thought it would do me good to get into finance in the long run. I joined CHL in 2006, pre-credit crunch, and what a different market it was then. I moved over to Fleet Mortgages in 2014, where I helped manage the marketing and telesales teams, before becoming a BDM. It was during that role that I learned a lot about the importance of face-to-face contact with intermediaries. I moved to Precise Mortgages in 2017 to expand my knowledge on the whole specialist market, and not just BTL.
If you didn’t work in finance, what would you be doing?
If I wasn’t working in finance, I would probably be a schoolteacher. I have two children and there’s nothing I enjoy more than encouraging and developing them. I’ll be coaching my six-year-old in his first team this year and I’m really looking forward to it. It will certainly be easier than when I used to coach/manage a men’s football team — organising and collecting the money off a group of 18- to 30-year-olds wasn’t easy!
Alan Cleary - Managing Director of Precise Mortgages
A plethora of regulatory and tax changes over recent years has seen the buy-to-let landscape shift dramatically.
Stamp duty land tax surcharge, phased reduction of mortgage interest tax relief and stricter underwriting standards, to name just a few. The list seems endless and landlords would be forgiven for thinking they’d drawn the short straw.
But landlords are an entrepreneurial bunch. While we’ve no doubt seen a number of landlords opt to exit the market, many of the more professional outfits have risen to the challenge presented to them, choosing to spread capital more evenly to bring down portfolio LTVs and minimise mortgage costs as well as considering where to find and how to create value in today’s buy-to-let market.
They’re seeking out more profitable properties to replace those that have been or are being sold. Semi-commercial, multi-lets and HMOs have seen a big uptick in popularity over the past couple of years.
Another area that continues to see increasing activity is landlords opting to purchase sub-standard properties at a lower market value and then adding capital value by completing refurbishment works, ultimately improving yields by attracting quality tenants to help maximise the rental income possible.
There are various ways to finance this approach, but bridging finance has proved very popular with landlords looking to expand their portfolios.
We spotted this trend around a year ago and, as a result, launched our own refurbishment buy-to-let proposition.
It works by combining a short-term bridging loan that rolls up interest while the refurbishment is undertaken. When the property is ready to let and meets the expected value, the customer exits on to a standard buy-to-let term mortgage — but the beauty of it from the borrower’s perspective (and the broker’s) is that there is no need to resubmit an application for the buy-to-let loan. The whole deal is underwritten at the outset. And given that it is two separate loans, the broker has the added bonus of a double procuration fee, too.
And with clever use of other earned disposable income to supplement affordability calculations, landlords now have even more flexibility on how and where they use their capital. We’ve recently extended our top slicing offering to cover our entire buy-to-let range, including our refurbishment buy-to-let proposition.
As a specialist lender, we have long understood the value of discovering and opening up niches. Supporting landlords and helping them as they reshape their portfolios is our ethos. If your customer is a landlord looking for a new way to maximise their rental yield and increase capital value, our refurbishment buy-to-let proposition could enable them to do so.
This was always a resilient sector, and it is likely to remain as such, and I firmly believe that the outlook for the buy-to-let market looks set to remain positive throughout 2019.
Alan Cleary - Managing Director of Precise Mortgages
The new Tenant Fees Bill which came into force on 1st June is certainly something your customers need to be aware of.
The bill has been introduced to protect tenants from the unexpected costs and hidden fees that can blindside them when they take out a new tenancy. Agents and landlords are now banned from charging fees for anything other than contract changes or termination when requested by a tenant; utilities, communications services and council tax; and issues for which the tenant is at fault, such as the replacement of lost keys. The new rules also involve capping deposits at five weeks’ rent for tenancies below £50,000 a year. Those found to be in breach of the new rules will face a fine of up to £5,000 for a first offence, with further breaches resulting in a fine of up to £30,000 and subject to a banning order.
Now don’t get me wrong. Anything which protects tenants from unscrupulous landlords is to be applauded. What does concern me, however, is the sheer weight of new legislation which has been introduced recently. The Tenant Fees Bill is just the latest in a long line of changes aimed at rebalancing the relationship between tenants and landlords and delivering a fairer, better quality and more affordable rental sector.
In the last 12 months or so, we’ve seen the launch of Minimum Energy Efficiency Standards which means that newly rented houses and those with renewed tenancies have to achieve an energy performance certificate rating of E or above. We’ve also seen the licensing rules for HMOs extended to any property rented to five or more people who form more than one household, regardless of the number of storeys, and minimum room size regulations being introduced.
Combine those with the government announcing it’s planning to get rid of Section 21 ‘no fault’ evictions and the ongoing phased reduction in mortgage interest tax relief, and you couldn’t blame landlords if they’re feeling a little overwhelmed. I read recently that there are around 120 pieces of legislation that landlords must adhere to. That’s a lot of information for anyone to keep on top of.
Brokers who have got their finger on the pulse can really make a difference to landlords who need help in navigating their way through the regulatory maze. This is where Precise Mortgages can help. It’s our view that brokers are fundamental not just to their customers’ success, but also to the success of the wider market. It’s why we place such importance and invest so many resources in making sure you have access to the support you need when placing complex or unusual cases.
We’ve expanded our sales team considerably in the last two years. It means wherever you’re based, one of our friendly and knowledgeable business development managers is never far away. In 2018 alone, our team supported 272 workshops, seminars and round-table events around the country to increase brokers’ understanding of specialist lending and, in particular, changes to the buy-to-let market. In addition, our office-based sales support team is on-hand to pick up your questions, ensuring you get the answer you need as quickly as possible.
So while new rules and regulations continue to keep coming thick and fast, it’s good for you to know that there’s support there if you’ve got a question about any of the changes or need a bit of help in placing a case.
Alan Cleary - Managing Director of Precise Mortgages
Imagine you’re approached by a customer who wants to purchase a buy-to-let but is struggling to find a lender who will give them the mortgage they want.
Despite having a monthly disposable income which could comfortably cover any void periods, the rental value of the property means they can’t achieve the loan size they need.
If you were presented with this situation, would you know where to go for a solution to your customer’s problem?
Fortunately, our top slicing option means that, providing a customer has sufficient disposable income (this can include earned disposable income, surplus portfolio rental income, or a combination of the two) and the rental income on the property they are looking to purchase meets a minimum 110% interest coverage ratio at pay rate, they can use the surplus income to demonstrate they can meet any rental shortfall.
Top slicing is available across our entire buy-to-let range including to limited company and personal ownership landlords, whether they are portfolio or non-portfolio (excluding first-time buyers, first-time landlords and repayment applications).
By taking a comprehensive view of customers’ circumstances, our top slicing proposition can provide landlords with greater flexibility around how they manage their portfolio. It can also provide improved access to two-year fixed rate mortgages when compared to underwriting which relies on the rental income of the property alone.
We’ve also made applying for top slicing easier by enhancing our DIP process. Brokers will no longer have to select top slicing as an option at the start of the process. Instead, the DIP will now automatically return the loan amounts available, both when using top slicing or just using rental income, for the products available to their customer. What’s more, if their customer is only using surplus rental income from their portfolio to demonstrate the required rental cover ratio, we won’t need to see any additional proof of income.
In addition, if brokers find after submitting an application using rental income only that their customers’ circumstances change, they will be able to switch on to top slicing post-submission without the need to rekey the application as long as top slicing was available initially.