MTF launches regulated bridging up to 65 per cent LTV
The lender has pledged to respond within one working hour with an approval or indicative terms on the initial assessment.
It will then aim to produce a loan contract and mortgage illustration within two working hours of receiving an application and supporting documentation.
Loans are available at up to 65 per cent loan to value (LTV) with rates starting at 0.65 per cent and the range is similar to that of its unregulated bridging.
While there is no overall commitment to completing cases within a set time, a spokeswoman told Specialist Lending Solutions that the lender was equipped to complete cases within two weeks.
“The goal in terms of completions is to ultimately complete transactions as quickly as possible,” she said.
“It very much depends on the transaction and what the deadline for this is. Ultimately, MT Finance is well equipped to complete transactions within two weeks.”
The regulated bridging products are currently available to a selected panel of brokers.
MT Finance commercial director Gareth Lewis (pictured) said the firm believed some lenders had lost sight of what was important for the sector and so had “stripped back to the essentials of bridging finance”.
“Nobody wakes up in the morning wanting bridging finance – they have a specific transactional need,” he said.
“Bridging finance is about providing liquidity and getting transactions done within a tight timescale.”
He added: “A number of brokers have told us that some challenger banks are taking 24 hours to say yes to a transaction on the basis of the information in front of them, with underwriting then taking up to four days.
“We believe these timescales are unacceptable. Their rates may be slightly cheaper but a client may be better off paying more for a product that better suits their needs.
“Every bridging client wants to redeem as quickly as possible so we would argue that rate is less important than getting the deal done quickly.”
Positive Lending is one of the firms offering MTF’s regulated loans.
Its chief executive Paul McGonigle said one of the firm’s first regulated loans with MTF was funded in four days from application.
UTB launches faster bridging service
The service was soft-launched in December and the lender is now rolling it out to all advisers.
“The aim of this new streamlined service for loans meeting qualifying criteria is to simplify the process for straightforward transactions,” UTB said.
A dedicated team is in place for the service which is for deal of up to £500,000 net and with a maximum loan to value of 55 per cent.
A maximum of two security properties are permitted, the primary exit must be through sale or refinance of security properties, and it is not suitable for heavy refurbishments or property improvement loans.
Brokers can create their own terms, decisions in principle (DIPs) and ESIS using the broker portal, or liaising with the in-house team.
The service uses biometric ID verification, automated valuation models (AVMs) and dual legal representation.
UTB commercial director – bridging Gavin Diamond (pictured) said the lender believed this would enable brokers to do more business, quicker and more easily.
“We understand that a quick turnaround is vital to most customers, and often why they’ve chosen bridging in the first place, so having developed and implemented a number of time and effort saving systems and processes, we’ve brought them all together to provide this market leading bridging service,” he said.
“Feedback from the brokers who participated in our soft launch has been overwhelmingly positive and we’re now ready to make it available to all UTB registered brokers.”
Impact Specialist Finance was one of the firms in the soft launch. Managing director Dale Jannels said the experience had been positive.
“The key to sourcing and delivering bridging finance is speed and efficiency and this service provides a really quick turnaround if cases are submitted correctly,” he added.
West One and Octane join L&G Mortgage Club panel
Mark Posniak, managing director of Octane Capital, added: “We’re very excited to have been appointed to the prestigious L&G Mortgage Club panel.
“The timing couldn’t be better as we expect 2021 to see opportunistic property investors and landlords seek to acquire new units in areas where prices are under pressure or refurbish their existing properties to remain competitive alongside the growing number of private rental sector schemes.”
For West One, the L&G Mortgage Club announcement follows the launch of a new range of buy-to-let products on January 18, as well as expansion of the buy-to-let team at the start of the year, and a company-wide brand refresh in December.
Managing director of West One Loans’ buy-to-let division Andrew Ferguson, said: “This is good news for brokers as they will now have access to our range of buy-to-let products.
“These include up to 80 per cent LTV starting at 4.04 per cent on our standard range, as well as our specialist house in multiple occupation (HMO) and multi-unit block (MUB) range, with rates now starting from 3.54 per cent.”
Danny Belton (pictured), head of lender relationships at L&G Mortgage Club, said: “The demand both for bridging and specialist buy-to-let continues to increase.
“We are always looking to give our members access to the widest range of products, so that they have the biggest possible supply of solutions for their clients.”
MFS secures £150m funding line to target stamp duty rush
The cash will used for funding its bridging lending as the firm targets the vanilla part of the market as the race to meet the stamp duty holiday deadline takes hold.
MFS said the additional credit line followed a significant increase in enquiries for bridging loans from property investors who are keen to meet the 31 March cutoff.
It noted that forecasts have suggested hundreds of thousands of transactions could be at risk of missing the deadline.
CEO Paresh Raja argued that some lenders were failing to meet their promises to brokers and clients.
“Brokers and borrowers are crying out for certainty, with many having been let down by other lenders when trying to complete on a deal,” he said.
“What’s more, the end of the stamp duty holiday is fast-approaching, and buyers want to take advantage of this tax break – they can only do this by having access to loans that can be deployed in days, not months.
He added: “Many lenders do not have the funding lines or expertise in place to meet this demand.
“This has resulted in some lenders overpromising and underdelivering, putting thousands of property transactions at risk of collapsing.”
Roma and Together update LTVs and valuation processes
Roma has increased its loan to value (LTV) by five per cent on residential bridging and will now consider applications up to 75 per cent, returning to pre-Covid levels.
It is also working with selected packagers to allow them to instruct their own valuations which should allow faster completions and give packagers more control over cases.
Previously Roma had controlled all the valuation instructions.
Nick Jones, commercial director of Roma Finance, said: “In 2021, it is essential we continue to make advances with products, processes and technology to maintain the speed intermediaries and customers need for their property investments.
“These enhancements will allow more customers to access short term finance and enable even faster case processing and completions.”
Together increases AVM use
Meanwhile, Together has updated its criteria to allow more automatic property valuations which it expects will reduce costs and speed up mortgage applications.
It believes more than half its cases can now be completed through digital valuations, up from a third in 2019.
The rules apply across all personal finance products, with a maximum LTV of 70 per cent or 65 per cent for regulated bridging, and to a maximum loan size of £250,000 and a confidence level of 5+.
The lender now has no maximum property value on automatic valuations for regulated bridging and first charge loans, while for second charge loans this has increased to £750,000.
Previously the limit for all application was £500,000.
For home purchases, Together will accept the minimum Hometrack valuation or purchase price, or the council valuation for right to buy properties.
Physical valuations will still be needed on shared ownership properties, those of non-standard construction and new-builds, it added.
Head of intermediary sales Sundeep Patel (pictured) said: “We estimate that changes to our rules mean we will be able to use Hometrack’s automated valuation model in more than 50 per cent of personal finance applications, up from about a third of cases in 2019.
“It’s an incredibly useful tool, particularly under the current Covid-related lockdown restrictions, and could reduce costs for intermediaries submitting cases to us, while speeding up the application process by removing the time it takes for physical valuations of properties.”
Advisers confident but valuations and seconds a big concern – Shawbrook
Two thirds of buy-to-let, commercial and bridging brokers said they were confident about the lending environment for this year with a similar number feeling positive about the growth of their business.
The Shawbrook Broker Barometer also found there was optimism around the economy in general, as 44 per cent of broker respondents said they were either very confident or fairly confident in the future of the UK’s economic state.
The market’s bounce back once it reopened last year helped to boost the performance of broker firms too.
A third said transaction volumes were currently up by 20 per cent or more compared to the beginning of 2020. Almost one in ten have seen business increase by 30 per cent or more while three per cent reported annual growth of 40 per cent or more.
Second charge brokers did not fare as well according to the survey, as a third said business levels were down by 30 per cent or more, and almost a quarter had seen a decline of 40 per cent or more.
A lack of confidence was also evident in the outlook of second charge brokers with 69 per cent saying they were ‘fairly concerned’ about the lending environment this year.
Business growth was also expected to be a challenge as 12 per cent of second charge brokers said they were very concerned about their business performance and 42 per cent said they were fairly concerned.
Just 19 per cent of second charge brokers were fairly confident about their business this year.
Feelings towards the wider economy were more positive with this group however, as half felt either very or fairly confident about the UK economy.
Areas of growth
Increased investment is expected in 2021, as 62 per cent of buy-to-let, bridging and commercial brokers said they predicted investors to expand their property portfolio.
As for the segments of the market that are expected to do well, 29 per cent forecast the buy-to-let market to experience the strongest growth this year and a further 29 per cent believed they will see a good performance in bridging business.
Second charge mortgages and semi-commercial investment were respectively predicted areas of growth for 14 per cent of brokers, while 11 per cent predicted the residential market would do well.
Furthermore, 42 per cent of brokers working in the second charge market said they expected to see growth in this segment and 38 per cent expected increases in residential business.
Restrictions relating to the pandemic and lending behaviour were common concerns with all specialist brokers as three quarters of buy-to-let, bridging and commercial brokers believing lending restrictions would impact business while 96 per cent of second charge brokers said the same.
The second main concern for buy-to-let, bridging and commercial brokers was valuation issues, with 66 per cent citing this as a worry, while 69 per cent of second charge advisers were worried about Covid-19 restrictions.
Emma Cox, sales director of property finance at Shawbrook Bank, said: “The optimism among brokers, even in the face of enduring uncertainty while we continue to navigate the Covid-19 situation, is great to see.
“The growth in business volumes when compared to the beginning of last year imply a robust recovery, which is likely to be fuelling the positive outlook for the year ahead.”
She added: “Despite the optimistic outlook, as we move further into lockdown 3.0, we understand there are still many brokers facing challenges, which is why it remains crucial for lenders to continue to work closely with brokers over the coming months.”
Crystal Specialist Finance and Loans Warehouse unveil new hires
Adam Tauber (pictured) has joined Crystal to head up its development finance
He joins from Affirmative Finance where he was a relationship manager, and was previously a business development manager at Together.
Tauber said: “The development finance market in the UK continues to perform well, and Crystal has a well-established position in the sector.
“I am looking forward to building on the foundations they have laid and raising the bar still further, working closely with brokers and lenders to deliver exceptional results.”
Jo Breeden, managing director of CSF, added: “Housing is clearly a priority for this government, therefore demand from developers will only grow in 2021 and beyond.
“Adam’s knowledge and previous mandated experience within lending environments will be crucial to support our brokers and help educate those new to this area of finance.”
Loans Warehouse adds to bridging team
Greg Chase has joined Loans Warehouse’s short term finance team as senior bridging adviser.
He will be tasked with further expanding the specialist broker’s bridging proposition – an area that Loans Warehouse has focused on in recent months.
Chase was previously a broker, specialising in commercial and bridging finance, with the Commercial Finance Network.
He has also held sales and underwriting roles at Enterprise Finance, The Loans Engine and Prestige Finance.
Matt Tristram, co-founder of Loans Warehouse, said: “We are delighted to welcome Greg to Loans Warehouse. While some firms have found themselves having to reduce headcount over the past months we have been expanding.
“The appointment of Greg is a further commitment to improving our bridging finance proposition and comes in advance of a number of key new additions to our bridging finance panel. Greg will be a key figure over the next 12 months within our bridging team.”
Chase added: “I am pleased to be joining Loans Warehouse and look forward to working with the team. The coming months will see strong demand for bridging finance and Loans Warehouse is well placed to help service those needs.
“I look forward to getting started.”
MT Finance reduces rates and raises maximum LTV
The lender now offers rates from 0.65 per cent for first charge bridging loans on residential property.
Loans start from £50,000 and are available to a variety of borrowers including first-time investors, limited companies, expats, and foreign nationals.
Loan terms range from one to 24 months, with no upfront fees, exit fees, or early repayment charges.
Gareth Lewis, commercial director of MT Finance (pictured), said: “We stood by the broker community throughout 2020, and our desire to support our brokers continues into 2021.
“We hope these improvements to our product offering, combined with our award-winning service levels, will provide the intermediary market with the support they need to offer fast funding solutions to those clients looking to take advantage of the stamp duty holiday and beyond.”
Together Q4 lending down two-thirds on 2019 but recovery underway
According to a preliminary trading update from the lender, its average monthly loan originations were £74.4m in the three months from October to December.
This was up 70 per cent from the £43.6m figure per month from July to September.
However, it was down 63 per cent from the record level of £205.8m during the same period in 2019, which totalled £617m in lending.
Together said it had continued to support its customers throughout the pandemic, with 23per cent mortgages by value taking a payment deferral since the onset of Covid-19.
But on 31 December 2020, just 1.9 per cent of customers by value remained within a mortgage payment deferral compared with 6.2 per cent on 30 September 2020.
Together added that its average monthly cash receipts were £142.2m during the quarter, up from £125.7m in September, with total accessible liquidity increased to £300m from £267m, with almost a billion pounds headroom in its financial facilities.
The firm published the figures as it announced the offering of £450m worth of bonds for investors due in 2027.
A complete set of results for operations from October to December is expected next month.
Positive H1 ahead for specialists with bridging and development finance demand growing – Zaprzala
I am confident the property market will continue to beat expectations, just like in 2020, and I believe the whole country will be in a much better position towards the summer as the vaccination rollout progresses.
We are still seeing strong demand for bridging loans specifically to help buyers looking to move fast to beat the stamp duty deadline, and we expect this will continue over the coming few weeks.
Opportunity to act may be too late in the mainstream lending market, but bridging lenders like us thrive on opportunities to help clients when time is against them.
We are also seeing sustained interest from non-UK residents looking to purchase before the two per cent stamp duty surcharge comes into place for them on 1 April.
After the stamp duty tax breaks end, volumes will likely dip, especially as government support is scaled back.
However, if we see average property prices fall back a bit as a result, we know there are plenty of property investor clients waiting to take advantage, and actively looking to pick up bargains.
We expect to see an increase in demand for development finance this year, particularly for projects to convert commercial buildings to residential under the new permitted development rights.
The current climate presents that sad inevitability that more of your clients will find themselves excluded from the mainstream mortgage market.
But thankfully the specialist lending sector is thriving and strong, so we will be able to help many of them borrow or refinance, where opportunities allow.
Overall, in 2021 the property market should prove resilient and towards the middle of this year we will have an indication of the impact the vaccination rollout is having. I think there will be a boost in confidence as we start to get on top of the virus.
Changing client needs
Obviously, the economic impact of the Covid-19 crisis will start to bite for many, and we will need to be ready to adapt to the changing needs and finances of borrowers.
As a broker, by making sure you know what’s on offer across the specialist lender sector, including short-term finance options, you can be confident you’re able to help those who find themselves blocked from high street lenders.
If you are new to specialist lending, remember that packagers can help you place your complex cases and if you prefer to deal with a lender directly, that is great too.
I am grateful for the support of all our broker partners over the last year and I cannot wait to speak to you again in 2021.