UTB property development loan book breaches £1bn with further growth expected
In the past year, UTB grew its property development sales team to 24 directors and managers and has struck partnerships with Homes England and British Business Bank to broaden its reach to housebuilders.
With Homes England, it agreed a five-year lending alliance and launched a £250m housing accelerator fund to support SME housebuilders with development finance up 70 per cent loan to gross development value. It provides construction loans between £1m and £10m.
UTB also secured an Enable Build guarantee, valued at £250m, through British Business Bank, which the lender said allowed it to grow the amount of development finance it can provide to housebuilders.
During the lifetime of the guarantee, it will support the building of 2,700 units of new housing and provide £300m of funding to SME housebuilders.
The bank said it planned to grow its property development loan division with more locally based development directors and managers, who would work with housebuilders to create more development finance and developer exit solutions.
This year, it will also use technology to improve the funding application process for brokers and customers, as well as continue to develop its offering and strike more strategic alliances.
Adam Bovingdon (pictured), head of property development at United Trust Bank said surpassing the £1bn mark in its development loan book was an “impressive achievement” for the team and company.
He said: “We supported more SME housebuilders with more funding in 2021 than we ever have before, and our loan commitments now support the delivery of in excess of 6,000 new homes across England and Wales at any one time.”
He added that its personal approach to its development finance along with the team’s knowledge of the construction industry had appealed to a wide range of customers across the country. Its partnerships with Homes England and British Business Bank also allowed it to increase its lending of “higher geared funding” to housebuilders and development.
Bovingdon said: “Our aim this year is to further develop our compelling offering and assist the resurgence of the SME housebuilding sector.”
UTB is also planning to grow its asset finance division, following a record breaking performance last year, by expanding its team, innovating products and investing in technology.
It also appointed Nikki Brett, formerly of Hampshire Trust Bank, to the new position head of underwriting for the bridging division.
Enra raises £285m in second public securitisation
The transaction, named Elstree Funding No.2 Ltd, was backed by a portfolio of first-charge buy-to-let (BTL) and prime second-charge mortgages and was originated under its lending subsidiary West One Loans.
The securitisation comes two years after it issued its inaugural transaction in November 2020.
The lender said there was “significant investor demand” for the bonds, and the deal achieved “tight pricing” despite being oversubscribed.
It continued that the securitisation came after a record year where the firm delivered £36m of earnings before interest, taxes, and amortization (EBITA), lending growth and scale and optimisation within its funding programme.
Referring to what he called a high level of investor engagement and strong execution, Adrian Scragg, Enra’s director of funding solutions, said the result was “testament to the strength and maturity of the business, and the high credit quality of the loans it originates”.
Danny Waters (pictured), Enra’s chief executive, said: “The securitisation is a great start to the year, and the culmination of significant work through 2021 to mature and industrialise our funding. In the last 12 months we have attracted new warehouse partners, established a flow agreement, grown our lending significantly and delivered on our promise to become a repeat residential mortgage backed securities (RMBS) issuer.”
He added the business was “extremely well placed to scale up further in 2022”.
Originally a bridging lender, West One entered the second charge and development finance markets in 2017 and launched BTL products in 2019.
Enra said it serviced all of its assets in-house and also acted as a specialist mortgage distributor under the Vantage Finance and Enterprise Finance brands.
Belmont Green raises £400m in first securitisation of the year
The transaction, named Tower Bridge Funding 2021-2, is a mixed pool of buy-to-let and owner-occupied mortgages and was supported by Santander, Barclays and Bank of America.
This comes off the back of two securitisations in 2021, with the first one raising £350m, and the second one raising £300m.
Belmont Green said it attracted “strong investor interest” and the five classes of notes issued attracted over £1bn of demand, including some new investors.
It said it achieved its lowest cost funding to date, with senior notes priced at 72 basis points over Sterling Overnight Index Average.
It added that it had become the first UK issuer to share the new industry standard Environmental, Social and Governance (ESG) questionnaire, and there was an additional ESG presentation and energy performance certification disclosure on the mortgage portfolio.
Anth Mooney (pictured), chief executive of Belmont Green, said: “The specialist mortgage market continues to develop as we emerge from Covid-19, and customers subsequently reassess their living circumstances.
“This latest RMBS deal and our resulting lower cost of funding allows Vida to help more customers and in the longer term, supports our growth ambitions as we work towards seeking authorisation as a bank from the PRA. We welcome the increasing focus from investors on ESG matters, as they are a fundamental consideration in the way we run and grow the business.”
John Rowan, chief financial officer of Belmont Green, added: “The pricing of and strong support for our latest securitisation transaction clearly demonstrates investors’ recognition of the strength of our mortgage book and business.
“We are happy to welcome more investors to the platform and are encouraged by the strong demand to invest in Belmont Green transactions.”
Foundation Home Loans expands into Scotland
The product range can be accessed by mortgage intermediaries through the lender’s existing distribution panel including The Lending Channel, which has joined as a packager.
The Lending Channel is a broker firm based in Perth, Scotland. It handles second charge, commercial mortgages and short-term finance as part of its remit.
Foundation Home Loans has also appointed regional account manager Fiona Robertson to cover Scotland and the North East regions.
George Gee (pictured), commercial director at Foundation Home Loans, said: “We are very pleased to be announcing our launch into Scotland, kicking off the new year by expanding our geographic distribution, and welcoming the mortgage intermediaries who are active in Scotland to access our ranges of specialist owner-occupied and buy-to-let mortgages for their clients.
“This is an exciting time for Foundation and we’re looking forward to building new relationships in Scotland, engaging with all stakeholders and providing greater product and criteria options for borrowers.”
Alistair Ewing, managing director of The Lending Channel, added: “We are delighted to have been invited to join Foundation’s packager panel in Scotland, providing access to its fantastic products and helping them spearhead their Scottish growth plans.”
United Trust Bank Asset Finance sets out tech and product investment growth strategy
Originations grew by 136 per cent in 2021, making it UTB’s fastest growing division by business volume and headcount, the bank said.
Its loan book also exceeded £200m for the first time.
The Asset Finance team hired 14 people to its sales, operations and credit departments last year, including the recruitment of four underwriters.
Astrid Michael was appointed head of sales for Asset Finance whilst Louise McIntosh joined as head of operations.
Last year, the bank announced it would focus on transacting higher value loans up to £2.5m and its intentions to become a go-to funder for higher value car finance.
Nathan Mollett (pictured), head of Asset Finance at United Trust Bank, said: “2021 was a very successful year for UTB’s Asset Finance business. We more than doubled our new business lending year-on-year and we’ve grown the team in all departments. We have great people working at all levels of the division, all equally committed to providing exemplary broker service and putting UTB on the map as the best specialist asset finance lender in the market.
He added: “The technology we’re implementing this year is designed to further simplify processes and accelerate turnaround times without sacrificing that vital USP and we’re developing some exciting new products which will help brokers develop their businesses into new markets.
“Talking of which, we are dealing with more brokers than we ever have before so as well as investing in technology we are continuing to recruit experienced professionals to ensure we maintain those strong relationships and deliver the very best experience to brokers and their customers. In 2021 we built a great team and set out our stall. Now watch what we do in 2022.”
Marc Osterley joins Saxon Trust as financial controller
Osterley has spent over 25 years in the property sector and is chartered management accountant. He has previously worked at property investment and development company Hammerson for 10 years, most recently as a financial accountant and prior to that work at Ballymore Properties as a finance manager.
While at Hammerson, he was responsible for flagship retail centres including Brent Cross and the Bullring.
His most recent role was financial controller at Augur Group, a position he held for nearly seven years.
At Saxon Trust, Osterley will be implementing new structures and processes to support the lender’s growth plans. As well as managing the day-to-day accounting he will work with both the new business team and assist the chief investment officer with existing and new funding lines.
He will work alongside Saxon Trust’s co-founder and director, Andrew Gardiner.
Osterley said: “Having enjoyed a successful career in the property sector I’m excited to be joining a front-line lender for the very first time. The opportunity to shape my role in a progressive and fast-growing business is one I’m really looking forward to.”
Gardiner added: “Marc’s investment and development experience, gained across some of the country’s leading real estate companies, ensures that we have secured the services of someone who brings a unique insight and perspective to our team.
“Recent appointments demonstrate our ambition to grow the business and Marc will play a fundamental role in ensuring that we hit and surpass our ambitious targets.”
Fiduciam secures £400m funding
Interest rates now begin at 0.55 per cent a month for bridging loans, 0.57 per cent a month for permitted development and conversion loans and 0.61 per cent per month for ground-up development loans.
The lender said it expects demand to be strong for its commercial and development loans this year as the economy recovers and projects which were put on hold resume.
Fiduciam’s loans range from £250,000 to £25m and have a term of six months to three years. Lending is available up to 75 per cent loan to value (LTV) for residential property and up to 65 per cent for commercial property.
Last week, Fiduciam announced it had expanded into Scotland as it saw the region as a “key target” for 2022.
Jake McCausland, heading Fiduciam’s development lending for the UK and Ireland, said: “Our 2022 development pipeline is very strong, and the large number of repeat borrowers we see is a testament to the service we are able to offer.
“The new interest rates and LTV parameters will allow us to build on this and establish ourselves as a leading development lender.”
Johan Groothaert (pictured), CEO of Fiduciam, added: “The additional £400m of funding now available to be deployed in 2022 is a strong vote of confidence by our institutional funding partners, both in the economy and in Fiduciam as a lender.
“We are expanding our lending operations across all markets, the UK as well as Spain, Ireland, the Netherlands and Germany. 2022 promises to be a very busy year and we look forward to assisting as many entrepreneurs as possible to turn their projects into reality.”
The ‘biggest opportunity’ lies in delivering ‘best customer experience out there’– Walker
Speaking to Specialist Lending Solutions as part of the Get to Know Your British Specialist Lending Award Winner series, Shawbrook Bank’s head of product development and proposition Darrell Walker (pictured) said that low interest rates had squeezed lender margins for a “prolonged period” and, whilst the base rate had recently increased, it was “unlikely” this would change in the short term.
This, coupled with more lenders competing for market share, meant it was a “case of being the best at what we do or do something new”.
He explained: “In a mature market, doing something new isn’t a realistic everyday prospect, a fact which is reflected in the number of new entrants and increased competition across all of Shawbrook’s asset classes.
“We therefore believe our biggest opportunity, during 2022 and beyond, lies in delivering the best customer experience out there, from strong broker relationships to market leading technology and everything in between.”
The specialist lending market “did not skip a beat” during the pandemic, he said, despite the challenges it presented to the industry.
Walker added that the pandemic had prompted changes that otherwise would have taken a long time to occur, pointing specifically to the heightened use of automated valuation models as a “great example of long-lasting benefit to many”.
He said: “I’m incredibly proud that our doors stayed open, and we continued to lend, albeit with caution, in a time of need. More importantly, we demonstrated resilience, expertise, and commitment to the wider market, continuing to support brokers during very challenging times.
“I still regularly receive feedback from brokers expressing their appreciation, not least because we were one of the first lenders to begin restoring our pre-Covid proposition.”
Walker said that the sector would feel the effects from the pandemic for years after the fact, comparing it to the 2008 financial crisis which he said was still affecting the sector more than a decade later.
“Whatever the reasons though, the people in this industry have shown that those effects can be beneficial in the long term,” he said, “not just for the industry at large, but also for customers.”
Specialist lending market has ‘changed considerably’
Walker added that during his 25 years in the intermediary lending space the market had “changed considerably”, but people were still the “fundamentals and DNA” of the industry.
He said that during the early days the intermediary market was dominated by high-street-type lending, complemented by “vanilla” buy-to-let, adverse credit and self-cert products.
“People reading this who were around 10 to 15 years ago, and I’m sure many of those who weren’t, don’t need me to tell them about the problems some of the activity during that period led to,” Walker said.
However, now there is much “greater focus on the fair treatment of customers at all levels of the industry” and a wide range of customer needs are being met by a “greater number of expert, specialist lenders”.
“As I said above though, it’s the people that make our industry great, and able to adapt and improve over time,” Walker said, “and I, for one, hope that never changes.”
Fiduciam cuts rates and details its Scotland expansion
At the same time, Fiduciam announced that it was offering new, lower interest rates starting at 0.57 per cent per month for bridge loans and non-ground up projects. Rates for ground-up developments will start at 0.61 per cent per month.
Fiduciam’s case manager Louisa Willoughby said “Scotland is a growing market for specialist finance and a particular focus for Fiduciam for 2022.
“Historically Scottish businesses have been underserved, with limited options for more complex property finance – from time sensitive bridge loans to development finance for family housebuilders. Fiduciam’s expertise of lending in a variety of European jurisdictions, including Spain, France, Germany and the Netherlands, means that Scotland’s distinct legal system poses us no challenge.”
Johan Groothaert (pictured), Fiduciam’s chief executive, said the lender’s Scottish team had been set an “ambitious origination target” and as “local knowledge is at the centre of good lending” establishing a specialist team for its Scottish business was a “natural next step”.
Fiduciam also said its interest rates in Scotland remained fully aligned with those offered in England and Wales. The company issues loans secured over real estate in the United Kingdom, Ireland, Spain, the Netherlands, France, Germany, Belgium and Switzerland in pounds and euros. The lender said that typical loans were between £250,000 and £25m with a maximum loan to value of 70 per cent for residential properties and 65 per cent for commercial ones.
InterBay cuts rates across semi-commercial and commercial ranges
The lender, an arm of OSB Group, said the reduction applied across all of its semi-commercial and commercial ranges, giving investors the option to choose products on an interest-only basis and widening the number of asset classes it would consider.
Rates will start from 4.69 per cent, and two-year loans have fallen by up to 0.4 per cent, whilst three and five-year loans have been cut by 0.5 per cent.
The company also reduced its proof of rent requirement for semi-commercial and commercial loans from 12 months to three months.
InterBay also said it had raised its LTV calculation to a maximum of 75 per cent in a bid to spur investors seeking new commercial opportunities this year. This is up from 70 per cent for semi-commercial borrowers and 65 per cent for commercial borrowers.
Emily Hollands (pictured), head of specialist finance at InterBay, said: “We’re ready for a strong commercial market in 2022 and to help support investors with their business plans, we’ve developed a range of products which offer a wide choice of lending solutions.”
“Brokers applying for one of our mortgages will benefit from a personalised, flexible approach,” she added, including help from specialist finance account managers and an in-house real estate team that handles complex cases.