All the winners of the British Specialist Lending Awards 2020
As part of a unique online setting, winners were announced in 22 categories spanning the breadth of the industry.
Here they are, congratulations to everyone.
Rising Star – Distributor sponsored by Precise Mortgages
Kimberley Gates, Sirius Property Finance
Complex Buy-to-Let sponsored by Paragon
Abbie Gaul, Impact Specialist Finance
Commercial Finance sponsored by InterBay Commercial
Kim McGinley, Vibe Finance
Second Charge sponsored by West One Loans
Kieran Jenner, Positive Lending
Bridging and Short-Term Finance sponsored by Roma Finance
Phil Mabb, Bridge Development Property Finance
Complex Credit sponsored by Vida Homeloans
Michelle Leyland, Adverse Money
Rising Star – Product Provider sponsored by Vantage Finance
Mia House, HTB
Underwriter sponsored by Criteria Hub
Anthony Lomax, Aldermore
Business Development sponsored by Virtus Search
Stewart Green, Vida Homeloans
Head of Sales sponsored by 3mc
Jamie Pritchard, Precise Mortgages
Head of National Accounts sponsored by Uinsure
Liza Campion, Precise Mortgages
Specialist Distribution sponsored by Saffron for Intermediaries
Stephanie Charman, Sesame Bankhall Group
Surveyor sponsored by Mortgage Brain
Joe Arnold, Arnold & Baldwin
Conveyancer sponsored by Rostrum
Peter Joseph, The Moving Hub
Bridging Lender sponsored by Specialist Lending Solutions
Scott Marshall, Roma Finance
Commercial Finance Lender sponsored by Connect for Intermediaries
Mark Parrett, InterBay Commercial
Complex Buy-to-Let Lender sponsored by TBMC
Adrian Moloney, OneSavings Bank
Second Charge Lender sponsored by Brightstar Financial
Buster Tolfree, United Trust Bank
Complex Credit Lender sponsored by One Mortgage System
Louisa Sedgwick, Vida Homeloans
Administrator sponsored by Pepper Money
Fran Bradshaw, The Buy to Let Broker
Development & Innovation Advocate sponsored by The Mortgage Lender
Ying Tan, Dynamo
Outstanding Contribution sponsored by Zephyr Homeloans
Bridging and buy-to-let excluded from FCA interest-only forbearance guidance
The guidance allows borrowers with interest‑only and part‑and‑part mortgages which have matured recently or are set to mature soon to delay paying off the capital sum and continue servicing the interest providing they are up-to-date.
Following requests from lenders, bridging deals will be excluded from the arrangements, as will unregulated buy-to-let and those classified under the Mortgage Credit Directive Article 3(1)(b).
“We agree that we should exclude bridging loans due to their short‑term nature and higher interest rates. It is unlikely to be in a borrower’s best interest to continue to pay interest for an extended period,” the FCA said.
“We confirm, however, that high net worth consumers remain within the scope of this guidance as they may be at risk of harm if current market conditions affect their ability to realise their repayment strategy.
“We can confirm the guidance only applies to regulated mortgage contracts, and not unregulated buy‑to‑let mortgages or MCD Article 3(1)(b) loans,” it added.
Interest rate change
The FCA also made a change to allow firms to charge borrowers the interest rate applicable under the existing contract.
The temporary guidance comes into force on 31 October 2020, and applies to eligible borrowers whose loans have matured between 20 March 2020 and will be maturing until 31 October 2021.
Lenders which have contacted eligible borrowers before this guidance comes into force, and agreed that they can delay repayment of their mortgage, do not need to contact them again under this guidance, provided borrowers were given the option to delay the repayment until 31 October 2021.
If the borrower chose not to make use of an extension of up to 31 October 2021 or longer then there is no expectation on the firm to contact them again to make them aware of this guidance.
Auction Funding and Aspen combine on four-day bridge to dodge default charges
Aspen provided a £422,000 loan at 75 per cent loan to value (LTV) on a multi-unit freehold block (MUFB) comprising of four studio flats in Wembley, London all with separate assured shorthold tenancy (AST) agreements.
The case was introduced by Raj Dahli, director at Auction Funding, an appointed representative of Connect Mortgages, and handled by Aspen’s senior underwriter Prabhat Talwar.
A fully costed illustration was issued in 15 minutes and a decision in principle was provided in one hour.
As the case was introduced on a Sunday, Aspen undertook a desktop valuation before someone was sent to visit the property the next day to collect data on the measurements and take photographs for the valuer.
Legals were handled by Leigh Haigh at Fieldfisher LLP and an offer was issued.
The bridge was completed on Aspen’s stepped rate product which has a rate of 0.49 per cent per month for the first half of the 10-month term.
Talwar said: “Bridging is all about speed, so when a broker and their client require an immediate solution to a financial matter it is our duty to deliver the resolution, no matter how short the timeframe.
“This is yet another example of our flexibility and willingness to get deals done.”
Dhali added: “We work together well with Aspen and when speed matters their proactive underwriters stepped up to the task and took this case from application on a Sunday to valuation on a Monday and completion on Wednesday.”
Glenhawk enters regulated bridging following JP Morgan funding
The lender is offering deals at up to 65 per cent loan to value (LTV) on loans between £100,000 and £1.5m.
The term length is 12 months with an interest rate from 0.55 per cent a month, and there are no admin or exit fees for the deal.
The lender has formed a dedicated team focused on the new product, headed up by its director of lending, Nick Hilton.
The launch follows Glenhawk securing funding from JP Morgan earlier this year, with more new products set to follow.
Guy Harrington, chief executive of Glenhawk, (pictured) said: “Having experienced an exponential growth in enquires for a regulated product, this launch is the culmination of nearly 18 months of hard work, which started with FCA regulation, and is a significant milestone for the business.
“The UK homeowner loan market has been one of the more resilient since the outbreak of Covid-19, underpinned by government stimulus and changing consumer trends.
“It is also hugely underserved and we are confident our market differentiating ethos of fairness and transparency will be particularly appealing.”
Harrington added the lender expected strong demand and would be launching other products in the future.
Hilton added: “The regulated bridging market is ripe for disruption and we believe we have the team in place to replicate the success we have enjoyed in the unregulated space, while remaining highly disciplined in our underwriting processes.”
LendInvest reports record number of bridging apps in Q3
It remained open as usual throughout the lockdown and continued to process existing and new loan applications.
Lendinvest already reported increases in signed applications during the first half of the year, but Q3 exceeded those numbers with a 58 per cent growth on total signed applications compared to the previous quarter.
Justin Trowse, director for bridging at LendInvest, said: “It’s been a tremendous quarter for new short-term lending business at LendInvest.
“Our pipeline is a record to date, and with the completion levels increasing month on month, we can only see this trend continuing into Q4 as property professionals seek to capitalise on the stamp duty land tax holiday ahead of its current withdrawal date in spring 2021.”
Leanne Smith, sales director at LendInvest, added: “The team has worked tirelessly over the past six months not only allowing us to remain open for our brokers and borrowers throughout lockdown, but also ensuring those customers received the highest level of service throughout this time.
“Call volumes and new applications are at the highest we’ve ever experienced and bridging packaging has improved materially for us internally.”
“With new systems and processes constantly being reviewed to manage and improve turnaround times, I am confident that we will be able to meet the increasing demand for property finance over the next couple of months while maintaining the high service levels we currently are,” she said.
Paragon and UTB fund residential developments – round-up
Paragon Bank has provided a £1.6m development finance loan to Hockley Developments to convert a care home into 26 residential properties.
Millbeck House in Nottingham, will comprise of one and two-bedroom properties with and is expected to be completed in May 2021 with Help to Buy available and 10 year new build warranties on completion.
Alan Forsyth, managing director at Hockley Developments, said: “From the first phone call with the team at Paragon, I felt the service provided was right for us at Hockley Developments. The team has been very efficient and straightforward to deal with and has always been available when required.
“The team has always been quick to meet us on site and understand our business; we felt valued as a client very quickly. We have enjoyed working with Paragon and will hopefully continue to do so as we look to grow over the next five years.”
Anil Sehmi, Paragon’s Midlands-based regional relationship director, added: “It is great to be able to support with funding for this scheme as it aims to bring more much needed housing to the East Midlands, particularly suited to first-time buyers with the availability of the Help to Buy scheme.
“Over the past few months, it has been our priority to support both new-to-bank and existing clients, so we are looking forward to hopefully continuing our relationship with Hockley Developments.”
United Trust Bank
United Trust Bank (UTB) has agreed to fund £4.6m to a development of houses and bungalows near Milton Keynes, Buckinghamshire.
The project, which will cost £7.6m in total, is situated in the Newton Longville village and part of a joint venture between James Taylor Homes and Housing Growth Partnership (HGP).
This scheme will be made up of 17 three and four-bedroom houses and bungalows.
Philip Kirkwood, property development director at United Trust Bank, said: “SME housebuilders play a vital role in tackling the UK’s housing shortage and UTB is keen to provide the funding to keep them building, despite the economic uncertainty presented by Covid-19 and Brexit.
“As such I’m delighted that we’re supporting this joint venture between James Taylor Homes and Housing Growth Partnership.”
He added: “It’s particularly pleasing that we were able to progress and complete this facility in the midst of the pandemic with all the additional challenges this has brought to all of our businesses.”
Bridging completion times hit 52 days as LTVs rise
The lender’s bridging trends report found it was moving closer to two months for a typical bridging loan to complete from July to September, something it suggested could be attributed to operational capacity issues.
This issue was also raised in September by Hampshire Trust Bank managing director Charles McDowell who noted turnaround times had become “embarrassingly long”.
Other key findings from the MTF research included an overall increase in bridging lending by 46 per cent in the quarter compared to the previous three months.
Transactions completed by contributors to the survey totalled £116m, up significantly from the £79m completed in Q2, but still down 36 per cent from the pre-Covid-19 level of £181m.
Regulated bridging lending continued to dominate the sector taking 53 per cent of all lending, while average loan to values (LTVs) increased to 51.7 per cent, from 48.8 per cent in Q2.
“This is likely attributed to borrowers turning to bridging finance as mainstream lenders continue to tighten their maximum LTV restrictions,” the report noted.
Encouragingly, the average weighted monthly interest rate in Q3 decreased to 0.78 per cent from 0.85 per cent in Q2 – falling back in line with the 0.75 per cent offered before the Covid-19 outbreak.
Chain break finance growing
The most popular use of a bridging loan was to purchase investment property but regulated refinance and a traditional chain break were the second most popular uses for bridging finance, each contributing to 17 per cent of all lending in Q3.
It is expected that chain break finance will continue to grow until the March stamp duty deadline as the mainstream mortgage market continues to feel the pressure.
MT Finance commercial director Gareth Lewis said: “It has been well publicised that the mortgage market is currently feeling the strain when it comes to delivering acceptable processing turnaround times, which can add to an already stressful experience.
“Luckily, bridging finance is a useful tool for brokers to help unlock a transaction for a client allowing them to meet deadlines.
“Given the stress on a chain, presented by the slow processing times, it is unsurprising to see more clients turning to regulated bridging finance to support their purchases.”
Price war dominating
Enness head of specialist lending Chris Whitney said a further drop in rates were expected as price wars seemed to be dominating the market.
“In the last quarter lenders and key stake holders such as valuers and solicitors had also been able to refine systems and processes that had initially caused problems when lockdown hit in terms of handling volume,” he continued.
“However, I don’t think the increase was purely a supply-led cause. We have seen huge demand from borrowers as well.
“Some perhaps starting previously postponed projects and others looking to put a war chest together in case a pandemic led trauma in the overall economy created opportunities for them.”
Aspen completes £2.3m multiple-use bridge loan
The first repayment was for an eight-bedroom newbuild mansion in Hornchurch.
The client was nearing the end of the development and was looking to capital raise on the site to fund the purchase of an investment property while extending the marketing period of the development.
As build control sign-off and warranty were still to be provided, Aspen liaised directly with the developer to gain all the needed information and ensure completion was not delayed.
The second element – the purchase of a three-bedroom newbuild flat in Canary Wharf – was funded in full including stamp duty and all associated fees.
The apartment had an outstanding issue to remedy for the purposes of the EWS1 form, and the lender liaised directly with developer Ballymore to get confirmation this was in hand.
Aspen provided 72 per cent LTV at a rate of 0.49 per cent for the initial six month period of the 12-month term.
The application was introduced by Foyaz Ahmed at Rainstone Money and John Smith of Fieldfisher LLP handled legals.
Harry Baker, credit manager at Aspen handled the case.
He said: “We will always back quality developments that require extended sales periods, but to do so while capital raising to 100 per cent to fund another purchase clearly demonstrates our flexibility and willingness to take-on complex cases where other lenders would walk away.”
Bridging will be vital to navigate roadblocks before stamp duty deadline – Jannels
Of course, the rapid decline in completions was not restricted to this particular sector and was felt across the UK as the housing market effectively shut down.
Bridging completions were recorded at £470m in Q2 2020, a fall of 56 per cent when compared to Q4 2019 figure – Q1 figures were not reported because of the lockdown.
The data also showed that applications increased by just over one per cent in Q2 compared to Q4 2019, while loan books showed a small decrease but remained at £4.5bn.
Average loan to values (LTVs) increased slightly in the same time period, but continue to remain at sub-60 per cent.
However, on a more positive note, it was encouraging to see recent reports that Hope Capital noted a record surge in demand between June 2020 and August 2020.
The lender saw its number of loans drawn treble compared to the same period the previous year. Looking at new cases, the quantity more than doubled over the same timeframe, rising by 128 per cent, and residential completions increased by 40 per cent.
The second half of Q2 certainly represented a transitional period for many links in the mortgage chain.
Transactions which had been delayed over the lockdown period were slowly resurrected and stamp duty changes ramped up activity levels towards the end of this period.
This meant Q3 kicked off with a real bang as pent-up demand surged through the market to generate what we can only class as a mini-boom.
Housebuying delays likely to continue
This has resulted in all types of property going under offer faster than they have for many, many years.
And all of this is happening while surveyors, conveyancers and lenders were, and in some respects still are, getting to grips with new working conditions and backlogs across a variety of transactions.
On the back of this, we are seeing reports emerging of property exchanges taking a month longer.
This is certainly not far from the mark, and these delays are only likely to be further extended as increased amounts of business flood through the door.
This may not seem like a huge issue with the stamp duty deadline still five months away but we all know how easy it is for chains to break, mortgage offers to be pulled and people’s circumstances to change.
Factors which really do place a sustained emphasis on speed and efficiency.
Time of the essence
Speed has always been a key word within bridging finance and this is a product type which will continue rising to the fore in Q4 and even more so in Q1 2021 as buyers will need to move swiftly to complete before the stamp duty deadline.
Bridging lenders are experts in processing applications under extreme time constraints and this type of finance will help more traditional homebuyers than ever to ensure chains are not broken, completions can take place on schedule and that robust plans are in place to exit this type of financial arrangement as soon as possible after the property has been secured.
Time really will be of the essence for thousands of potential buyers in the coming months.
Advisers with a clear route to bridging and other alternative forms of finance will be in a prime position to help a wider variety of clients to navigate any potential roadblocks.
FTB secures first BTL investment with Aspen bridge
The £460,000 bridging loan at 74 per cent loan to value (LTV) allowed the buyer to purchase a seventh-floor apartment in the Fulham Reach development as their first buy-to-let investment.
The initial rate is 0.59 per cent per month for six months.
Andrew Thriepland, senior mortgage and protection adviser at broker firm Capricorn Commercial, brought the case to Aspen while Leigh Haigh, real estate finance executive at law firm Fieldfisher, undertook the legals.
Thriepland said: “Leverage is vital for property investors, and in this particular case was essential for the applicant to secure the apartment, save their initial investment and begin their career as a property investor.
“As always Aspen, and in particular senior underwriter Prabhat Talwar who took the case from start-to-finish, immediately understood the aspiration and requirements and worked with all parties to ensure the funds were released as soon as possible.”
Ed Ahrens, managing director of Aspen Bridging, added: “To provide a first-time buyer with the required leverage in the current environment highlights the real can-do attitude of our lending criteria, but more importantly protects the investment for the applicant.”