Selina Finance obtains funding and cuts rates
The lender said this would allow it to potentially launch new product types and would boost its lending capacity.
Wider strategy changes
As well as the new funding facilities, the lender has appointed Harriet Merriman as business development manager (BDM) to enhance its broker support. She will be responsible for the lender’s key master broker accounts across the South of England and Wales. Merriman joined from Central Trust, where she was for six years, most recently as southern BDM.
The lender has also reduced rates across its range and changed its credit bureau from Experian to Equifax, which it said would enable it to automate decisioning and underwriting.
Selina Finance offers a home equity line of credit (HELOC) product that sits alongside a borrower’s existing mortgage over a two- or five-year period. This is available up to 85 per cent loan to value (LTV).
The lender has been revising its proposition in recent months, including the introduction of pre-consent funding on its second charge mortgages. This is available on loans of up to £100,000 where the first charge loan is taken out with a specified lender.
Darvish Heshejin, VP of growth at Selina Finance, said: “I’m delighted to announce the transition of our funding structure and the reduction of our second charge mortgage rates. We’re more confident than ever with our product, service and technology proposition, and look forward to growing with our partners in 2024.”
James Cuby, managing director at WAM, added: “We’re absolutely thrilled to announce our new partnership with Selina in their effort to empower UK homeowners with low-cost, tailor-made loans.”
Ian McLaughlin, CEO at Vanquis Banking Group, said: “We’re delighted to have entered a funding partnership with Selina that offers innovative consumer-secured loans, as we continue to develop our own secured lending ambitions in markets less-served by mainstream banks.”
Blend secures £50m-plus bridging funding line
The lender says that the bridging funding line would allow it to bring out new bridging products and showed the firm’s “rapid and consistent development” since it was founded in 2018, as well as its “strong track record”.
Blend said that the funding is added to its existing family office-backed and institutional funding. The company had previously secured £120m in committed capital from six large family offices to boost lending for small-to-mid-sized developers.
The company added that it had had a record quarter of lending in Q4 2023, which included funding a variety of property development schemes. This covers high-end and affordable schemes across the country.
Yann Murciano, CEO at Blend, said: “At Blend, we have the appetite to support quality developers in all market conditions. We appreciate many developers have faced a challenging market environment over the past 18 months.
“Consequently, sales have been slow and exits have taken longer than initially expected and planned. Many developers we speak to have had their development loan facilities expired and are under increased pressure from their lenders, who are experiencing lender fatigue.
“We are keen to support those developers by stepping in to help them carry their projects to a point where they can achieve their sales targets instead of having to sell at a discount or accept any offer just to exit.
“At Blend, we’ve built a reputation for being a through-the-cycle lender, a lender who understands the development process and the challenges that come with it. So, we’ve built a product that answers the needs of developers, and we are very excited about this new institutional funding line that’ll increase our dry power to continue supporting developers.”
Blend has been growing its team, appointing Claire McGirr as its head of portfolio management and Duncan Armstrong as its portfolio asset manager.
LLLE 2024: Later life lending market ‘started year in a really good position’
Speaking at the Later Life Lending Event, Andrew Gilbert (pictured), products director, Legal and General Home Finance, said interest rates were “really up there as a key driver of both the state of the economy and I think therefore what we can do in later life lending”.
He continued that since October gilt rates had peaked at around five per cent and had come down around 100 basis points going into mid-January.
“I think we started the year in a really good position, we’ve seen quite buoyant business from advisers and we’ve seen rates that are very competitive, however, we really are dependent on interest rates, which is outside of any of our control,” he said.
He added that rates had picked up slightly since mid-January, and they may continue to go up in the near term but said that he hoped that it was “not a sustained position” for this year.
“We know that [increase] came on the back of inflation, which was 3.9 per cent and went up to four per cent and caused massive panic in the investment markets, but my personal belief is that the market was somewhat betting against Andrew Bailey and the Bank of England in what they believed was going to happen with interest rates this year.
“They were predicting three maybe four cuts from about May-time whereas the Bank of England was saying don’t expect cuts anytime soon, don’t expect it [cuts] in h1. I think the market was betting against it,” Gilbert explained.
He continued that data coming out around inflation, employment and retail sales hinted at a “bit more risk” and the “market hates risk”.
“It spooks the market in the short term. I hope that isn’t something that sustains and [gilt] rates do come down to the 3.5 to four per cent level as that will make…it a lot more attractive than if they’re four to 4.5 per cent and a half percent. So, my hope and belief is that that’s a blip and that the market will stabilise,” Gilbert noted.
Higher later life lending LTVs starting to return
Ben Grainger, partner, financial services, Ernst & Young, said that there was a “strong link between interest rates and the loan to value (LTV) the lenders are willing to offer”.
He explained: “That’s because if you look at it from an investment perspective, the higher the rate, the faster that mortgage rolls up, and the more likely you’re going to be exposed for the foreclosure on that property.
“So, what we’re seeing is as rates went up, the LTV started coming down a little bit, so that’s kind of one side of things making this product a lot harder for people to invest in. On the other side, the main investors and funders of the equity release market are insurance companies and as interest rates increase for insurance companies their ability to store liabilities has increased significantly, so it’s almost like we’ve got two opposing forces going on.
“[For] insurance companies and the investors in the space, demand has doubled but the amount of returns and the volume of that is shrinking.
He added: “We can hope that those things can offset each other to an extent, and we are seeing LTVs creeping up a little bit compared to where they were last year. “
Gilbert said that historically for funders, lifetime mortgages have had four benefits. This includes them yielding a greater return than a corporate bond, being relatively low risk, their ability to offer diversification against other default-based assets and long duration profiles.
“Now, from the funders’ perspective, the excess returns the low risk are probably a little bit more under pressure than they have been in the past. There’s slightly less upside opportunity from those, but diversification and long duration profiles remain true.
He said demand for annuity sales hit the highest they’ve ever been last year, certainly in living memory.
He added that there were also “bulk pension purchases” which was a “very buoyant market last year” and would likely continue in the next decade, and all this together means the “supply of funds to invest in equity release remains strong”.
“The benefits are still there, funders would still like a return on them and that’s been slightly compressed, but they’re still a good attractive asset, and as I say that diversification and duration point remains strong so it certainly should be a good year from a funding perspective to the sector.”
Grainger added that the “fundamentals of the market haven’t changed and therefore it should remain an area that insurance companies will want to allocate their resources”.
He continued the market was starting to see fresh thinking on the product and therefore creativity on the funding side of things.
“Innovation has flipped [towards] how can we innovate our funding models and our products to offer higher LTV to customers,” Grainger said.
CapitalRise obtains £250m bank funding line
The latest funding line is the fifth and biggest secured by CapitalRise to date.
The company says the funding will allow it to offer fixed pricing for UK limited company borrowers and provide “greater cost certainty” to customers.
Further details of its fixed rate offering will be confirmed in the coming months.
CapitalRise was founded in 2016 and has backed property developments in prime Central London, prime Outer London and prime Home Counties to the value of £859m.
The company said that demand has been strong from borrowers, leading to strong loan book growth.
It continued that by diversifying and strengthening its funding lines the company can meet this demand and offer “flexible, bespoke lending solutions” to the “exclusive corners” of the UK property market.
Uma Rajah, CEO and co-founder of CapitalRise, said: “A diverse range of funding lines support the growth of the business and provide us with a resilient and varied capital base. Securing a facility of this scale and nature is a great new addition to our existing partnerships.
“It is a testament to our depth of expertise and strong track record in this specialist area of the real estate market. We continue to grow the team too, bringing new talent into nearly every department of the business. Combining this new funding line with increased capacity within the team enables us to turbo-charge our growth and serve increasing numbers of borrowers.”
Lee Francis, head of origination at CapitalRise, said: “This new facility will enable CapitalRise to continue responding to demand and offer greater volumes of funding for projects in the best locations.
“Our specialised sector expertise and robust lending practises have allowed us to keep our door wide open to new enquiries, at a time when many other lenders are retrenching from the market.
“This additional lending capacity and the introduction of fixed pricing also provides cost certainty for borrowers during times of volatile interest rates, and further solidifies our position as the lender of choice for prime property finance in the UK.”
Pip Lashko-Sayers, associate director, capital markets at CapitalRise, added: “We operate a multi-funded model and retain an ambition to diversify both our capital sources and product range even further to support a wider range of borrowers. Our door remains very much open, and we are always keen to discuss new institutional funding lines to supplement the considerable existing capital resources.
“The sectors that we focus on – prime Central and Outer London, and the prime Home Counties – continue to buck trends seen in the wider UK property market, as the prime sectors run on an entirely distinct cycle. There remains a vast range of attractive investment opportunities in our target markets that we are keen to support, particularly with enhanced tools and resources at our disposal.”
Together grows HABS warehouse funding facility and hires CIO
The funding facility was launched in 2018 to fund the origination of small balance commercial real estate loans to mainly support small and medium sized businesses and commercial property investors.
The maturity has been extended to December 2027 and a new bank has been added to the facility.
It comes after the lender priced a £443m first-charge only residential mortgage-backed securitisation (RMBS) in September and a £425.5m securitisation in June.
The lender’s funding consists of ten public securitisations, six private securitisation facilities, two series of senior secured notes, and a revolving credit facility.
Gerald Grimes, group CEO designate of Together, said: “We are delighted to announce the successful upsizing and extension of our HABS warehouse facility, as we continue to shape our business for the future and support the UK’s SMEs in realising their ambitions.”
Gary Beckett, group managing director and chief treasury officer at Together, added: “We have now raised or refinanced over £2.0bn of facilities during 2023, as we continue to deliver on our growth ambitions. We would like to thank our funding partners for their continued strong support for Together.”
Together appoints CIO
Together has hired Paul Luke as its chief information officer, where he will assume responsibility for group technology services.
He will oversee the day-to-day processes and technology improvement.
Luke has over 20 years of experience in financial services and has held senior positions in financial services companies including at Capita and Co-op Insurance.
John Barker, group chief operating officer at Together said: “At Together, we are committed to building an expert senior team to guide us forward, and Paul’s appointment reflects that. He brings a wealth of experience to the role and will be a true asset to our company; it’s with great pride that we’ve been able to appoint someone of such high calibre.
“Through experts like Paul, we are able to work efficiently to help our customers and partners achieve their property ambitions. We are continuing to work towards our vision of becoming the UK’s most valued lender.”
Luke added: “I am really looking forward to joining the Together group, I can see what an amazing culture the business has, and I can’t wait to be a part of it.
“It will be great to able to share some of my experience with the team, but also to take on the challenge of learning about a different area within financial services, and supporting the delivery of a really exciting vision and change agenda over the coming years.”
Propflo awarded £860k to develop retrofit-as-a-service proposition
The funding for Propflo is part of a £5m two-phase programme on Net Sero Heat that will run until March 2025. The focus of the project is to develop Propflo’s portfolio AI insights and link these to its retrofit one-stop shop GreenVal and engagement platform HomeHub.
The aim is for lenders, brokers and estate agents to have all retrofit resources and support in one place, so the process can be streamlined and joined-up.
A key aspect of the project will testing a model for brokers, with Habito the first mortgage broker to launch a retrofit tool, GreenVal. It will be its primary partner testing the end-to-end solutions.
Other partners include Action Net Zero, Propcert, Glow Green and Aico Homelink.
Luke Loveridge, founder and CEO, Propflo, said: “The UK’s £200bn retrofit challenge is a national priority; not only to meet our legally binding carbon targets and reduce energy bills, but to ensure our national energy security, improve health outcomes, and boost affordability in the housing market.
“This collaboration between innovative partners will elevate Propflo’s retrofit solution, making it the most sophisticated option for lenders, brokers, and agents.”
In May, Mortgage Solutions reported that Propflo has been awarded its initial Innovate UK grant to work with lenders to help them adopt a “joined-up portfolio approach to energy efficient retrofitting”.
Lendco signs £250m warehouse funding line deal with Santander CIB
Lendco said that the facility will support its growth plans, especially scaling its buy-to-let proposition.
The company’s loan book is nearing £1.5bn, and application volumes in Q4 have exceeded £200m.
Adrian Scragg, director of treasury, capital markets, and ESG of Lendco, said: “This is another important step on our journey to further scale and optimise our funding platform as we position ourselves for a strong 2024. This caps a fantastic year for the team, where we have succeeded in raising over £1.1bn.”
He added: “We are proud to have built a number of strong, long-lasting relationships with our funding partners and we are really excited to begin our relationship with the Santander CIB team – we appreciate the belief they have shown in Lendco and look forward to working with them for a long time to come.”
Kensington Mortgages prices £548m residential mortgage securitisation
The deal, Gemgarto 2023-1, is the first securitisation for two years and contains owner-occupier, high loan to value (LTV) loans originated by Kensington and aims to de-risk a portfolio of mortgages from Barclays’ balance sheet rather than to raise funding for the business.
Barclays will retain the senior notes of the securitisation and Kensington Mortgage said that the reception from the markets was “strong from the beginning of the process”.
Alex Maddox (pictured), capital markets and digital director, Kensington Mortgages, said: “This deal is a successful first public trade for Kensington under Barclays’ ownership; we have managed to attract significant and granular orderbooks, with depth and variety of the investors involved.
“This demonstrates a continued level of confidence from investors in the Kensington platform. The strong position we have built over the years in the UK RMBS market has helped us print an excellent transaction, pushing spreads across mezzanine notes to their tightest levels since April 2022.”
MT Finance and Triple Point strike £30m corporate revolving credit facility deal
The facility builds on the ongoing partnership between Triple Point and MT Finance, which saw £8m in funding from Triple Point in 2021 to complete the management buy-out of the company.
The latest credit facility will be used to support the lenders “loan originations and continued investment in operations”.
MT Finance, founded in 2008, offers buy-to-let mortgages, bridging loans and auction finance.
Ellis Diamanti, relationship director at Triple Point Private Credit, said: “We are pleased to continue our relationship with MT Finance by providing this new facility. Having first supported the management buy-out in 2021, the business has continued to enhance its reputation as a leading property finance provider in the UK. We look forward to supporting the business’ future ambitions.”
Joshua Elash (pictured), CEO of MT Finance, added: “Triple Point has been an excellent partner to MT Finance over the last several years and we are delighted to have the opportunity to further expand the relationship. This new facility will help drive our exciting growth plans as we look forward into 2024.”
MT Finance secures £500m funding from JP Morgan
Since being established in 2008 by co-founders Joshua Elash and Tomer Aboody, the group has focused on bridging finance and the buy-to-let mortgage market.
It is believed that this latest transaction will strengthen the relationship between MT Finance Group and JP Morgan, after the previous agreement of a forward flow to support the launch of its buy-to-let mortgage offering was rubber stamped in July last year.
Ben Lawrence (pictured), the chief financial officer of the MT Finance Group said: “We are delighted to have the opportunity to further develop the already strong relationship with JP Morgan. Having experienced significant growth in 2023, this new funding line provides us with additional capacity to continue this exciting trajectory.”
Reflecting on the deal, Rob Tanna-Smith, executive director in JP Morgan’s EMEA securitized products group added: “We are pleased to be broadening our relationship with MT Finance with this new funding line. This transaction is a clear indication of the scale of MT Finance’s ambitious plans for continued growth within the specialist lending sector.