Primus Finance’s client owned an unencumbered site with full planning permission in a rural spot in Lincolnshire. They had been turned down by another lender at the last minute owing to the location of the proposed development. 

Kyne McAllister, business development manager, North West, Midlands and Wales, at Affirmative, referred the case straight to Chi Ho, the lender’s head of underwriting. The Affirmative team worked with the client’s people to complete the deal before Christmas enabling the project to stay on schedule for 2020. 

“This was a very straightforward case which needed common sense to complete. We are very much open for business and here to lend, even on property or land in semi-rural locations that may put off others. We quickly established this was a developer and project we’d be happy to fund,” said McAllister.

Steve Pollard, senior bridging consultant at Primus Finance, said: “The client needed a lender that ticked all boxes in terms of loan size, site location and developer experience, and that could turn around the application as quickly as possible, because the developer wanted to get started on the build.

“Affirmative were a new addition to our development finance panel and I was really impressed with the broker-centric service from their underwriting team and solicitors,” Pollard added.

The lender was approached by Mark Steinle, independent mortgage and protection consultant at Knight Frank Finance, on behalf of a client whose home had been sold subject to contract.  

The client had exchanged to purchase a four-bedroom detached house on a private estate but when the sale fell through their property chain was at risk of collapsing as well as the deposit being lost. 

Half an hour after Steinle called the lender, terms were agreed for a regulated bridging loan covering the full purchase price of the client’s new home with her current home used as additional security.  

Greenfield also received a commitment from J Raymond Welch Surveyors that the timescales could be met to complete the valuation. Within 24 hours the application was fully approved and legals were instructed immediately.   

Arwel Griffith, managing director of J Raymond Welch Surveyors, said: “We were delighted to be of assistance in this case which was very testing. 

“J Raymond Welch Surveyors Ltd is always up for a challenge and we will always do our very best to deliver high quality valuation advice on time whatever the timescales required.”  

Greenfield Mortgages worked with their team at ESN Solicitors and the client’s solicitors at Mundays LLP to complete work within eight working days which was in time for the completion date on Monday 20 December.   

Andrew Franklin, business development manager at Greenfield Mortgages, said: “I was thrilled to assist with such an urgent case and deliver the funding required within the short timescale. Mark introduced the case over the phone initially with an extremely detailed overview and had a full understanding of the scenario, properties and client.  

“Mark kept in close contact with me throughout the whole process taking an active role which ensured the case progressed to completion in a timely manner. This type of scenario is truly what bridging is for.” 

Steinle added: “Andy installed every confidence in me from the beginning that Greenfield Mortgages could meet my client’s tight deadline.    

“Despite a couple of small legal obstacles, Andy and his team pulled off a Christmas miracle and made a client very happy. Given the complexity of this case, the time of year and short timeframe, Andy and his team have impressed no end.”  

The client built a block of flats using a development finance loan which was due for redemption, but a deal to sell off some of the units to a housing association had been delayed.

There was also an ongoing legal dispute, which needed to be resolved prior to completion on the loan.

Brightstar turned to Castle Trust, which structured the deal as two simultaneous bridging loans ‒ one with interest serviced on a monthly basis, and the other with the interest rolled up. This means the client is able to manage their cash flow until the sales go through.

Rob Jupp (pictured), group CEO of Brightstar Financial, said that the case was an example of how working with the right partner can make a deal which seems impossible completely achievable.

He continued: “Our relationship with the lender meant we were able to work together to structure a loan with a high exposure that took legal charge over the entire development and secured funding on a high loan to value against the block value of the site. This demonstrates the value of great partnerships.”

Barry Searle, managing director of mortgages at Castle Trust, said the case showed the value of working with specialists that understand the market and how to structure solutions.

He added: “The client faced a real problem, but we were able to work together with Brightstar to get them out of a hole and deliver a solution that will help them to achieve a successful result to their development.”

The £748,870 deal was needed to pay back a second charge bridging loan and to raise capital for business purposes.

The client had already begun an application with a different lender but the deal had stalled. Crystal placed the case with specialist lender Together on a Monday morning and the deal went to offer straight away. Searches were completed and the client signed the documents with a solicitor on Monday evening.

A new valuation was carried out on Tuesday morning and Together agreed to accept verbal figures from the valuer. An equitable charge was taken with consent-to-follow from Coutts.

Jo Breeden (pictured), managing director of Crystal Specialist Finance, said: “The fact remains there is still plenty of time before Christmas to complete deals if the right professional support is in place and the lender recognises to complete good opportunities. This is specialist finance in action, companies working in conjunction to meet a client’s needs.”

Marc Goldberg, commercial CEO at Together, said: “We have the team and expertise to look at applications and make quick decisions. This case demonstrates how we worked with our partners CSF and used common sense and flexibility resulting in a positive outcome for their client.”

The loan to value was 72.5 per cent and the interest rate was 0.55 per cent. The term of the loan was six months.

The client had advanced £100,000 as an option to purchase the multi-use building and needed a speedy solution when another lender failed to complete. 

Aspen underwrote the case and issued a decision in principle within three hours.

Within two days, an underwriter was on site with the customer and valuer to review planning and evidence of all permissions and licenses.

To speed up the process, Aspen used its 24-hour audit service to retype the original valuation detailing a new multiple-occupancy home, with licensing in process, on the second and rear ground floors of the building and a shop with ongoing tenancy facing the street.

The client had to remove a director and interview applicants for the position, including undertaking anti-money laundering checks, at the same time as carrying out the usual legal and valuation requirements. 

The drawdown was finalised in ten days with the funds used for the balance of the purchase price.

“We were able to overcome the issues and to realise drawdown quickly and professionally because of how our business is funded, our team’s skillset and our time-based service excellent targets,” said Jack Coombs, director of Aspen Bridging.

“This type of deal is our bread and butter,” Coombs added.

Critics described the service as a bridging loan better suited to experienced borrowers and said the fees were higher than other mortgage products on the market. 

The Habito Go service allows first-time buyers to make a cash offer on a house while they wait for their mortgage of up to 85 per cent loan to value to be approved, therefore “upgrading” their application. 

Borrowers will only be charged for the loan if the house purchase is completed, once they are a homeowner. The existing mortgage application will be cancelled and Habito will then convert it into a remortgage application on the same terms. 

High cost 

Estate agents cited concerns about the 1.95 per cent fee on the final agreed property price and 0.5 per cent fixed monthly interest on the loan, which would be applied if the applicant’s mortgage failed to come through on time. 

Founder and CEO of Springbok Properties, Shepherd Ncube, said this was “far higher” than a standard variable rate mortgage, while Rob Jupp, CEO of Brightstar said it sounded “extremely dangerous” and “irresponsible”. 

Daniel Hegarty, CEO and founder of Habito, refuted these concerns. He said the interest which is calculated daily would only be applicable for the number of days it was needed and would not be rounded up to a full month. 

“We feel this is a fair price for Go as a service and the cash advantage it gives buyers in price negotiations,” he said. 

He added: “We’ll always be upfront about the costs for each individual before they choose Habito Go and of course, if they don’t end up getting the property they wanted, they don’t pay a thing.” 

Similar to a bridging loan 

David Conway responded to the article announcing the service, calling it a bridging loan which he said was “a product for people with very clear objectives and understanding of costs”.

Hegarty said the service compared “much more favourably” to a typical bridging loan, which he argued tends to cost 1.5 per cent a month (or 18 per cent a year) and often has additional fees with no services included. 

The Habito Go service includes a fast-tracked valuation and legal work in its fees. 

However, rates available from many bridging lenders start at around 0.5 per cent per month and according to lender MT Finance, the average monthly interest rate issued in Q2 was 0.79 per cent.

A solution for some 

Hegarty agreed that while the service would not be suitable for every first-time buyer, it would be a “great financing option” for those who valued speed, certainty or had previously lost out to cash buyers. 

He added that it would only be available to approved Habito first-time buyer mortgage customers and eligibility for the loan depended on their personal financial circumstances and the type of property being purchased. 

Fully regulated 

He went on to say Habito were regulated by the Financial Conduct Authority and had the “correct approvals” to lend. 

Hegarty said: “We hold ourselves to the highest standards of integrity and pride ourselves on being clear and transparent, as well as innovative, in making mortgages easier for consumers.” 

Update: Since publication, Habito has contacted Mortgage Solutions to clarify that the loan does operate like a bridging loan.

The customer had a short deadline to complete the purchase of a Victorian grade II-listed former malt house, which was built in 1864 and had previously been converted into offices. 

His property investment company had a bridging loan in place with a bank but approached master broker Finance 4 Business (F4B) to buy the property when the lender decided to “move the goal posts”. 

After reviewing the case, instructing a valuation, and working closely with its legal partners at Priority Law, Together agreed a £2,018,451 re-bridge to pay back the client’s initial lender – and provided the funds in four days.  

The investor had already secured planning permission to turn the former office block, and two associated outbuildings on the two-acre site, into 90 one- and two-bedroom flats. These plans are expected to increase the site’s value. 

Marc Goldberg (pictured), commercial CEO at Together, said: “We were happy to do this deal when we saw the investor’s plans for this historic site.  

“Our partnership with F4B ensured a rapid turnaround and we were happy with the client’s exit strategy; an agreed development facility with another lender further down the line. In all it was a great outcome for us, the broker and their customer.” 

Russell Martin, F4B managing director, added: “The client was delighted. He’d initially been skeptical about whether we’d be able to do the bridge so quickly but, having worked with F4B on a number of occasions, he was confident that Together would deliver following our recommendation.” 

The new build located in East Harling has gained national televised coverage due to its green credentials and is being project managed by a working mum of three, alongside her builder husband.

The client and her husband began work at the half acre site three and a half years ago.

A two-storey build, the property will be built to passive house standards, requiring virtually zero energy to operate once complete and is set to be featured on Channel 4’s ‘Building the Dream’.

Extending to approximately 315 metres square, BFS has lent the client £180,000 in total, part of which will be used to complete the build and the remainder to pay off debts accumulated during construction.

The client chose to work with a bridging lender after a deal with another lender fell through despite funds being guaranteed and three months of negotiations.

Becky Darlington, business development manager at BFS, said: “This is a fantastic and aspirational build and the figures undoubtedly stack up, therefore it’s a project we’re very happy to support. Upon completion we anticipate the property to be valued at £1m with the loan repaid in full ideally within six months.”

Currently, the owners are living in a caravan on site with their young children, dogs and cats. The mother works nights as a carer, home-schooling the children during the day while also managing an online business.

Darlington added: “There is a fantastic story behind this deal and we’re delighted to be able to throw our weight behind these clients and look forward to working with them as the build progresses.”

The client needed the finance to buy land but had a deal with another lender fall through just days before the deal was due to complete.

The property company’s retained mortgage broker SPF Private Clients brought the case to Together and the specialist lender agreed a commercial bridging loan of £1.5m, secured against the land.

Ritchie Watson, lending director at Together, said: “This was a strategic purchase of a piece of agricultural land, which would be the final piece of the jigsaw in a wider project. 

“SPF provided all the necessary documents and our commercial underwriting team pulled out all the stops to get this deal across the line ahead of the customer’s completion date.”

Amadeus Wilson, director of short-term finance at SPF private clients, added: “We knew that Together would be able to provide the necessary funding within a tight timeframe. In the end, the client was delighted that we managed to achieve an impressive three-day turnaround from the application being submitted to funding being received.”

Specialist Lending Solutions contacted Together for the identity and location of the client and land, but was told they would remain confidential.

In a deal which took six weeks to complete, the lender’s commercial mortgages team were approached by broker partner West Rock Capital, and a client who specialises in permitted developments. The client was looking for a 24-month bridging loan to purchase a commercial premise on Milton Keynes train station. 

Worth £16m, the client required a £11.5m facility for the acquisition with the aim to sell in 18 to 24 months and the potential of redeveloping into residential units.  

There were some barriers with navigating the bridge, including the risk of the premises being located on a train station.

However, the team proceeded with the application once the valuer said they did not see a problem with the purchase or potential planning issues regarding the conversion into residential units.    

Using Shawbrook’s STL3 product, providing the ability to service the interest, the short-term team were able to fund this purchase at 70 per cent loan to value across a 24-month term, allowing extra time for refurbishment or planning delays.  

Shrena Patel (pictured), business development manager at Shawbrook, said that while there were “hurdles and moving parts” that needed to be overcome, the team worked together to find a solution for the client so the purchase could go ahead as planned. 

Westley Richards, director at West Rock Capital, added: “I am delighted to have successfully enabled our client to secure this exciting opportunity.”