Sustainable thinking leads green change
Ivan GuerreiroHead of lending, Newcastle Intermediaries
Cop26 ended with countless pledges and initiatives promising to deliver the green change we need to preserve our world.
In terms of housing, green initiatives have been harder to get off the ground. Recent times are littered with schemes that have either failed or not taken off. From the Green Deal to subsidies for heat pumps, efforts so far have been criticised for lack of take-up or not being ambitious.
Collaboration and commitment will be key
The issue for lenders is not straightforward. We are not experts in heating and insulation, nor will we attempt to become one.
We have already seen the chaos of poorly thought-through campaigns to insulate homes where wet cavity insulation has rotted timber-frame housing.
Equally, while many of our customers are engaged with the green agenda, they may not readily welcome our opinions on how they should be part of it or, for that matter, how and when they should decarbonise their homes.
Green lending is an easy thing to champion and a much harder thing to deliver
It is a complex subject and properties, like people, are never the same. Customers should not be penalised for not having the funds to own greener properties.
But what we can do is help them make informed decisions. The push from authorities, both political and economic, to understand the physical and transitional risks in our business means we will learn things about our lending that we can share with consumers.
These facts in turn will enable them to make informed and better decisions for their own properties and circumstances.
Moving parts
Green lending is an easy thing to champion and a much harder thing to deliver when you look at the many moving parts in the housing value chain.
Let’s help consumers to make informed decisions for their properties and circumstances
But that is not a reason to not start the evolution of better practices in homebuilding, financing and ownership, for which collaboration and commitment will be key.
We are consulting with our members, partners and regulators to ensure we get off on the right foot and build an environment where borrowers can access reliable expertise, when and how they need it.
Big ideas for large-loan borrowers
Michelle AshNational account manager, Newcastle Intermediaries
In early November, much to the surprise of many, interest rates remained at a record low of 0.1%. The Bank of England voted to maintain the current rate and the margin of agreement suggests it’s unlikely to change its mind this side of the New Year.
Although many lenders repriced products in readiness for an increase they believed was inevitable, there are still some very attractive products out there — not least for those wishing to borrow large amounts. These borrowers, like many others, are in a good position to make the most of this temporary reprieve to the expected rising cost of borrowing.
We understand the unique needs of these clients
Affordability issues still affect many homeowners and movers due to resilient house prices that continue to resist any real downward pressure. This in part is due to the ongoing lack of supply of new and current stock.
Special range
At Newcastle Intermediaries, a key pillar of our purpose is to help people own their own homes. Borrowers requiring large loans are no exception and so we have launched an offering to help those who find themselves requiring larger finance. We have competitive loan-to-values and good income multiples, and we can accommodate 100% of all income.
We are committed to helping high-earning borrowers
We have a range that addresses the major issues facing so many large-loan borrowers. We are offering up to 5.25 times income multiples on loans of £2m at the underwriter’s discretion, and LTVs of 80% up to £1m.
These new loans are available on interest-only and capital repayment, which makes a huge difference to affordability while acknowledging the importance of using and proving the value of bonus or commission income for high earners.
Complex income is a hurdle for all kinds of borrower in an economy where customers often earn their livelihood from many dissimilar sources.
Affordability issues still affect many homeowners and movers
Additional income can be particularly tricky but, through our large-loan proposition, we now take up to 100% of frequent (monthly and ‘on payslip’) overtime, bonus and commission. If the additional payments are less frequent, the borrower will need a two-year record (evidenced by their P60s), and have gross income exceeding £100,000, to consider using 100% of this income.
Brokers also have direct access to senior underwriters to discuss individual cases from enquiry to offer stage.
Our large-loan proposition is a key part of our intermediary offering and we are committed to helping high-earning borrowers. By understanding the unique needs of these types of client, we provide competitive products, a tailored lending approach and direct access to our underwriters.
