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Let’s hope holiday lets rules don’t go wrong

The short-term lettings market in Scotland is about to undergo a major change in the way it is regulated and operated. New rules, which take effect from this month for new properties entering the market and from April 2023 for existing lets, require landlords to apply for planning permission to operate a holiday let. This permission must be applied for regardless of there being any guarantee of acceptance, which means that substantial fees and legal costs could be incurred without any certainty that the planning application will be accepted.

While many understand that the short-term lettings market has been allowed too much leeway in the way it operates in terms of appropriate safety regulations and the numbers of properties operating in certain areas these changes have the potential to bring the market to a sudden, grinding halt.

In places like Edinburgh and the Highlands, which have the greatest number of holiday lettings in Scotland, the impact will be considerable, this policy could pose substantial problems for local communities.

The risk is that, while reducing the number of holiday lets may produce more long-term residential lettings properties for the community, it will have an impact on the tourism sector which provides local jobs. Reducing the number of available holiday lets also has the potential to reduce the attractiveness of the capital and the Highlands as destinations thereby potentially reducing the number of people employed in the tourism and hospitality sectors. There may be more homes available to rent but there may be fewer jobs for people to do so regulatory changes such as this need to be approached with caution. Every action has a counter action, and the general rule of unforeseen circumstances dictates that you make major changes at your peril.

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There are already signs that holiday letting landlords are selling up or shifting their properties from the short-term market to long-term. These landlords say that the requirements for planning acceptance are not transparent enough. It is not clear what planning permission is being sought and the delays in processing applications (at least nine months in the Highlands) means that the next holiday season would need to be written off. Finally, the costs of submitting an application with no guarantee that it will comply with the rules and be accepted make continuing in the market untenable for many landlords.

The result will be a loss of many thousands of holiday homes into the long-term market or for sale on the open market. This potential increase in the number of properties in the private rented sector is to be welcome, particularly in cities like Edinburgh where demand is higher than anyone has ever experienced before. But if it is accompanied by a downturn in the tourist market next year then many of those people who may have found a home may subsequently be unable to find a job.

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The issue with these changes is the vagueness of the regulation and the rapidity of its introduction. No landlord is going to be able to afford to lose an entire season of holiday lets so the delay in processing these is a key issue in forcing these properties out of the market.

Equally, a planning permission measure which restricts properties without a main door entrance is clearly targeted at Edinburgh which, like most Scottish cities, is largely comprised of tenements. Given that one of the key issues last year during the Edinburgh Festival was the cost of accommodation it is unlikely this will be improved by dramatically decreasing the stock available.

As ever with legislative and regulatory changes there will be consequences for the market, and it is unlikely that these will occur in the way which the politicians expected. The issue, as ever, is supply and demand. If you restrict supply prices will rise, if you increase supply prices will fall. We shall see what happens next summer, but I think that record prices for holiday lettings will be the order of the day in Edinburgh and elsewhere.

By David Alexander

Source: Scotsman

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Accidental damage leaves hefty bill for holiday let landlords

One in nine holidaymakers say they have accidentally caused damage to a holiday home according to new research by Direct Line business insurance.

In one in five cases this damage cost £200 or more to repair.

The survey suggests that 25 per cent of people who cause damage do not admit this to the property owner. Of these, almost a third felt too embarrassed to own up, 29 per cent did not want to pay for the damage and over a fifth did not think the damage was significant enough to warrant saying anything.

Among these, younger guests aged between 18 to 34 years old are the group most likely to cause accidents in rental holiday homes with over-55s typically being the most careful.

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Many guests also admit to treating holiday homes differently to how they would their own, with 42 per cent saying they treat them with less respect. Some of the main reasons are pre-assuming that the landlord’s insurance policy will cover potential accidental damage, not taking financial responsibility for any of the damage caused or not wanting to worry about such issues while on holiday.

According to landlord claims data from Direct Line business insurance the priciest types of accidental damage in 2021 were carpets and flooring damage (costing over £940 on average); water damage (£1,340) and soft furnishings and fixtures (£940).

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Many households are opting for ‘staycations,’ with 28 per cent planning a stay in a rented holiday home in the UK in the coming year.

Over a quarter have attributed this to the increased cost of living restricting how much they can spend on travelling abroad and 23 per cent are remaining in the UK to save money. A third are doing so to avoid ongoing issues with airports and airlines such as losing luggage, flight cancellations, and long queues.

A Direct Line spokesperson says: “Most holiday homes are not covered by standard home insurance policies, so it’s important that landlords find a holiday home policy that suits what they need and consider adding on cover such as accidental damage, legal expenses or loss of rent, to help deal with the financial fall out of unforeseen issues.”

By `Graham Norwood

Source: Landlord Today

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Truss to announce stamp duty cut – report

UK housebuilders rallied on Wednesday following a report that Friday’s mini-budget could include a plan to cut stamp duty.

According to The Times, prime minister Liz Truss will announce the move in the mini-budget in an attempt to drive economic growth. It was understood the PM and chancellor Kwasi Kwarteng have been working on the plans for more than a month.

Truss believes that cutting stamp duty will encourage economic growth by allowing more people to move and enabling first-time buyers to get on the property ladder, The Times said.

It cited two Whitehall sources as saying that cuts to stamp duty were the “rabbit” in the mini-budget, which the government is billing as a “growth plan”.

Under the current system, no stamp duty is paid on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2%, £250,001 and £925,000 at 5%, £925,001 and £1.5m at 10% and anything above £1.5m at 12%. For first-time buyers the threshold at which stamp duty is paid is £300,000.

During the pandemic, then chancellor Rishi Sunak lifted the stamp duty threshold to £500,000.

At 0910 BST, Persimmon shares were up 5.4%, while Taylor Wimpey and Barratt were up 4% and Berkeley was 3.5% firmer. On the FTSE 250, Redrow was 5.6% higher, while Bellway and Crest Nicholson were up 3.6% and 3.4%, respectively.

Tom Bill, head of UK residential research at Knight Frank, said: “Nobody can accuse the new government of lacking an economic vision. If its low-tax approach extends to stamp duty, recent history tells us it will trigger higher levels of demand in the housing market at a time when mortgages are getting more expensive, which will support social mobility.

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“Prices could move higher in the short term if supply initially struggles to keep up but more balanced conditions will return provided the cut is immediate and permanent.”

Neil Wilson, chief market analyst at Markets.com, referred to the potential stamp duty cut as “the old Tory trick of juicing the housing market in its heartlands to boost confidence (wealth effect) whilst doing not a lot for housing supply”.

“I’m not for concreting over the green belt at all, but there will be questions about the economic soundness of this policy, as there always is. However, with interest rates rising so quickly, an offset to the cost of buying a home would grease the wheels of the market -without higher rates could cause the housing market to seize up.”

He added: “Clearly a stamp duty cut is good news for housebuilders who can expect higher selling prices as a result.”

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, argued that a stamp duty cut could do more harm than good.

“Buyers are unlikely to be unhappy at the prospect of a tax cut, but if the government chooses to cut Stamp Duty in an effort to stimulate the housing market, there’s a risk it could do more harm than good.

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“It’s easy to see why the government is concerned about the housing market. We’ve seen demand fall consistently since May, when rocketing bills, rising house prices and ever-increasing interest rates started to take a toll on buyer enthusiasm. There’s a risk that if rate rises accelerate, pressure on buyers could reach a tipping point, where demand dries up.

“We know from very recent experience that a Stamp Duty holiday can stimulate demand. However, the only reason these holidays work is because people feel they have a small window of opportunity to take advantage, otherwise they’ll miss out. The point at which they think they can just wait for the next one, they will start to become less effective.

“Even if it does stimulate demand, it overlooks the fact that the real brake on the property market is a severe shortage of supply. With an average of 36 properties on each agent’s books, we’re still close to an all-time low in the availability of property for sale. Driving demand without addressing supply would risk more buyers chasing a tiny number of properties, which would push prices up.

“By ramping up prices at a time of rising mortgage rates, the end result would be higher monthly mortgage costs, which would be increasingly unaffordable. And the Stamp Duty holiday wouldn’t help on this front. This in itself could be enough to put buyers off, and if it deters enough of them, it could end up having the opposite impact to the one that’s intended.”

By Michele Maatouk

Source: Sharecast

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North Wales climbs staycation league as people take short breaks to escape ‘gloom and doom’

A Travelodge survey ranked the region as the UK’s second most popular ‘rural’ destination for British holidaymakers in 2022.

The trend for short-stay trips in Britain is fuelling the popularity of North Wales as a staycation destination, according to a Travelodge study. With fewer people taking a traditional two-week holiday, regions close to big urban areas are attracting increasing numbers of visitors.

A survey of 2,000 holidaymakers by the hotel chain found that North Wales was the second most popular “rural” destination for Brits this summer, headed only by the Lake District in England. The findings reflected the pull of Snowdonia’s mountains but, for many, the region’s beaches were just as big a lure.

Travelodge’s latest Travel Index estimates 65% of Brits took their main holiday at home this year. Of these, 60% have so far taken three staycation breaks and may yet take another.

Around a third were families who usually take a main annual holiday but who instead took shorter UK breaks so that they could enjoy different experiences and locations. A quarter said they opted to take several UK short breaks as it “gave them something to look forward to against the gloom and doom of the global crisis”.

One big surprise in the survey was the appearance of Blackpool at the top of the list for “coastal” holidays – a position traditionally occupied by Cornwall and Devon. Taking second spot was Bridlington, Europe’s “lobster capital”, followed by Brighton.

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Travelodge spokesperson Shakila Ahmed believes the holiday trade is becoming more eclectic as people seek out different things to do closer to home. “More Britons are exploring hidden holiday gems that are on their doorstep than ever before,” he said.

“Record heatwaves this summer have also inspired Britons to take more spontaneous breaks to the great British countryside such as North Wales.”

For a third of Brits who opted for short breaks this year, they did so in order to catch up with family and friends. Almost as many saw short breaks as a way of keeping their children entertained during the summer school holidays.

As always, the weather was a big influence, with 29% of holidaymakers choosing to take spontaneous staycation breaks because of the summer heatwaves. Perhaps for the same reason, traditional seaside jaunts remained the nation’s favourite choice of holiday (35%) in 2022.

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Travelodge, which has 28 properties in Wales, estimates the UK staycation market was worth £30 billion in the year to date. So far 42% of Brits have been on holiday this year and feedback suggests this is one luxury they are unwilling to forego despite the current cost-of-living crisis.

Next year, this assertion will be sorely tested. Operators, hoteliers, B&B owners are fearing the worst with tourism expected to bear the brunt of household cutbacks. A fifth (21%) of Brits admitted it was just too expensive for them to holiday abroad this year.

Ironically it was the global financial crisis that helped underpin the domestic holiday sector this year. Travelodge’s latest Travel Index found 60% of those who choose not to travel abroad this summer, did so because of fears over airport chaos and flight delays. A further 28% of Britons holidayed at home because the weather here was considered superior to places like Dubai where temperatures are too oppressive.

Shakila Ahmed expects the trend for short breaks to continue. “With so many places to see and so little time and money, the traditional two-week holiday is on the decrease and a lot [of] shorter breaks, particularly in North Wales, are on the increase,” she said.

By Andrew Forgrave

Source: Daily Post

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Holiday let mortgage enquiries remain strong post-pandemic

The holiday let mortgage market has remained popular with investors since the easing of Covid-19 lockdown restrictions, according to a new poll conducted by Hampshire Trust Bank.

Over half (55%) of broker respondents said they had written a holiday let case over the past 12 months.

84% of respondents said they had received more holiday let enquiries since the onset of the pandemic in 2020 and 48% had even seen more enquiries since restrictions were lifted earlier in the year.

In addition, brokers were asked what the most popular regions in the UK for holiday let enquiries were over the past 12 months. For 54% or respondents, the South West of England was the most popular location, followed by Cumbria and the Lake District (26%), the South Coast (23%) and East Anglia (14%).

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Louisa Sedgwick, managing director of specialist mortgages at Hampshire Trust Bank, commented:

“These findings show there is still significant demand for holiday let mortgages. The staycation boom we witnessed during the pandemic shows little sign of abating in the short-term.

“The fact that almost half of brokers taking part in the webinar have seen an increase in enquires since Covid restrictions were lifted clearly indicates the strength of demand for holiday let mortgages in the UK.”

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By ROZI JONES

Source: Financial Reporter

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Continued appetite for staycations offers boost to holiday let

Buy-to-let investors are always keen to look for new opportunities, and over the last few years there have been few bigger opportunities that the boom in the holiday let arena.

We polled brokers recently to get a better insight into their own experience of the holiday let market, and it’s clear that the last couple of years have been a period of significant growth for this sector.

More than half (55%) of intermediaries said they had written a holiday let case over the past 12 months, while more than 84%said they had seen an uptick in holiday let enquiries since the start of the pandemic.

What’s more, almost half (48%) saw a jump in enquiries since restrictions had been lifted.

It would be easy to assume that this interest is solely down to the pandemic. With overseas travel all but impossible, it was understandable that there was then a sharp rise in interest in staycations. People need to take a holiday, after all.

Little wonder then that investors recognised the increased interest, and took advantage by adding holiday lets to their portfolio.

However, that train of thought would suggest that the staycation trend has passed. After all, now that we can holiday abroad once more, will there still be the demand for short-term lets?

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Demand for domestic holidays

The reality is rather different, however, with a host of studies revealing that the appetite among Brits to have at least one holiday on domestic shores remains strong.

For example, the latest study from VisitBritain found 59% of Brits plan to take at least an overnight trip domestically over the next 12 months, compared to 44% who are going to head overseas at some point.

Notably, one in three intend to take more UK trips in the next 12 months than the preceding year.

That’s a pretty strong statement that interest in domestic trips may have been given a helping hand by the pandemic, but that demand is far from dwindling.

Throw in the fact that improved international travel means greater numbers of visitors from abroad heading for our shores, providing more potential tenants for short-term lets, and it’s perhaps not surprising that landlords remain keen on investing in these properties.

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The role of brokers

Mortgage intermediaries are crucial allies for all property investors, irrespective of what form of property they are looking to put their money into.

As a result, brokers will inevitably be hearing from clients in the months ahead who are interested in the holiday let market and how to go about finding finance.

This represents a terrific opportunity for brokers. Holiday let may have traditionally been seen as something of a niche area of the market, a specialist segment which they may have overlooked – not anymore, so it’s crucial brokers get to grips with the subtle ways in which holiday let products differ from traditional buy-to-let deals so that they can help those clients secure the funds they need to add to their portfolios.

Flexibility from lenders

Lenders have a big role to play here. Firstly, across the board we need to do a far better job in educating brokers, helping them understand the intricacies of these holiday let products and how they can support clients in a range of different circumstances.

But we also need to do a better job in highlighting the decision-making process. At HTB for example we put our trust in our manual underwriting process; there’s no relying on automated decisions, which risk unfairly excluding clients who could make a great success of holiday let investments.

Instead, flexible lenders are able to get to grips with the facts about each and every case, nail down the crucial details so that they are able to provide a more informed decision.

The holiday let market has already grown substantially and looks set to play a more important role in the future. It’s therefore vital for brokers to make the most of this opportunity, and for lenders to support them in doing so.

Source: Financial Reporter

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Lancashire holiday park launches new activities thanks to £3.5m investment

Bosses at a Lancashire holiday park have been celebrating the launch of their new high adrenaline activities following a massive £3.5million investment.

The activities, which include freefalling experience, “The Jump”, as well new climbing walls, golf course and segways, were unveiled at Haven’s Marton Mere Holiday Park near Blackpool earlier this week.

Olympic gold medallist Will Satch MBE helped reveal the new additions to the holiday park, which, thanks to a £3.5million investment and work over the winter months, also includes indoor and outdoor facilities as well as new accommodation.

Ahead of what’s expected to be another busy summer, the demand for fun and exciting outdoor activities is higher than ever, and The Jump, which was first introduced to Haven’s Craig Tara park in South Ayrshire, Scotland, in 2019, offers guests a thrill-seeking experience by freefalling from two different height platforms onto a massive airbag.

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Officially launched on Monday in front a crowd of eagle-eyed spectators, Team GB athlete Will was in high spirts as he tried out all the new activities.

The rower, who won a bronze medal at London 2012 before claiming gold at Rio 2016, is no stranger to competitive challenges, and said: “I’m such a big fan of adrenaline filled experiences so for me, even on a holiday I want to be active.

“There is so much to do and even as an adult these activities are tons of fun, so I can definitely see why children are eager to try it this summer.”

Despite Will being a highly decorated rower, you don’t have to be an Olympian to get involved in the new activities at the holiday park.

Guests can get on two wheels and explore on segways or bikes, or grab a greater view of the park from the climbing wall.

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General Manager at Marton Mere, Keith Robson, said: “It was amazing to see so many people supporting the launch of our new activities today.

“We’re very happy to be able to bring these fun and exciting additions to the park and we can’t wait to see our guests enjoying them throughout the summer.”

In addition to the new activities, Marton Mere has invested in other areas, with more than 70 new pitches for holiday homes and a whole new location on the park site in Lakemere View near the Marton Mere nature reserve.

There is also a new Burger King as well as new outdoor dining areas providing plenty of space for guests to enjoy the park.

The investments have led to an additional 35 new job roles too, which provided a huge boost to the local area.

By Amy Farnworth

Source: Lancashire Telegraph

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What you need to know before putting your home up as a holiday let

Thousands of Brits are exploring the idea of letting out their homes to holidaymakers or festival-goers this summer but don’t know how to do it. There are legal and tax obligations to be aware of, while other factors such as home insurance, cleanliness and practicalities also need to be considered.

Alok Alstrom, CEO of leading gig economy platform AppJobs, said: “Putting your home to work is often a good way to earn some extra cash, but it’s important to know how to do it safely and legally. For example, the extra income is considered taxable and it is advised to factor this into your finances and potential profit margins.

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“Meanwhile, it’s not as simple as just letting someone sleep in your spare room. There are certain standards of cleanliness, privacy and convenience that it’s recommended you adhere to. There is also a risk that things might not turn out as well as you had expected, such as a guest causing damage to your home or overstepping the boundaries.

“Make sure you know exactly what you are letting yourself in for and be confident that you are making the right decision.”

Different laws in different cities

Greater London applies a planning restriction where it is often considered a change of use if you rent out a home, and as such entire home listings in London are limited to 90 days per year unless you have the planning permission to host more frequently.

Planning permission may also be needed in Glasgow and Edinburgh, while Northern Ireland requires a licence from Tourism NI.

Some individual buildings, such as high-rise apartment complexes, can have strict rules and regulations against sublets.

Be careful to check the small print of your lease or contract to make sure you don’t fall foul of your neighbours.

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Mortgage and home insurance restrictions

Some mortgages won’t allow subletting, so it’s important to clear it with your mortgage provider to make sure it does not invalidate your policy.

The same goes for home insurance as you might need specific cover. Airbnb has a product called AirCover for Hosts that includes host damage protection and liability insurance.

Safety and emergency contacts

It’s advisable to make sure your guest is aware of what to do in an emergency, such as a fire or break-in, and who to contact. Also make sure they know where the medical supplies are should they be needed.

It’s good to flag any issues with the property that they might need to know, such as a window that doesn’t open or a plug socket that isn’t safe to use.

Being a good neighbour

Some big apartment complexes will have rules on how shared amenities such as gyms, swimming pools and rubbish disposals are used.

Make sure you communicate these rules to your guests to make sure you avoid any conflict.

By Neil Shaw

Source: Kent Live

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Research reveals 39% of us don’t check doors are locked before going on holiday

A new study has revealed that more than a third of people don’t check that all of their doors are locked before going on holiday.

Research from Aviva has shown that only 61 percent – or three-fifths – of people check all doors when they go away, and only 58 percent check that windows are closed.

Other safety checks come even further behind, with 57 percent of holidaymakers admitting that they don’t check that sheds and garages are secure, and 81 percent leaving garden furniture out.

As well as this, nine percent of people hide keys under doormats or plant pots, despite the fact that 14 percent of the people surveyed had experienced their home being burgled in the past.

Aviva reports that claims for UK home thefts are 48 percent higher in July to September compared to the rest of the year, with claims averaging a value of £6,000.

The company has offered up its best advice for those planning to go away on holiday this year.

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Don’t forget to lock up

Aviva research finds that two-fifths of people don’t check that their doors or windows are locked before they go on holiday.

Don’t advertise your holiday on social media

Before you travel and while you’re away, be mindful that countdown trackers and holiday snaps will let others know you’re not at home.

Leave a key with a trusted neighbour, friend or family member

But give the key to the person to look after – don’t leave under a plant pot or doormat where anyone could find it. Ask your trusted person to check for other internal issues such as water leaks, as well as signs of unwanted guests.

Make your home seem occupied while away

Use timers to switch on lamps and radios to give the impression of someone being at home.

Ask a neighbour to park on your driveway

Again, this suggests that someone is living at the property.

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Consider investing in a burglar alarm and security lighting

Both are practical ways to protect your home and can act as a deterrent to burglars.

Mow lawns and trim hedges before you go

An overgrown garden is a giveaway that residents may have gone away.

Lock ladders and tools away

Some burglars will have their own toolkits, but others are more opportunistic, so make sure sheds and outbuildings are locked.

Keep your valuables out of sight

Where possible, keep valuables away from windows. Similarly, don’t store valuables in the bedroom. Thieves know that’s where most people keep their precious items, so hide them in different spots around the home.

Kelly Whittington, Property Claims Director for Aviva UK, commented: “So many people have postponed their breaks because of the pandemic, so summer 2022 is a fantastic time for holidays. But we’d urge people not to get so excited that they forget to carry out checks and leave their homes vulnerable while they’re away.

“A few simple steps can help to deter burglars and keep homes secure – so people aren’t returning to a post-holiday headache.”

By Chloe Shakesby

Source: Farnham Herald

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Hodge returns to residential loans market

Hodge has reentered the residential mortgage market for its 50-plus, retirement interest-only and holiday let mortgages, after a short break from new business.

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The bank says that after experiencing “record volumes of business” it had “made the call to close to new applications for a two-week period to restore its levels of service”.

But now says that from today, 4 July, “new applications for all products are now open again, with service level agreements back to 48 hours with other service guarantees to intermediary partners available again too”.

Hodge mortgages business development director Emma Graham says: “We pride ourselves on both our service and the fact that our underwriters assess applications on a case-by-case basis.

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“We remain fully committed to maintaining a personal approach but will continue to invest in technology to provide additional levels of automation while ensuring we’re able to offer the services our brokers have come to expect.”

The bank, which runs a savings department, says that products available through its commercial lending division remain unaffected, with this announcement only relating to personal mortgage loans.

Last month, Hodge appointed Stuart Benge as senior business development manager for commercial lending.

Benge joins Hodge with more than 25 years of finance sector experience, having previously worked with N&P Commercial and Assetz Capital, among others.

In his new role, he will be responsible for expanding Hodge’s presence in the investment property sector on a national scale.

By Roger Baird

Source: Mortgage Finance Gazette