MT Finance appoints senior underwriter

We’re pleased to announce that MT Finance has appointed Cattrina Wigley as Senior Underwriter.

Cattrina joins MT Finance from Octopus Property (previously Dragonfly), where she was a Credit Manager.

Cattrina has over 14 years of experience working in the financial services industry having started her career in 2004 as a fully qualified regulated mortgage broker. Cattrina previously held underwriting roles at several specialist finance firms including Castle Trust, before joining Octopus Property in 2014.

In her new role, Cattrina will play a significant role in managing our lending process from application through to drawdown.

Cattrina’s appointment comes alongside two recent further hires of an Operations Manager and a New Business Executive.

Gareth Lewis, Commercial Director at MT Finance, said:

 “We are delighted to welcome Cattrina to the team at MT Finance. As part of our continued growth plans her experience will be greatly received, as will the knowledge she brings to the team. We all look forward to working with her.”

Cattrina Wigley, Senior Underwriter at MT Finance, said: 

 “MT Finance has a fantastic reputation within the industry. I’ve dealt with them in the past and have always been impressed with the way they work.

“As one of the leading specialist short-term lenders in the market, joining the MT Finance team is a great opportunity to further my skills and I’m looking forward to be a part of their growth plans and further success.”

 

MT Finance secures £50m funding deal from Insight Investment

MT Finance Limited (“MTF”), an award-winning specialist short-term property lender, today announces the completion of new senior and mezzanine debt facilities to enhance its lending capabilities to the UK property finance market.

MTF has raised up to £50m of senior funding from funds managed by Insight Investment alongside mezzanine funding from an unnamed UK fund manager. These new lines further diversify the funding structure of the business that currently includes a £125m committed forward-flow arrangement with a Global Institutional Investment Manager, as well as almost £100m from a portfolio of High-Net-Worth individuals.

Established in 2008 by co-founders Joshua Elash and Tomer Aboody, MTF has quickly established its reputation for providing outstanding customer service and the ability to complete loans quickly. MTF has successfully completed in excess of £200m loans in the preceding 12 months and had a record month of originations in November.

MTF’s reputation in the market excels for delivering fit for purpose bridging loans at sensible rates, and its approach to lending is something that has been consistently recognised within the financial services industry, with the company winning various sector awards including “Best Service from A Bridging Finance Provider” in the 2018 Business Moneyfacts Awards.

Joshua Elash, co-founder, said, “MTF has assisted property professionals, business owners, and individuals with their finance requirements for the last 10 years. This additional funding will enable us to continue to provide leading, competitive, and relevant products to our clients into 2019 and beyond.”

Commenting on the transaction, Jeremy Deacon, Insight Investment added,

“Our Secured Finance strategy continues to seek compelling asset-backed structures that provide our clients with attractive risk-adjusted return while capturing the complexity/illiquidity premium on offer in the private ABS market. We have known Joshua and Tomer for the past few years and they have built an impressive bridging platform underpinned by good credit and service. We are pleased to support MTF on the next stage of their journey through the provision of scalable senior funding and look forward to a fruitful relationship over the next few years.”

MTF was advised by the Financial Services Corporate Finance team at EY.

Jordan Blakesley, Senior Manager, said, “We are delighted to have assisted MTF with the debt-raising process. The support demonstrates the strength of the underlying MTF platform and will enable the MTF team to act on the sizeable opportunities they are seeing in the market.”

Lee Doyle, Matthew Pentecost, and Elizabeth Street-Thompson from the banking team at Ashurst LLP provided legal advice to MTF.

Michael Lorraine, Kathryn James, and Annabel Rolls from the asset-backed finance team at Simmons & Simmons LLP provided legal advice to Insight Investment.

Regulated bridging slows to lowest level since Q1 2015

Regulated bridging loans fell in the third quarter to the lowest level since Q1 2015, according to the latest Bridging Trends data.

The number of regulated loans conducted by Bridging Trends contributors fell for the second consecutive quarter, to 31.6% of all lending in Q3 2018, compared to 36.8% during Q2 2018.

This is the lowest level since Q1 2015, when the number of regulated bridging loans transacted was at 31.5% of all lending.

Bridging loan volume transacted by contributors hit £213.35 million in Q3 2018, an increase of £15.4 million in the previous quarter. This is the highest figure to date and comes as another new contributor joins Bridging Trends- specialist finance packager, Clever Lending.

First legal charge lending increased to 84.4% of all bridging loans during Q3 2018, up from 80.9% in the second quarter. Meanwhile, second charge loans decreased to 15.6% compared to 19.1% during Q2 2018.

For the second consecutive quarter, refurbishment purposes were the most popular reason for obtaining a bridging loan, as borrowers continued to add value to existing and newly purchased properties.

Mortgage delays were the second most popular reason for obtaining a bridging loan, accounting for 19% of all lending, down from 20% in the previous quarter.  Whilst loans for auction purchases and business purposes increased in the third quarter by 3% and 1% respectively.

The average monthly interest rate dropped to 0.78% in Q3, from 0.83% in Q2 2018- the lowest rate recorded since Q4 2016. This activity translated into lower LTVs, with average LTV levels in Q3 decreasing by 1.5% to 55.4%.

The average completion time on a bridging loan application jumped to 46 days during the third quarter from 43 during the second quarter, as service and resource levels were impacted by annual leave.

The average term of a bridging loan in the third quarter remained at 11 months.

 

 

Half of brokers see rise in bridging loan volume

Demand for bridging finance grew in the third quarter of 2018, with almost half (48%) of brokers experiencing a rise in bridging loan volume, up from 38% in the second quarter of 2018, according to our latest Broker Sentiment Survey.

A mere 17% of brokers did not experience a rise in bridging loan volume in Q3 2018.

 

Feedback from brokers points to a strong need for specialist lending. However, the geographical spread of bridging loan demand narrowed in the third quarter the year, with demand in the North West, South West, and Scotland dropping off from the previous quarter. The South East saw the biggest demand for bridging loans in the UK at 48%, up from 30% in Q2. The second highest area of demand was London, at 41%.

 

For the third consecutive quarter, funding development projects was the most popular reason for taking out a bridging loan at 31%. Business purposes was the second most popular reason at 21%, up from 16% in the second quarter of 2018.

 

However, two thirds (66%) of brokers said the bridging loan process is longer than it was 12 months ago.

 

With the majority (48%) suggesting 3-4 weeks was the average length to complete a bridging loan. While 21% indicated that bridging loan cases generally took 2-3 weeks to complete.

61% of the 113 brokers surveyed blamed solicitors as the main reason for delays, followed by the valuer at 16%.

Need for Speed

The bridging finance industry is in promising shape and demand continues to grow, particularly from property investors looking to fund development projects in London and the South East.

However, speed has always been a vital element in bridging finance and it is essential we don’t lose sight of this. It is important that all parties involved- the lender, lawyer, valuer, and the broker, move swiftly to complete to the borrower’s schedule.

It is important we stay true to the fundamentals of bridging: providing borrowers with fast access to the capital they need in a responsible and sustainable way and not fall into the more traditional computer banking model.

At mtf, we are always looking at ways to make enhancements to our processes in order to minimise transaction delays. For example, we have a team of in-house legal underwriters. This approach makes our process faster and much more efficient. The team all come from a legal background and because they each understand the legal principles of a bridging loan application, can mitigate risk as they have the knowledge and expertise to flag certain points to the attention of our solicitors. Their expertise also allows mtf to take a commercial view on certain matters, so our solicitors aren’t bogged down unnecessarily- this really speeds up the process.

For more information, or if you have an enquiry you wish to discuss, please don’t hesitate to contact the team on 0203 051 2331.

Funding business expansion in just 12 days

There have been a number of challenges for business in 2018. From economic pressures and ongoing Brexit negotiations to rising interest rates- all of which are set to create further challenges for the SME community in one way or another.

Access to finance, however, continues to be a critical challenge for UK small businesses. There is an ongoing lack of flexibility and for companies trying to react quickly to the new challenges in the market, that makes it hard for them to seize new opportunities.

Small business owners need a wider, more versatile pool of liquidity to draw from that is tailored to meet their needs. One major source of capital available and willing to fund the SME space is bridging finance.

Case in point

As an example, mtf recently completed a bridging loan for clients who were looking to raise funds to invest in their growing retail business.

On the strength of the cash flow from their first retail premises, the clients had been able to obtain a commercial mortgage for a second location. However, an opportunity had suddenly come up to purchase the premises next door. To achieve faster growth, the clients wanted to purchase both premises- expanding their storefront, as well as purchase stock for the new, larger store.

The sellers had a specific completion date which meant the clients needed to move quickly to take advantage of the opportunity and were unable to obtain a commercial mortgage in the time-frame required.

Faced with roughly a fortnight to complete the purchase, the clients needed to act quickly. As time was of the essence, they were immediately introduced to us by one of our long-standing brokers.

On receipt of the enquiry, mtf was able to give an immediate decision, and we issued the offer of loan that day. The clients needed 100% of purchase price, so released equity in their principal residence by way of a second charge to increase funding.

Given that the commercial property and the residential property now needed to be valued, it was imperative that the valuation was undertaken as soon as possible. Therefore, we instructed the valuation at the same time as going to offer. Our team then worked around the clock to ensure all the legal requirements were addressed to ensure everything was ready to be sent to our lawyers as soon the valuation report came in.

In just 12 days, mtf provided a £450,000 bridging loan spread over both assets at 65% LTV, based on the open market value of both assets. Interest was retained at 0.95% per month, over a 12-month term, with no exit fees or ERCs. No personal guarantees were required.

Our loan meant the clients were able to purchase the property by the proposed completion date- capitalising on a fantastic investment for their business. What’s more, the 12-month term gave them plenty of time to pay for the initial operating costs and purchase additional stock. The clients would then work with their broker on the exit by refinancing on the main residence and by taking out a commercial mortgage on the new premises.

The client’s broker later commented:

“This case was difficult initially as the clients had tried to secure their own funding before coming to me. With such a short deadline in which to complete the purchase, I knew I had to place the case with a lender that could perform. mtf was the obvious choice here and whilst the clients had themselves received indicative terms from other lenders at lower rates, I carefully explained that there were aspects of the case that many other lenders would not have understood which would be relevant to this case.

“It was the combination of good advice and robust performance from mtf which made the deal happen with days to spare. The new shop is now open, and we are working through the exit for the clients now.”

mtf’s bridging loan products are designed to meet the many diverse needs of business owners. As a non-status lender, we do not require evidence of trading history, accounts or proof of income, and do not require personal guarantees. This allows us to take a practical, common sense approach to lending.

To find out more, speak a member of our team on 0203 051 2331 or click here to fill out our quick enquiry form.

MT Finance hires John Charcol broker

MT Finance is pleased to announce that we have appointed a new business development manager as part of our expansion strategy.

Richard Sherman has joined from John Charcol Mortgage Brokers, where he served as Bridging and Development Finance Specialist.

Richard will be responsible for building new relationships with brokers, as well as strengthening our existing relationships. He will cover the South West and Wales region.

Richard has more than 10 years’ experience in the specialist finance sector, having previously held roles at Santander and Barclays, before joining John Charcol in 2016.

Richard’s appointment is part of a wider expansion of mtf and comes alongside three further hires of a New Business Executive, an Accounts Assistant, and a Communications Executive.

Gareth Lewis, commercial director at MT Finance says:

 “I have always been impressed with the way Richard presented applications during his time at John Charcol, not only did he produce a clear picture of a transaction, he did it with an understanding from the lender’s perspective.

“We are looking forward to working more closely with intermediaries in the South West and Wales, listen to their feedback and grow businesses in that area.”

Richard Sherman at MT Finance, comments: 

 “When I was approached by mtf, and Gareth Lewis in particular, I was very interested to hear their plans for the future. As a lender I had used many times in the past within my role at John Charcol, I didn’t hesitate to become a part of their growing company and further success.”

 

Looking to add value to your portfolio?

With mainstream lenders implementing tougher restrictions, it has been harder for landlords and investors to obtain a buy-to-let mortgage, faced with more hoops to jump through in a time-consuming process. This can hinder those requiring fast access to funds.

Furthermore, for those looking to buy properties in need of major refurbishment, the difficulty in accessing mortgages from high street banks has intensified, as banks are less likely to lend on uninhabitable properties.

Bridging finance has been able to fill this void, gifting investors the ability to make necessary renovations to enhance the value of their properties, by providing funds with speed and agility.

One of the most obvious advantages of a bridging loan is the speed at which funds can be delivered.london-zoom

Whether you’re looking to generate more rental income or add value to your portfolio, mtf is here to get your bridging loan completed in a matter of days, preventing you from either missing out on an opportunity or leaving a property sitting in your portfolio without generating returns while you wait for financing from a long-term lender.

As an example, we were recently approached by clients looking to raise funds to complete refurbishment works on two properties in their portfolio. They were unable to get a mortgage from a mainstream lender as the properties weren’t lettable in their current condition.

In just 11 days, mtf provided a £162,500 second charge bridging loan over their main residence, at 65% LTV. Interest was retained over a 6-month term, with no exit fees or early repayment charges. No personal guarantees were required.

Our bridging loan gave our clients the funds they needed to carry out the works in order to significantly increase the value of the investment properties. They then refinanced the properties with a long-term buy-to-let mortgage from a bank to exit the bridging loan against a higher value.

mtf is a non-status lender, therefore, we will take a view on CCJs, defaults, and arrears and we do not require evidence of credit history, accounts or proof of income- instead, we focus on the property and your future plans.

For many investors and developers, the difference between success and failure is being able to finance a project, a bridging loan could provide solutions and turn your aspirations into achievement.

Key product features:scaffolding

  • Rates from 0.75%
  • Loans from £100k- £10m
  • Up to 70% LTV
  • Terms from 3-24 months
  • BTL, commercial, HMOs & mixed-use assets
  • Adverse credit, CCJs, and arrears considered
  • No exit fees/ No Early Repayment Charges
  • No personal guarantees required
  • No credit scoring

To find out more, speak a member of our team on 0203 051 2331 or click here to fill out our quick enquiry form.

Scrapping stamp duty would improve conditions, say property investors

68% of property investors said scrapping the additional 3% stamp duty hike on buy-to-let and second homes would improve conditions in UK real estate, mtf’s Q2 2018 Property Investor Survey showed.

The government introduced a series of changes to slow down an overheated property market and reduce the number of buy-to-let investors. The introduction of the 3% surcharge in April 2016 has severely limited investor appetite for buying properties with the intention of renting them out.

Meanwhile, 32% of property investors called for a reversal on the changes to tax relief on buy-to-let mortgages. Those changes were introduced in April 2017 and have cut buy-to-let tax relief to 20% from 45%, for top rate taxpayers.

 

Some 66% of the 100 property investors surveyed revealed they now own properties in a limited company, with 82% of those saying this was due to the reduction in mortgage interest tax relief.

In total, 80% of those questioned said they felt the Government was not doing enough to support them.

Property investors have been dealt some setbacks, impacted by changes to stamp duty and changes to tax relief. Despite the changes, many investors remain resilient and mtf is here to support them and fulfill their funding needs.

For more information on how a bridging loan could help, call mtf on 0203 051 2331 or fill in our contact form and a member of the team will be in touch with you shortly.

 

mtf signs up to the Women in Finance Charter

We are delighted to announce mtf is one of 67 companies that has signed up to HM Treasury’s Women in Finance Charter today.

Today’s signatories also include: J.P. Morgan, Admiral Group, Equifax and Yorkshire Building Society, taking the total number of signatories to 272.

The Charter is a pledge for firms to work together to help build greater gender balance in financial services and according to HM Treasury, now covers over 760,000 financial services employees in the UK.

mtf is proud to commit to the Charter and we have set ourselves several targets including: maintaining 50% women in our senior management team and we are aiming for female representation on the board of directors within the next 12 months.

The Charter

  • commits firms to supporting the progression of women into senior roles in the financial services sector by focusing on the executive pipeline and the mid-tier level;
  • recognises the diversity of the sector and that firms will have different starting points – each firm should therefore set its own targets and implement the right strategy for their organisation;
  • requires firms to publicly report on progress to deliver against these internal targets to support the transparency and accountability needed to drive change.

You can read the full Women in Finance Charter here.

 

All change for HMO licensing rules

The Government has introduced new rules regarding licensing of houses in multiple occupation (HMO) that will mean a substantially higher number of properties will require a licence.

From 1st October, an HMO licence will be needed for properties occupied by five or more people from two or more separate households, regardless of the number of storeys.

Landlords will have to obtain a mandatory licence where their property meets the following criteria:

building

  • is occupied by five or more persons
  • is occupied by persons living in two or more separate households; and meets-
  • the standard test under section 254(2) of the Act;
  • the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or
  • the converted building test under section 254(4) of the Act.

The new HMO licensing requirements spell big changes for some landlords, with the RLA estimating that an additional 177,000 properties will become subject to the mandatory licensing. So, do take time to read the full order to consider how this may affect your portfolio.

In addition to extending the licensing requirements, the government is also proposing the introduction of a minimum room size for bedrooms in licensed HMOs. The new guidance will recommend floor space be no less than 6.51 sq m for single use and 10.22 sq m for two adults sharing.

The new law is likely to affect how landlord’s finance HMOs. If you are affected by the room size requirements or want to either convert properties into HMOs or to purchase them, and need to do this quickly, bridging finance could be an effective means of raising funds.

The main benefits of bridging finance are the speed and flexibility the product offers. A bridging finance lender has the ability to provide a large amount of funding, in a short time-frame- typically a bridging loan on an HMO can usually be secured within 15 working days.

At mtf, we allow our clients to acquire finance from day one, before applying for planning permission, allowing for shorter turnaround times which could prove invaluable to those landlords needing to act quickly.

As an example, we were recently approached by a client looking to raise £215,250 to purchase a property of 10 flats and carry out some refurbishment works. The client needed to act quickly so not to miss out on the opportunity. In just under 3 weeks, mtf provided a £214,000 loan at 65% LTV, based on an open market value of £330,000. Interest was retained at 0.9% per month, over a 12-month term, with no exit fees or ERCs. No personal guarantees were required.

Our bridging loan gave the client the funds to buy the property quickly and the 12-month term bought them the time needed to carry out the works to significantly increase the rental value of the property. The client then refinanced out of the bridge with a traditional buy-to-let mortgage from a bank, against the higher value.

Our HMO criteria:orange-buildings

  • 65% LTV on purchase or refinance
  • Rates from 0.85%
  • Terms from 3 – 24 months
  • Individual shared self-contained flats/ converted flat
  • Adverse credit, CCJs and arrears considered
  • No upfront fees/ no exits fees/ no ERCs
  • No personal guarantees required

If you have a property in mind or are looking to complete soon, get in touch today to see if we can help.