Catalyst Property Finance targets £500m loan book

Catalyst Property Finance targets £500m loan book

Speaking to Specialist Lending Solutions, chief executive Chris Fairfax (pictured), said that within that £500m target it is setting its sights on non-construction bridging, ground-up development finance, construction bridging, and buy to let, at £100m to £150m each.

Fairfax said that buy to let is a vital component of this as it needs less origination.

“Short-term lending is hard work, you have to originate every 12 to 18 months because your loans, hopefully, have redeemed. Buy to let allows us to achieve some of our strategic goals,” he said.

The lender entered the buy-to-let space earlier this month, with rates starting from 3.74 per cent and up to 75 per cent LTV available, including those with cash-out.

Fairfax said that brokers and consumers they had spoken with said that they wanted “less restrictions on property”.

He pointed to several underserved areas, which include no exposure limits on multi-unit blocks (MUB), mixed use property, no restrictions on the number of bedrooms in houses in multiple occupation (HMO) and holiday lets.

Citing the typical market minimum at 125 per cent, Fairfax said that another opportunity would be less constrained by income variations, as its interest coverage ratio calculations are from 100 per cent of the pay rate.

He added that unlimited top-slicing was also available for high-net-worth individuals, and that the firm also has wide eligibility on adverse credit and different kinds of company structures.

“The feedback we’ve had from brokers so far is that there’s a place for it, but obviously they’d like it to be cheaper in terms of its interest rate. Ultimately, we have to find the right balance. We want to fund the right opportunities where it’s right for the borrower and right for us,” Fairfax said.

“We recognise our rates are higher, but we serve a market where there is a clear benefit in acquiring or refinancing because of either the yield or the capital.”

The firm issued £15m in agreements in principle on the first day that it launched its buy-to-let offering.

Fairfax continued that CPF currently has eight staff working on buy to let, who have been trained across bridging and buy-to-let too in case of a “big inflow of more kinds of business they can adapt.”

Catalyst is aiming to bring longer-term fixed buy-to-let products to the market, and is also considering green mortgage products.