Valuations update - 03/04/20
Firstly, to give you some sense of where we are in our negotiations with our funding partners, this table has been updated to show where they sit in terms of their likelihood of moving forward with SAVs.
|WON'T ACCEPT||UNLIKELY||POSSIBLE||LIKELY||WILL ACCEPT|
|FLEX CHOICE||MAXIMUM CHOICE
All plans (except Flexi) now progressing
The fantastic news we can give you today is that, joining Maximum Choice, we can now proceed with SAVs on Capital, Prime and Tailored plan options. We continue to have open and ongoing dialogue with the funder behind Flexi Choice and they remain in the ‘Possible’ category for the time being.
e.surv & fastpath – semi-automated valuations
We are exceptionally grateful to our valuation partner, e.surv, for their help in giving our funding partners the comfort and data insights they needed to progress with SAVs at such speed. We have produced a short sales aid that outlines the new process and what it means. You can download that here.
Restrictions, criteria changes and price movements
The following information summarises the position on each product line and where it is not possible to provide fuller details, we will signpost when we expect these will be available and emails will be sent separately covering these points in more detail:
- 10% retention on Lump Sum and Drawdown cases where the client wishes to release the full LTV. Retained element can be released subject to a physical valuation matching the SAV
- Flats, thatched roofs and properties with flat roofs over habitable areas are no longer accepted
- Price rise implemented as at 00:00:01 on 2nd April. Last application date for old rates is midnight on the 8th April
- Full details are available here
- We are hoping that there will be no retentions on the SuperLite and Lite options. There will likely be retentions on Capital Choice and Capital Choice Plus but this detail has yet to be confirmed with the funder
- Lending criteria changes to be confirmed
- A price rise was implemented as at 00:00:01 on 1st April. Last application date for old rates is midnight on the 8th April
- We are hoping that there will be no retentions or lending criteria changes being implemented at this time but this detail has yet to be confirmed with the funder
- 10% retention on Tailored Plus, Tailored Lite5 and Lite4 similar to Maximum Choice. No retention is currently planned for Tailored Lite3
TAILORED LITE AND TAILORED PLUS (MEDICALLY-ENHANCED LTVs)
- Minimum property value being raised to £100,000. Maximum property value now acceptable will be £1m within M25, £750,000 elsewhere
- Flats still acceptable subject to certain conditions
- There will be an additional Property Questionnaire for the client to complete and return along with photographs of the inside of the property
- No immediate change in pricing across the range but this will be kept under review and prices may change at relatively short notice.
Independent Legal Advice
You will have no doubt seen the latest news from the Equity Release Council that they are temporarily relaxing the standards relating to the need for face-to-face legal advice. Solicitors will be able to complete much of the conveyancing via the post and recorded phone/video calls.
The Council’s view is that face-to-face advice is and remains the ‘gold standard’ that the industry should work to and so, even in these difficult times, a face-to-face appointment (with the necessary social distancing safeguards) should be the preferred approach. If this is not possible, the use of video conferencing facilities that allow the solicitor to see the client is a suitable fall-back. Only if those routes are not possible should a ‘telephone only’ approach be used.
We will be releasing a guide to the legal process changes, with help and input from Equilaw, in the coming days to assist advisers when discussing this issue with their clients.
Price changes, lending criteria changes and other restrictions
You will appreciate that as the market adjusts this new environment, wider economic factors as well as the difficulties in accurately valuing properties mean that we are likely to see price rises and lending criteria restrictions across the entire marketplace. It would be wise to forewarn customers you are speaking to in the coming days and weeks that, while options are opening up as lenders like more2life find ways to deliver an end-to-end process, the ability to access the full range of options and rates normally available is likely to be restricted for the time being.