Specialist distributors team up with Castle Trust and Foundation Home Loans
Castle Trust offers short-term finance, second-charge loans, complex buy-to-let products and development finance.
The distributor said it has ‘rapid growth plans’ in place for 2020 which have been kicked off with its expansion into the North of England with the appointment of Simon Bancroft.
Meanwhile, Foundation Home Loans has partnered with packager firm, The Mortgage Trading Company.
The Mortgage Trading Company will have access to Foundation’s range of buy-to-let mortgage products including solutions for portfolio and limited company applicants.
Based in Leeds, The Mortgage Trading Company works with lenders in order to provide solutions for advisers’ more complex mortgage enquiries.
The Mortgage Trading Company also packages residential, second-charge, commercial and bridging finance deals.
Earlier this month, Foundation cut rates by up to 20 basis points on its individual and limited company fixed-rate product range for both single tenancy properties, as well as large HMOs and short-term lets.
UTB extends facial recognition ID verification service to bridging
The system, based on a bespoke smartphone app, was rolled out to UTB’s mortgage customers in September 2019.
Customers borrowing £1m or less are able to use the Nivo app and save themselves time and inconvenience and verification takes just 90 seconds to complete, the lender said.
However, customers can choose to meet a UTB representative to go through the identity verification process in the traditional manner if they prefer.
Identity is verified by using facial recognition AI to compare an applicant to their nominated document such as a passport, driving license or national ID card.
United Trust Bank commercial director – bridging Gavin Diamond noted that introducing the verification service for qualifying bridging loans will make the application process quicker and easier for customers and their brokers.
“UTB’s mortgage customers have been benefitting from the service since September and we have been working closely with Nivo to enable the innovative service to be applied across more of our products,” he said.
“At UTB we are keen to introduce innovative FinTech solutions where they help to streamline and simplify customer and broker journeys,” he added.
MT Finance added to MCI Club panel
The partnership follows its addition to Paradigm Mortgage Service’s panel in January.
MCI Mortgage Club has been expanding its lender panel over the past 12 months and now encompasses over 40 lenders across the market.
Gareth Lewis, commercial director at MT Finance said: “As part of strategy for 2020 we have been actively looking to broaden our broker reach and support the education of the specialist market to a wider audience.
“Partnering with MCI gives us a great opportunity to continue this, and help brokers understand how bridging can help their client’s needs.”
Phil Whitehouse head of MCI Club said: “I really look forward to working with the team at MT Finance to bring their short-term bridging products to MCI’s growing data base of intermediaries.
“As borrowers’ circumstances get more complex it is vital that brokers have as many opportunities as possible to help them satisfy more and more customer’s needs.”
Octane extends permitted works, LTVs and LTGDVs on refurbishment
The lender upped the level of works permitted from 50 per cent up to 100 per cent plus of the current market value of a property for heavy refurbishment projects.
It has also increased the maximum LTV (on day one) and maximum LTGDV up to 75 per cent.
It said the improved market outlook was behind the changes allowing it to open out its risk profile.
“This will give landlords considerably more firepower to manufacture value from their portfolios to maintain a strong margin and reinvent them in order to keep pace with increasingly popular private rental sector developments,” the lender said.
Managing director Mark Posniak (pictured) added: “Revisiting our refurb range was a logical step given our renewed confidence in the outlook for UK property and the broader forces at play within the rental market.
“Refurbs are not just a way for landlords to manufacture value out of their portfolios to mitigate the impact of taxation changes but also to reinvent them to remain competitive alongside the growing threat that is PRS.
“The result is a surge in demand for refurbs across the board, from light and moderate to heavy.”
‘Levelling up’ pledge must apply to smaller developers UK-wide – Sealey
We’ve heard a lot about rebalancing the economy by ‘levelling up’ regional economies to match the prosperity of London and the South East.
The Budget will be where we find out the detail and substance behind those promises.
We can expect to hear much more of initiatives like the Towns Fund that promises up to £3.6bn to revive parts of the country suffering from long-term decline.
These are exactly the sort of places that went from red to blue on the electoral map back in December, so delivering for these communities will be high up on the government’s agenda.
Push demand for finance
While there are no guarantees, these regeneration projects are likely to stimulate more private investment in these places too, and this will likely raise the prospect of increased demand for short-term finance.
We’d like to see the government also step up its efforts to get more homes built, and existing properties brought into use.
The approach in the past has always been focused on large-scale builders, who in turn look mainly to the South East, where they see the biggest pound signs.
If the government is serious about ‘levelling up’ it will instead give much greater priority to smaller-scale developers all over the country, who are not sitting on large land-banks and so have a strong incentive to get on and deliver.
Bailey moves in
As well as the Budget, a lot also hinges on the approach taken by the new governor of the Bank of England, Andrew Bailey, who takes up his role the following week.
The economy is still growing anaemically, and an already weak pound is likely to come under renewed pressure as trade talks with the EU continue.
The public finances also seem set to deteriorate as the grip of austerity is loosened.
We will quickly find out whether the new governor is an interest-rate hawk or dove.
How he goes about handling these competing demands will be an important factor in how the economy as a whole performs as the UK looks to make its way in a post-Brexit world.
Trio of appointments at Brightstar, Crystal and Catalyst
Hollands (pictured) has 25 years’ experience in the mortgage industry, having previously held roles at Yorkshire Building Society, Bank of Ireland Mortgages and TSB.
He has also worked as a mortgage broker and was most recently national account manager at Sainsbury’s for Intermediaries.
This recruitment follows the appointment of Darren Perry in December, also to the role of national account manager.
Crystal Specialist Finance (CSF) has appointed Samantha Pettit as business development manager – North and promoted Dan Morris to key account director.
Pettit will be responsible for growing sales and serving intermediaries located in the Midlands and the North of England. She joins from Clever Lending where she held the post of broker relationship manager.
In his new role Morris will take responsibility for key relationships with mortgage networks and large national distribution partners. He joined CSF in May 2016 and previously held the post of director of intermediaries.
Both Pettit and Morris will report to interim group sales director, Jason Berry.
Meanwhile, Catalyst Property Finance has promoted James Farge to head of new business.
Farge will manage Catalyst’s internal new business team.
Reporting to Catalyst’s chief executive, Chris Fairfax, Farge will be responsible for generating new short-term loan business, overseeing the process from the initial enquiry to the offer.
He joined the company at the start of 2019 from a property sales background.
Connect and HTB complete £5.4m court conversion deal
The loan provided finance for a former magistrates’ court that had been converted into 30 apartments.
The property, situated in the town centre, is expected to be suitable for both investors and first-time buyers.
The facility was brokered by Connect IFA.
Adam Butler, lending manager at HTB, said: “All parties worked closely with the client to fully understand the deal and what they are looking for and I am chuffed that we could get this completed.”
Kevin Thomson, sales director at Connect, added: “This case typified the benefits of lender, network and broker working together for the same goal of satisfying the client’s requirements.”
Funding 365 cuts rates on flexible three year loans
The lender said it has designed the deals to be tailored to suit the yield of the borrowers’ properties in terms of terms of pay rate vs retained rate.
Interest rates now start at 6.74 per cent per annum with a minimum pay rate of 4.5 per cent.
The loans can be secured against commercial, semi-commercial and residential (including houses in multiple occupation) properties in England and Wales.
Funding 365 has also extended the maximum length of the bridging term which can be included in the bridging version from eight months to 12 months, in order to provide borrowers with greater scope to be able to exit the loan without any early repayment charges.
The starting interest rate of these bridging terms has also been reduced from 7.49 per cent per annum to 7.25 per cent.
Mike Strange, managing director at Funding 365, (pictured) said: “We’ve managed to sharpen the pricing and simplify the products while at the same time increase the flexibility in terms of payment options.”
Lender incentives and poor practice can drive borrowers into default – Octane
As a result, brokers are being urged to ensure they are recommending reputable lenders to their clients and are fully aware of the potential costs of going into default on a loan.
Octane Capital CEO Jonathan Samuels (pictured) told The Specialist Lending Event 2020 that while he believed certainty of funding was the most important aspect for an adviser to consider, lender reputation including their approach to defaults was vital.
Samuels and Octane managing director Mark Posniak have been vocal about default practices in bridging lending over the last year and Samuels highlighted some of his concerns, citing that one lender charges five per cent the first day over term.
“There’s often an incentive for the borrower to have a shorter term because often interest is deducted, so the net loan is higher and they get more money if the term is shorter, but it carries a huge amount of risk,” he said.
“So I think it’s the lender’s responsibility to be realistic about what the term should be. And you don’t want to be with a lender who is incentivised when the loan goes into default.”
Lenders should guide the term
OneSavings Bank sales director Adrian Moloney agreed: “It comes down to lenders recognising the correct term for a bridge,” he said.
“Someone might apply for six months but you can clearly see it’s going to take longer, if you’ve got the expertise in the market, it’s potentially unlikely to sell the property in that term.
“So you need the expertise and to guide what the correct term might be.”
Moloney also said the responsible lenders would be proactive in communicating with borrowers during the term of the loan.
Samuels concluded: “There’s a huge disparity and you want to make sure that who you are putting the business to you don’t get into that situation.
“And if your client is in that situation, who are they going to look to? It’s probably the person who’s introduced them to that lender.
“It is something that’s often overlooked and I would encourage you to pay close attention to the detail when looking after your client.”
Masthaven founder and chief steps down
He will be replaced by Leigh Bartlett who is currently chief financial officer.
Bloom will continue as a shareholder and non-executive director.
Masthaven was founded in 2004. Bloom built the business up from a specialist bridging lender to bank, after the firm received its banking licence in 2016.
The lender now has more than 180 staff, and has completed £1.1bn of lending while raising £1.2bn of savings from customers.
In April 2019, Värde Partners completed a strategic £60m equity investment in Masthaven.
Bloom said: “Masthaven has been a major part of my life over the past 15 years and it has been a privilege to found, serve and grow Masthaven from the early days when it was just a handful of people to the specialist bank it is today.
“I am very proud of Masthaven and how its talented employees have always striven to deliver a personal solution for our customers and intermediaries.
“We have built an incredibly strong foundation and a great leadership team. As a non-executive director and significant shareholder, I will continue to assist Leigh and the leadership team in driving Masthaven forward.”
Bartlett added: “It’s an honour and great responsibility to take over from Andrew. I would like to thank him personally for the support he has given me since joining Masthaven. I look forward to continuing to grow the bank, together with the Masthaven team, to become one of UK’s leading specialist banks in the UK residential and SME markets.”