Catalyst Property Finance targets £500m loan book
Speaking to Specialist Lending Solutions, chief executive Chris Fairfax (pictured), said that within that £500m target it is setting its sights on non-construction bridging, ground-up development finance, construction bridging, and buy to let, at £100m to £150m each.
Fairfax said that buy to let is a vital component of this as it needs less origination.
“Short-term lending is hard work, you have to originate every 12 to 18 months because your loans, hopefully, have redeemed. Buy to let allows us to achieve some of our strategic goals,” he said.
The lender entered the buy-to-let space earlier this month, with rates starting from 3.74 per cent and up to 75 per cent LTV available, including those with cash-out.
Fairfax said that brokers and consumers they had spoken with said that they wanted “less restrictions on property”.
He pointed to several underserved areas, which include no exposure limits on multi-unit blocks (MUB), mixed use property, no restrictions on the number of bedrooms in houses in multiple occupation (HMO) and holiday lets.
Citing the typical market minimum at 125 per cent, Fairfax said that another opportunity would be less constrained by income variations, as its interest coverage ratio calculations are from 100 per cent of the pay rate.
He added that unlimited top-slicing was also available for high-net-worth individuals, and that the firm also has wide eligibility on adverse credit and different kinds of company structures.
“The feedback we’ve had from brokers so far is that there’s a place for it, but obviously they’d like it to be cheaper in terms of its interest rate. Ultimately, we have to find the right balance. We want to fund the right opportunities where it’s right for the borrower and right for us,” Fairfax said.
“We recognise our rates are higher, but we serve a market where there is a clear benefit in acquiring or refinancing because of either the yield or the capital.”
The firm issued £15m in agreements in principle on the first day that it launched its buy-to-let offering.
Fairfax continued that CPF currently has eight staff working on buy to let, who have been trained across bridging and buy-to-let too in case of a “big inflow of more kinds of business they can adapt.”
Catalyst is aiming to bring longer-term fixed buy-to-let products to the market, and is also considering green mortgage products.
Catalyst enters buy-to-let market
Its boost to let product rates start from 3.74 per cent and is available up to 75 per cent loan to value (LTV) including those with cash-out. It is also available up to 80 per cent loan to cost for purchases.
Those on the lender’s major distributor’s panel earn 1.5 per cent commission, brokers are eligible for one per cent commission. The arrangement fee is two per cent.
It has a 100 per cent interest cover ratio (ICR) and allows unlimited top slicing for high net worth borrowers.
It is eligible for complex property types, including high value single assets, holiday lets, student lets, low yield assets, ex-local authority, multi-unit freehold blocks with no exposure limits and houses in multiple occupation (HMO) that have unlimited bedrooms.
Mixed use property can also be used with the product up to 75 per cent LTV.
Chris Fairfax (pictured), chief executive at Catalyst, said it was excited to launch its first buy-to-let product and bring the company’s “can-do lending approach to the buy-to-let market”.
He said: “We have built a fantastic team of property finance experts who are ready to support our major distributors and brokers with a product that has extremely strong demand.
“Buy to let is a natural progression for Catalyst and sits well with our bridging, refurbishment, and development finance ranges. This is not mass market; it is solution driven focused lending that boosts both borrower eligibility and the brokers ability to help more clients.”
Catalyst enters development finance market
The development finance product allows borrowing up to 95 per cent loan to costs (LTC) including interest or 75 per cent loan to gross development value (LTGDV) with annual interest rates starting at 7.95 per cent per year.
Catalyst currently offers bridging, development exit, auction and refurbishment bridging loans.
Chris Fairfax (pictured), Catalyst’s managing director, said the company’s entrance into development finance was in many ways a “natural progression” as it was already an established lender in refurbishment bridging and development exist finance.
Fairfax continued that strong demand exists or a 95 per cent LTC product for residential and mixed-use schemes and this combined with its competitive rates and “can-do” attitude would make their offering attractive.
At first, Catalyst will focus the lending on the South with sites in Berkshire, Bristol, Buckinghamshire, Devon, Dorset, Hampshire, Oxfordshire, Somerset, Surrey, West Sussex, and Wiltshire.
“We will roll-out to the rest of the UK in the future,” Fairfax said.
Tom Clark, intermediary at Napex Finance, said: “As a business, Napex have hugely enjoyed our relationship with Catalyst since they entered the market.
“They continually bring to market products that are needed and not just copying the rest. This development product delivers in four key areas for us that will be useful to our clients and is much needed in the market.”
MFS cuts bridging rates and Catalyst relaunches Proctober initiative – round-up
It will offer a rate of 0.95 per cent for commercial loans at 60 per cent loan to value (LTV) and 1.09 per cent for commercial loans at 75 per cent LTV.
This is down from 0.99 per cent and 1.15 per cent respectively. These changes also apply to its semi commercial range.
It has also improved its second charge loan rate, with loans at 50 per cent LTV priced at 0.89 per cent, down from 0.99 per cent.
For loans at 60 per cent LTV rates have fallen from 1.15 per cent to 1.09 per cent, and for 70 per cent LTV loans have fallen from 1.25 per cent to 1.19 per cent.
MFS chief executive officer Paresh Raja (pictured) said that at the end of the stamp duty holiday the property market would go through a period of transition until the end of the year.
He said: “For MFS, we always want to ensure our products are a perfect fit for where the market demand is – we are seeing increased interest in commercial and semi-commercial investments, as well as for larger loans, so we have improved our offering in these areas.”
Catalyst Property Finance reintroduces Proctober initiative
Catalyst Property Finance has relaunched its Proctober initiative, which pays enhanced bridging proc fee along with a donation to Motor Neurone Disease Association.
The proc fee is 2.25 per cent, up from regular proc fee of two per cent, and brokers need to submit enquiries to the lender in October and the enhanced fee will be automatically added. The loan must fund by 24 December
The lender launched the campaign last year, with donations going to Hope for Food.
Catalyst Property Finance’s chief executive Chris Fairfax said: “Following the success of last year’s Proctober campaign, we’re excited to give bridging brokers another boost this autumn.”
Catalyst Property Finance hires sixth relationship manager from Paragon’s Iceberg
Griffiths will take on the role of client relationship manager and oversee origination of loans, structuring, pricing lending terms and building customer relationships.
He was most recently an account manager at Iceberg, a division of Paragon Bank that provides commercial funding and asset finance to the SME market.
Prior to that he worked at Savills as an agent network manager for nearly six years and before that worked at Health-on-Line in life insurance sales for just under five years.
Catalyst Property Finance’s new business head, James Farge, said: “The recruitment of Lee into the new business team at Catalyst was an easy decision to make. He had previously worked with Sam and Josh, who have established themselves as top performers at Catalyst, and Lee came highly recommended by them both.
“I am looking forward to working closely with Lee as he further enhances our ability to originate quality business, in what is, a very competitive market.”
The lender’s intermediary relationship managers include Josh Hawker, Stuart Heavens, Oliver Jenkins and Andy Keeher.
McGonigle and Fairfax become individual owners of Positive Lending and Catalyst
The pair and their families jointly founded Positive Lending as a specialist packager and distributor in 2009, with Catalyst then formed as a bridging lender in 2017.
McGonigle has now taken full ownership of Positive Lending where he is chief executive, while Fairfax has become the owner of Catalyst Property Finance and remains CEO.
Growing residential and buy to let
McGonigle told Specialist Lending Solutions the change removed any question about conflicts of interest and noted there was now capacity for Positive Lending to expand its operations.
“Business will continue as usual although we are already growing areas and will continue to do so in the residential and buy-to-let first charge space,” he said.
“As Catalyst staff are no longer in Positive House we have the capacity to grow our team numbers with the additional space as we continue to grow market share in the broker arena.”
The pair had largely been responsible for the firms they have subsequently taken over since Catalyst was launched to reduce the perception of conflicts of interest, McGonigle explained.
He continued: “Since the lender’s inception I held true to those values and ran Positive Lending transparently, allowing Chris to focus on the lender’s proposition.
“Chris will testify that any business received from Positive Lending would have been hard fought for and been best for that client.
“By removing myself from the lender I can continue to ensure that every client will get the best service and product placement from my team and the market can be under no illusion that no conflict exists, or ever did,” he added.
Launch into new markets
Meanwhile, in a statement Fairfax said Catalyst was being funded by a combination of institutional and private capital, with the lender set to launch into new markets later this year.
Catalyst has provided more than £250m of short-term funding to date and has a loan book exceeding £100m.
Fairfax said was absolutely delighted to have completed the acquisition of Catalyst.
“After spending over a decade as a specialist finance broker, I launched Catalyst by compiling everything I learned from working with other lenders, good and bad, to create a business I would have loved partnering with as an intermediary,” he said.
“I believe truly understanding the intermediary perspective and my broad experience of the market are key reasons as to why Catalyst has experienced the amazing growth trajectory to date.
“Looking to the future, we will continue to serve short-term mortgage customers and intermediaries well, and look forward to expanding to other areas of property lending over the coming months.”
He added: “I would like to thank Paul for his contribution to date and I wish him well for the future success of Positive Lending.”
Catalyst increases refurb allowance to 100 per cent of value
The lender made the move in response to a number of “credible” bridging queries it received which were above its previous 75 per cent limit, Chris Fairfax, managing director said.
Fairfax (pictured) added: “This, combined with the performance of our existing refurbishment loan portfolio, presents a clear opportunity for us to support an increase to 100 per cent of day one value.
“In turn, this opens up more opportunities for intermediaries and their property clients.”
He said: “As 2020 comes to an end, Catalyst wants to further support the UK’s property sector as best we can, with a view that we all hope 2021 will be a more stable and prosperous year.”
Avamore and Catalyst make broker-facing hires
Avamore has hired Danielle Evans from Precise Mortgages as its fourth relationship manager.
Evans has 11 years’ experience in lending having previously held business development manager roles with Precise, Aldermore and Coventry Building Society.
She will be based in Leicestershire with a focus on developing relationships further among intermediaries in the East Midlands.
The lender said the hire was to develop dedicated and enhanced service levels for brokers outside of southern England.
Avamore has already hired a pair of originators and two new underwriters this year and said it was on course to match its 2019 lending volumes.
Avamore principal Amit Majithia said: “We are excited to have Danielle on board. The strength and depth of her relationships – particularly in areas where Avamore has not historically had a strong presence – will be invaluable to the company.
“We have ambitious lending targets and Danielle will play a crucial role in helping us to meet them.
“Danielle truly has a people focused approach and her personal ethos and attitude reflects exactly what we want to portray in the market, being customer-focused and solution driven in whatever we do.”
Evans added: “I am most looking forward to making an impact on the growth of the business and adding value to the team through my previous experience and relationships.”
Meanwhile, Catalyst has made a trio of appointments in its new business, credit and underwriting teams.
Andy Keehner has joined as a new client relationship manager having previously worked at Cynergy Bank, Oblix Capital and United Trust Bank.
Corey Wong (pictured left) has been appointed as a credit analyst joining from Nationwide Building Society where he had five years’ experience in mortgage underwriting.
And Fiona Collins (pictured right), who previously worked in the new business team has moved into a full time credit analyst role.
Catalyst Property Finance CEO Chris Fairfax said with records enquiries, applications and completions over recent months the lender needed to expand its team.
“Both Andy and Corey bring great skills and experience that will further bolster our teams,” he said.
“Fiona has worked with our new business team for over a year and we have been blown-away by her organisation skills; she will continue to support our intermediary contacts and their clients further along in their lending journey.
“We have a number of exciting initiatives launching in 2021 and, for that, we need a strong team of great people.”
Catalyst increases bridging LTVs across range
The lender will increase its maximum second charge bridging LTV to 70 per cent from 65 per cent, while standard bridging with refurbishment is available up to 75 per cent market value.
The maximum LTV of purchase price on below market value (BMV) transactions has been increased from 80 per cent to 90 per cent.
And deals for complex bridging or borrowers with adverse credit have been increased to 65 per cent LTV.
Catalyst Property Finance CEO Chris Fairfax said: “We are increasing LTV leverage for second charge lending, below market value transactions, complex bridging and adverse credit borrower products.
“Our aim is to open up more opportunities for brokers who introduce complex cases, have borrowers with previous credit issues and BMV purchases.
“We’ve decided to launch these improvements during our Proc-tober incentive so intermediaries can take full advantage of our 2.5 per cent proc fees.”
Catalyst boosts proc fee and pledges charity donation
In initiative means all new enquiries submitted to Catalyst in October that fund before the winter break will qualify for a 2.5 per cent proc fee instead of the standard two per cent rate.
The lender will also make a charitable donation as each loan completes.
Chris Fairfax, chief executive at Catalyst Property Finance, (pictured) said: “Catalyst is giving bridging brokers a boost. Over 2020, Catalyst has been in the incredibly fortunate position to continue to grow our lending book and our market share.
“Now, we want to encourage new intermediaries who have yet to try the Catalyst experience to do so and, of course, we want to give an extra autumn boost to our existing and valued intermediary partners.
“Proc-tober is an initiative designed to encourage more brokers to experience the Catalyst way of lending and to raise money for a very worthy cause.”