Justanupdate
Monday22ndJuly Thisweek'sheadlines:
Royal London Update
We are pleased to confirm that the work in OWS to enable Royal London products to be sold for personal protection has been released on Wednesday 17th July. This will include:
A change to reflect that a nomination of beneficiary can be used for Royal London products. A new TPD option for Living Tasks. If Royal London cannot offer a TPD Own Occupation definition, because of the risk of the occupation, they will vary the quote to show either the Working Tasks or Living Tasks definition so now wording will pull through into the SR.
There still remains an issue with Royal London’s illustrations separating out the plan charge which causes a mismatch for imported quotes between the total plan premium and the individual cover amounts:
Royal London also show waiver of premium as a separate and distinct cover, both when it is added as an option to a life benefit and for income protection quotes:
The workaround solution until a fix for this is deployed is as follows:
1) Do NOT import the quotation from Solution Builder into OWS
2) Download the quote and supporting documents using the “Get Supporting Documents” button in Solution Builder which will download the individual illustration and comparison report in a file on your laptop/PC
3) Add a MANUAL QUOTE in the normal way but be sure to add the premium costs for any waiver AND the plan charge of £2.60 to the individual benefit that has the HIGHEST PREMIUM. This will allow you to proceed with the recommendation Openwork are working hard with Royal London and iPipeline, but the above process will allow you to process Royal London business in the meantime.
Hodge align criteria
Hodge have aligned the enhanced criteria of their Professionals Mortgage to the 50+ and RIO:
• Bonus/Overtime/Commission. Max of 100% subject to history/stability
• Investment/notional income. Allowing withdrawal of investment income outside of retirement income. We’ll take 75% of the investment pot divided by the mortgage term. This only impacts pre retirement income as we already take as a retirement income.
• Day 1 Fixed Term Contractor. Subject to previous experience in the industry.
• Day Rate Contractors.
• Number of weeks moving from 46 to 48 weeks
• No minimum income required
• Max gaps moving from 6 weeks to 3 months (subject to explanation on gaps as gaps+weeks should equal 52)
• Current contract. 3 months remaining or confirmed renewal or something that gives good confidence it will be renewed
• Can consider multiple contracts subject to experience
• Day 1 Day Rate Contractors. Subject to:
• Evidence of previous employment in the industry
• 3 moths on contract remaining or confirmed renewal or something that gives good confidence it will be renewed
• Min income £50k
• Assessed on one contract only
· Self Employed:
· 1 year accounts accepted if < 2 years trading plus accountants projection and latest 3 months bank statements
· 2 years trading, generally take the latest trading year. Subject to:
· If income is higher in the latest year, the magnitude of the increase from latest to previous year will be considered and we may ask for evidence it’s sustainable.
· If income in latest year is lower, we’ll ask for explanation from accountant and confirmation the trend is not continuing. Projection for current year must show stable or higher income.
· Retained Profit. Subject to 2 years accounts. Taken as the growth in the retained profit.
· Income from Multiple limited companies
Resilient HMOs in the UK property market
Amid the ongoing housing shortage, there is sustained demand for wellmaintained and properly managed Houses in Multiple Occupation (HMOs). Our recent survey of landlords reveals continued confidence in this type of property, with some expanding their portfolios and treating HMO management as a full-time career. The hotspots for our HMO landlords are London and the South East, followed by the East Midlands.
Managing HMOs comes with its challenges. However, 30% of the landlords surveyed owned an HMO property or portfolio. Of these, 72% owned their HMO properties through a limited company. Half of these landlords relied solely on their property income without having another job.
Self-managing landlords need to be cautious. There are many pitfalls for the unwary, and having a thorough understanding of the local market is crucial. Prospective investors must do their homework. Some councils, eager to control HMO supply, are introducing additional licensing schemes for smaller HMOs (defined as properties where at least three unrelated tenants live together). Large HMOs, defined as houses occupied by five or more unrelated people, always require a licence unless an exemption is granted, regardless of location. However, these additional schemes often target specific parts of a town or city.
Councils can also regulate HMO stock through an Article 4 Direction. While planning permission is always needed to convert a single dwelling into a seven-plus-bed HMO, it is usually not required for HMOs accommodating up to six people. However, Article 4 Direction removes these permitted development rights in certain areas. This means that potential HMO landlords in these locations must also apply for planning permission for smaller HMOs. Approvals are only given if the accommodation meets high standards.
Landlords might face tests such as the 'sandwich' test, where permission is usually denied if creating a new HMO would result in an existing residential property being flanked by HMOs on both sides. When permission is granted, the property might also need licensing, even if it houses fewer than five occupants.
Regularly checking for the application of Article 4 Directions is essential due diligence for prospective HMO landlords. This includes monitoring council plans to implement or amend these directions. Following recent local elections, we may see more councils introducing licensing regimes and Article 4 Directions, and we will keep a close watch on these developments.
Despite the complexities of managing a portfolio, our survey found that nearly half of the properties were self-managed by landlords. Among these, a third owned portfolios with over 20 properties. Only 19% of HMO landlords used property management companies, while a quarter employed estate agents.
The preference for a DIY approach is likely linked to the popularity of smaller HMO portfolios. The most common portfolio size was between 4 and 10 properties, accounting for 34% of the total. Portfolios of 20 or more properties made up 31%, while those with 11-20 properties comprised 22%.
Other positive news in the sector includes decreasing utility bills, which lead to higher net rentals and make it easier to borrow significantly against the property's value. Additionally, council tax banding for individual rooms in shared houses has been reversed, meaning HMOs will once again be classed as single dwellings.
As our survey indicates, the HMO sector remains resilient and has many positive aspects. It will be interesting to see how the Labour government addresses this market, if at all. However, as long as investors conduct thorough research before committing, HMOs can yield excellent returns.
Explore our full range of HMO products here.
Vida Homeloans launches Openwork Exclusive
Vida Homeloans is launching a new Buy to Let product for purchase and remortgage that’s exclusively available to The Openwork Partnership. It goes live on Wednesday 10 July 2024. It’s a 5 year fixed rate for clients with a ‘Vida 36’ credit profile.
Highlights:
• Available on Vida credit tier 36
• Up to 75% LTV
• Available to First Time Landlords
• Up to 4 applicants
• Ex Public Sector houses and New Build properties
• Premises above or adjacent to commercial considered
• Limited Company SPV
• All defaults and CCJs are ignored under £250
There’s a non-refundable £195 assessment fee payable on all applications and standard valuation fees apply. The maximum loan is £1m and the ERCs are 5%, 5%, 4%, 3%, 2%.
The Vida credit tier 36 is as follows:
Vida 36 Credit profile Months
Months since last
EXCLUSIVE FREE access to LV= Doctor Services!
We are delighted to confirm that as a member of Just Mortgages you now have exclusive FREE access to LV= Doctor Services (provided by Square Health).
LV are excited to be offering this to all Just Mortgages advisers until 31 December 2024!
This is a great way to learn more about the support that’s offered and speak to your clients more effectively about these value-added services that are included alongside all LV= protection policies.
How to start using the app:
1.Simply download the LV= Doctor Services app on your smartphone device (available on all app stores)
2.Register for an account using your email address. You’ll be asked to fill in some details.
3.When prompted enter the pin LV2018
4.That’s it, you’re all set up
As a reminder, LV= Doctor Services provides you with six expert medical services all via the smartphone app or by phone call, including:
1. Unlimited, 24/7 remote GP appointments
2. Prescription services
3. Second opinion
4. Remote physiotherapy (capped at 5 appointments per year)
5. Remote mental health support (capped at 5 appointments per year)
6. Discounted health MOTs
More information here
Like our policyholders, your spouse/partner* and children under 16 (selected services) can also benefit from this support. You can also use these services while abroad on holiday This is all confidential and none
REMINDER: Zurich Accelerate
What is Zurich Accelerate?
Zurich Accelerate provides access to experts from around the world to offer a package of medical care services for cancer, heart and neurological conditions. It gives your client more choice than standard medical care in the UK, with fast access to consultations, diagnostics, and second medical opinions. It can also help your client access the latest precision cancer medicine and clinical trials; as well as treatment abroad at some of the leading hospitals in the world.
What services does Accelerate offer?
Accelerate is comprised of six individual services. Your client can use as many or as few as they like and can access these at any point. They don’t have to follow a linear path and they can choose to combine Accelerate with services offered by public healthcare or their current healthcare provider if they want to.
Accelerate is a complementary service to both public and private healthcare and is not intended to replace either. It gives your clients an alternative route and should be taken up in consultation with their GP. It’s all about giving them choice and offering them greater control over their healthcare decisions.
Watch this explainer video HERE to see why Zurich Accelerate is so important.
Click HERE for the link to the dedicated Accelerate page via the Zurich for Intermediary website.
Vitality –
Claims & Benefits Report
The Vitality approach to protection is moving life insurance forward. By helping people live longer and offering behaviour-based premiums, they are delivering high levels of immediate value and benefits that respond to the needs of modern consumers.
Helping members live longer and healthier lives
Vitality knows it takes a sustained combination of nudges and incentives to create sustained behaviour change, which is why they give all members access to the Vitality Programme.
This programme is designed to drive engagement and encourage positive lifestyle choices, with the aim of improving members' health. In fact, engaged members improve their mortality risk by up to 49%, increasing their life expectancy by up to 4.8 years*.
In 2023, Vitality members:
• Took 992 billion steps
• Participated in 1.4 million mindfulness sessions
• Completed 600,000 Health Reviews
In return for reducing their risk, Vitality returned £82 million to its members through rewards from Vitality partners.
* Life expectancy based on members earning 21+ activity points per week throughout their lifetime.
Delivering enhanced value through behaviourbased premiums
The idea behind Optimiser is simple. Clients can enjoy the benefit of a lifetime of healthy choices upfront through the best available premium. With Optimiser, all members need to do to keep their premium low is engage in healthy lifestyle choices through the Vitality Programme.
In 2023, Vitality members saved £43 million with Optimiser. Additionally, members with an Optimised plan are three times more likely to engage with Vitality and up to 46% less likely to cancel their plan compared to those with a non-optimised Vitality plan. This benefits both you as an adviser and your clients.
Responding to the needs of modern consumers
Vitality market-leading cover has been designed to meet the changing needs of today’s consumer and deliver value to them from the get-go.
In 2023 they paid out 94.6% of all claims, amounting to £117 million. This included:
£83.5 million in Life Cover claims paid
£32.7 million in Serious Illness Cover claims paid:
• 1 in 6 claims would not be covered by core critical illness plans
• 1 in 13 claims paid were on plans that had already made a claim previously
£1 million in Income Protection Cover claims paid
Click here to find out more about Vitality's latest Claims and Benefits Report.
Royal London – Income Protection Webinar
Join Royal London on 25th July for a webinar all about income protection and the important role it plays in helping clients maintain their lifestyle if they’re unable to work due to illness or injury.
Shelley Read and Gregor Sked will look in more detail at the income protection gap and findings from a 2023 Royal London commissioned report which found only 2 in 10 mortgaged homeowners have an income protection (IP) policy while just 6% of renters have IP.
During the presentation they’ll share some top tips and technical insight to help you feel more confident positioning and writing income protection with clients. They’ll also be demystifying some of the most common myths relating to income protection.
By the end of the webinar, you'll be able to:
• Have a better understanding of how income protection really works from application to claim and beyond.
• Explain some of the key considerations to have when arranging income protection for employed and self-employed clients.
• Identify opportunities within your client bank to discuss income protection. Register now.