Tuscan Capital completes £9m bridge to purchase brewery’s 130-property portfolio
The developer had agreed to buy the portfolio of 130 mixed-use commercial and residential assets in the Midlands last year.
The two sides exchanged contracts on Christmas Eve 2020, but completion stalled when the buyer’s lender pulled out.
The developer called on Tuscan Capital in mid-February seeking a bridging facility to meet the completion deadline of 26th March.
The lender structured the deal as a single £9m loan, cross-collateralised across the 130-asset portfolio. The term was set at 12 months and the rate 0.85 per cent per month, all agreed by 24 February.
The loan was fully funded by Tuscan Capital. The borrower put some of its own unencumbered property stock against it, resulting in a loan-to-value exposure to the lender of below 60 per cent.
Tuscan Capital then selected partners to support the urgent and complex valuation and due diligence processes.
BNP Paribas Real Estate in Birmingham led the valuation, and Howard Kennedy conducted legal due diligence.
“Bringing the deal to a successful conclusion in time for our client to meet their 26 March deadline was a huge relief for everybody,” said Colin Sanders, chief executive at Tuscan Capital (pictured).
“Turning the deal around in 21 working days proved that with the right team in place and a positive, proactive mindset, the most complex transactions can be brought to a speedy resolution.
“Given the prevailing lockdown restrictions and the timeline, our choice of professional partners was critical. Richard Gill and his team at BNP Paribas Real Estate did a sterling job of valuing the portfolio inside two weeks.
“Producing the valuation report for such a large bundle of diverse property assets, and then verifying the title plans, was very impressive.
“Steve Clinning, Laura Brown, and the team at Howard Kennedy, performed outstandingly on the legal due diligence. With several all-nighters, our legals were ready for completion ahead of the borrower’s,” Sanders said.
Top ten most read mortgage broker stories this week – 26/03/2021
Elsewhere, an opinion piece from Hiten Ganatra that dished out a healthy note of scepticism of the government’s 95 per cent LTV grabbed readers’ attention as did news that more shared ownership homes would be built using Right to Buy receipts.
Lenders tighten self-employed affordability – MBT
Let’s not expect miracles from government’s mortgage guarantee scheme – Ganatra
TSB confirms April return to 95 per cent lending
Vernon BS launches cheapest 90 per cent LTV mortgage
Shared ownership boost as councils will build more homes from Right to Buy income
Accord and Coventry BS cut high LTV rates
Skipton relaunches 95 per cent LTV mortgages but cautions on short-term availability
Virgin Money cuts high LTV rates by up to 0.16 per cent
Greedy, unethical brokers must not be allowed to pollute bridging market – Coates
Quarter of homeowners miss mortgage payments due to ill health – MetLife
Roma Finance joins Fluent Bridging panel
Fluent Bridging was set up at the beginning of March by parent company Fluent Money Group.
John Hardman, former head of sales for Bridging Finance Solutions, was appointed as managing director to lead the team of short-term finance brokers.
Roma specialises in bridging, development and buy-to-let products for residential and commercial opportunities.
“I am delighted to have Roma Finance on my panel of lenders,” said Hardman.
“They have been a model of consistency for many years in this sector and have carved out a niche for themselves when providing tailor-made solutions for heavy conversions and mid-sized property developments. Fluent Bridging are very much looking forward to working with their team.”
Nick Jones, commercial director at Roma, added: “Being asked to be part of this new initiative is very exciting.
“The fact that Fluent Money Group is entering the bridging market is a welcome move for the industry and it complements their already solid offering.
“There is a real appetite in the business to grow and support their customers, that I have witnessed personally. This drive and commitment to the market and end borrower is perfectly aligned to the values of the Roma team.”
Shawbrook, Paragon and MFS complete commercial and development deals worth £13m
The lender delivered the commercial investment facility working together with adviser Pure Funding Solutions.
The deal comprised £5m refinance and £2m new capital to support an existing customer’s next commercial property investment.
The loan was over 10 years at 75 per cent loan to value (LTV). It was offered on a Friday and completed on the Monday.
The customer approached Pure Funding Solutions seeking to refinance its large commercial property of 83 self-contained units all let on short-term leases. And it wanted to finance another large commercial multi-let project, repeating its proven operating model.
“Working seamlessly with our strategic partner, we gained a deep understanding of the client’s needs and end-goals, which was crucial to the success of the case,” said Gavin Seaholme, head of sales at Shawbrook Property Finance.
“This existing Shawbrook customer’s proven operating model has been successful throughout the pandemic and we are happy to support their continued investment journey,” he added.
Danny Churchill, owner of Pure Funding Solutions, said: “This is an outstanding effort by all involved — from initial discussion to presenting to the complex deal forum through to credit sign off.”
MFS backs Surrey office development
Market Financial Solutions (MFS) has delivered a £2.9m loan on an office building in Surrey.
The rate was 0.95 per cent and the LTV 70 per cent, which the lender noted was among the highest LTVs currently available for commercial bridging.
The broker required a fast turnaround for their client who risked missing a pre-arranged deadline and losing their deposit on a deal because the existing lender was delaying.
MFS arranged a valuation within 48 hours of receiving the case and the bridging loan was deployed three days later.
“We successfully secured two funding lines totalling £350m at the beginning of the year. Since then, we have been inundated with enquiries from residential and commercial clients in need of fast, tailored bridging loans,” said Paresh Raja, chief executive at MFS.
The lender relocated to a new office in Mayfair, London, in March, as part of its plan for growth in 2021.
“I expect similar cases in the coming weeks. The property market is alive with activity, however many lenders are not in a position to address complex cases with pressing deadlines. I anticipate demand for bridging loans to rise,” Raja said.
Paragon Bank provides £3.2m
Paragon Bank has provided at £3.2m funding facility to Brookland Group to support development of 13 homes in Derbyshire (pictured).
The funding will be used in multiple phases of the Woodfield Road development in Hartshorne, which comprises two, three, four and five-bed houses for first-time buyers and families. The developer expects to break ground in April and complete the project next spring.
“This is our second development with Paragon Bank and we have always been impressed with how efficient and straightforward the bank is to deal with. They always deliver on their commitments,” said Simon Dawson, director at Brookland Group.
Oli Thompson, relationship director at Paragon Bank said: “We see this development having wide appeal because of the quality of homes and attractiveness of location.
“Small and medium size developers such as Brookland are vital to supplying housing and we are committed to working with them to provide finance for these developments.”
Glenhawk completes first loan in Scotland
The six-month bridge was provided to a limited company where the owners were trustees of a UK Trust and needed to refinance an existing mortgage from a private bank.
The case was introduced by Malcolm Scanlon at Zion Specialist Finance.
Glenhawk received legal advice from Wilson McKendrick for the refinance and law firm Brechers acted on behalf of the UK Trust. The loan was completed in six weeks.
Nick Hilton, managing director at Glenhawk (pictured), said: “Growing our footprint outside of the South East is a strategic priority for Glenhawk in 2021 and with the infrastructure now in place, we look forward to building on this milestone.
“We were able to take a cross-jurisdictional loan and turn it around in a short space of time, saving the borrower time and hassle and demonstrating the critical role that specialist lenders play in the UK real estate ecosystem.”
Malcolm Scanlon, lending director at Zion Specialist Finance, added: “Glenhawk demonstrated its expertise and professionalism right from the outset, agreeing the initial terms in a very short space of time, despite the loan size and location of the asset.
“The team was very quickly able to get comfortable with the structure required to fund the deal with the UK Trust in place, ensuring they used two sets of solicitors to cover the location of the asset and the trust which fell under English law. Led by Amy Wareham and Peter Turner, the whole Glenhawk team played their part in ensuring this deal was brought to completion.”
West One and Castle Trust expand distribution, Roma added to sourcing – round-up
Users of the sourcing system will now gain access to Roma’s bridging, standard residential and commercial products.
Nick Jones, commercial director at Roma, said: “Partnering with innovative sourcers like Twenty7Tec is a natural progression for us.
“Using technology to enhance the initial decision making process around product selection allows the Roma team to concentrate on the more subjective decisions as the case progresses, acting with flexibility and customer centricity.”
Nathan Reilly (pictured), head of lender relationships at Twenty7Tec added the firm was delighted its users would be able to source Roma Finance products.
West One and Castle Trust added to club panels
TMA Club has added West One Loans to its panel, giving its members access to the lender’s buy to let products.
Lisa Martin, development director at TMA, said: “Welcoming West One to TMA’s expanding buy-to-let panel reiterates our ongoing commitment to providing landlords with the best proposition and highest level of support.”
Meanwhile, Castle Trust Bank has joined Legal and General Mortgage Club’s panel, opening up its specialist range to the club’s members.
This includes Castle Trust Bank’s holiday let, portfolio, homes in multiple occupancy and ex-pat offerings.
Danny Belton, head of lender relationships at Legal and General Mortgage Club, said: “Castle Trust Bank is another great addition to the Legal and General Mortgage Club lender panel.
“I am looking forward to working in partnership with the Castle Trust Bank team to provide our members with access to its specialist lending proposition.”
Octane Capital funds mixed-use ownership transfer; Castle Trust Bank delivers hybrid loan
Shares in the site were transferred to two limited companies comprising of 60 tenancies and 40 titles that had been held by the same managers for 25 years.
Nick Harrison, founder of commercial broker Bespoke Business Finance, said: “This ended up far more complicated than originally anticipated with a share purchase agreement involving numerous shareholders, a highly complex security structure and three sets of lawyers.
“In my eyes, the transaction would never have got over the line without Octane’s expertise.
Alex Tyrwhitt (pictured), head of structured finance, Octane Capital, added: “Nick Harrison and Martin Lee of Bespoke showed their quality and experience as ever by working day and night to ensure all parties and professionals were on track, informed and motivated to see the deal through to a successful completion.
“In addition, Simon Noonoo and the rest of the team at Seddons were absolutely crucial in getting this labyrinthine deal over the line.”
Castle Trust Bank completes £9.6m hybrid loan
Castle Trust Bank has completed a £9.6m development exit loan with a combined serviced loan and bridge.
The lender worked with brokerage Sirius Property Finance to enable the client to secure the loan on a block of 69 one and two-bedroom apartments in a five-storey commercial to residential conversion.
The project was constructed under permitted development and the owner plans to sell some of the residences and let the remainder.
The loan has been split between a bridging loan on the properties which will be sold alongside a five-year fixed rate loan with serviced interest on the properties which will be let.
The bridge will convert to a serviced loan after nine months to allow the client to de-leverage the loan or service the debt.
The development has been valued at £13.2m and the loan to value (LTV) was 73 per cent.
Rob Oliver, sales director at Castle Trust Bank, said: “This case is an excellent example of the type of bespoke deal we are able to structure at Castle Trust Bank.
“The client wanted the flexibility to sell some of the units but also a sustainable solution that would allow them to retain the majority of the units for ongoing income.”
Nicholas Christofi, managing director at Sirius Property Finance, said: “It’s always a pleasure to work together with a lender on a deal like this, which is structured to give a client exactly what they need.”
Foundation Home Loans cuts rates and Masthaven revises bridging range
Across its residential range, the two-year fix at 65 per cent loan to value (LTV) has been cut from 2.99 per cent to 2.89 per cent and the 75 per cent LTV offering has been reduced from 3.29 per cent to 3.19 per cent.
The five-year fix at 65 per cent LTV has reduced by 10 bps to 3.39 per cent while the 75 per cent LTV product has been cut to 3.54 per cent from 3.69 per cent. These products have a £995 fee.
Its fee-assisted remortgages have also seen reductions including the five-year fix at 65 per cent LTV which has gone down from 3.99 per cent to 3.59 per cent.
These products come with a reduced £595 fee, no application fee, a free standard valuation and £250 cashback.
For buy-to-let borrowers, the lowest two-year fixed rate is the deal at 65 per cent LTV which now has a rate of 2.89 per cent, down from 3.09 per cent.
George Gee, commercial director at Foundation Home Loans, said: “We have taken this opportunity to make our ranges even more competitive for both landlords and residential borrowers, by cutting a number of our two and five-year fixes by up to 50 basis points.”
Gee added: “In the residential range particularly, this is an opportunity for advisers who are seeing an increasing number of clients with complex income or multiple income sources, and the self-employed who may have only one-year accounts, to find competitively priced mortgages combined with flexible criteria.
“Landlord borrowers will also benefit from cuts to various products including our remortgage specials, our early remortgage offering, and those seeking large loans.”
Masthaven makes changes to bridging range
Masthaven Bank has revised its bridging range with the addition of refurbishment products and mini bridges.
The refurbishment range includes a heavy refurbishment option with tailored pricing for different projects.
There is also a mini bridge product for loans between £200,000 and £300,000, designed for smaller borrowing amounts which need to be deployed quickly.
Alan Margolis, director of bridging at Masthaven, said: “During the pandemic, bridging has been a vital tool for homebuyers looking to complete purchases quickly, but responsibly.
“As we navigate a third national lockdown and enduring economic uncertainty, adapting our product offering is vital.”
“At Masthaven, we want to respond positively to changes in the market and rising demand. These latest updates to our bridging range will allow us to be competitive in the market and offer great service as we work collaboratively during this challenging time,” he added.
Hope Capital £1.6m bridge salvages pig farm conversion
The loan has a term of 12 months and was needed quickly as the client had secured three pre-sales for the first quarter of 2021.
The development had been given planning consent for the conversion but potential asbestos contamination and legal issues such as right of way consideration needed to be resolved before it could proceed.
Hope Capital’s quantity surveyor investigated the site which led to the approval of the loan.
Jonathan Sealey, CEO of Hope Capital, said: “At times, we are presented with cases which are both complex and require a bridging loan almost immediately. As a result, we often require the support from multiple parties to ensure we can achieve the outcome the client is looking for.
“Owing to our fantastic relationship with our friends at Watts, Bespoke Property Finance Consultants and Freeths, we were able to work together to deliver the best solution to the client.”
“This is a fantastic example of how having an outstanding relationship in place with other parties, can be extremely beneficial to a borrower who needs to receive capital as soon as possible,” he added.
Chris Johnson, managing director at Bespoke Property Finance Consultants, added: “While there is no doubt it was a very difficult transaction to manage through to completion, it is a relationship with a lender like Hope Capital, which ensures we can deliver what the client wants.”
MT Finance and Crystal help borrower avoid £400k penalties with 10-day bridge
The £1.66m loan was provided to a borrower who had exchanged on the purchase of a £4m detached seven-bedroom home. The initial lender withdrew the funding terms without notice, leaving the applicant at risk of being charged with penalties of over £400,000 if completion did not meet the deadline.
The bridge was offered at 0.65 per cent per month on a 12-month term, with the option to redeem earlier with no fees.
The deal was completed under MT Finance’s new regulated bridging division. The arm was launched in January and is headed by Raphael Benggio who previously worked as underwriting manager at Masthaven for four years.
Jason Berry, group sales and marketing director at Crystal Specialist Finance, said: “The move by MT Finance into the regulated short term finance space was warmly welcomed by the market.
“It is great to experience the service standards and excellent customer outcomes we have witnessed the MT team deliver throughout 2020 for unregulated solutions extend seamlessly into their regulated bridging offering.”
Tomer Aboody (pictured), director at MT Finance, added: “The client needed us to move quickly to secure a residential purchase and the looming penalties were undoubtedly causing unwanted stresses.
“When Crystal presented the opportunity to us it was clear that extremely sound security was being offered at a relatively low LTV of 41 per cent from very credible applicants. I was therefore delighted our team could step in to offer a solution quickly.”
He said: “Our solicitor, surveyor, and of course Crystal, then worked tirelessly to ensure completion occurred in advance of the deadline. A great team effort all around.”