Here you’ll find news about MTF, as well as our thoughts on all things finance-related. As an award-winning provider of bridging finance loans, we always look forward to sharing exciting industry news with you.

Apply for a bridging loan today, or visit our testimonials page to find out what clients have to say about us.

 

Refurbishment most popular use for bridging loans in Q2

Funding refurbishments was the most popular reason for obtaining bridging finance in Q2 2018, according to the latest Bridging Trends data.

Just over a third (34%) of all lending in the second quarter of 2018 was for refurbishment purposes, up from 18% during the first quarter of 2018, as borrowers sought to maximise the value of their existing assets.

This is the second time refurbishments were the most popular purpose since Bridging Trends launched in April 2015- the previous time was during the same quarter last year.

Investors are evidently opting for fast and flexible bridging loans to make improvements to properties and bolster yields against a backdrop of legislation that has made it tougher to buy new properties. At the same time, mainstream banks continue to reign in lending.

Consequently, bridging loans for mortgage delays and auction purchases were down on the previous quarter falling by 4% and 13%, respectively.

Bridging loan volume transacted by contributors hit £197.94 million in Q2 2018, an increase of £43.9 million on the previous quarter. This is the highest figure to date and comes as three new contributors joined Bridging Trends- Complete FS, Finance 4 Business and Pure Commercial Finance, have

Regulated bridging loans fell to the lowest level since 2015, coming in at 36.8% of lending in Q2, from 43.7% in Q1.

However, second charge lending increased to 19.1% of all loans during Q2, up from 16.3%.

Average LTV levels increased by 7.8% in the second quarter to 56.9%, whilst the average monthly interest rate remained at 0.83% for the third consecutive quarter.

Turnaround times were quicker in the second quarter, as the average completion time on a bridging loan application decreased by 5 days in Q2 2018, to 43 days.

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

Key data points from Bridging Trends Q2 2018:

  • 3 new contributors join Bridging Trends
  • Refurbishment most popular use for bridging finance
  • Regulated lending hits lowest level since 2015
  • Average monthly interest rate stays at 0.83% for 3rd consecutive quarter

To view the Bridging Trends Q2 2018 infographic, please visit www.bridgingtrends.com

 

mtf launches new heavy refurb bridging products

We have launched a new heavy refurb range with reduced rates to support our brokers and clients.

The new heavy refurb bridging products are available from 0.80% on LTVs of up to 70% of the open market value.

These new products are designed to cater for the increase in demand from our borrowers who are wishing to add value to their investment by undertaking heavy refurbishment works.  We accept both first and second charge applications with up to a 24-month loan term. There are no exit fees or early repayment penalties.

Borrowers can apply as individuals or through limited companies and the types of heavy refurbishment accepted include basement digs, loft conversions, completing a development project and commercial conversions to residential.

As part of the changes, we have simplified our pricing and dropped rates across our entire range. Rates now start from 0.75% on both our first and second charge bridging loans.

Over the past 10-years, mtf has been consistently improving and streamlining its processes to offer borrower-friendly, fuss-free products that are transparent from the outset.

Having listened to feedback from broker partners and clients, we have created these new products to help property investors and developers access the finance they need, with speed and with minimum fuss.

Property investors and developers are integral to the UK housing market, so it is vital they get the support they need so they can continue to provide supply to meet the ever-constant demand. At mtf, we are dedicated to supporting property investors and developers with the funding they require through our range of 1st and 2nd charge bridging loan products.

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

renovation

Bridging loans boost property values

Funding a development project is the most popular use for bridging loans, according to the latest results from our Broker Sentiment Survey.

Property investors are increasingly turning to bridging finance to fund development projects and refurbishments, taking advantage of vast liquidity on offer to improve new or existing portfolio properties and maximise the value of their assets.

A third of the 122 respondents in our latest survey said the most popular reason for taking out a bridging loan in the second quarter of this year was to fund a development project, up from 24% during the same period of 2017.

Investors are opting for fast and flexible bridging loans to make improvements to properties and bolster yields against a backdrop of legislation that has made it tougher to buy new properties. At the same time mainstream banks continue to reign in lending.

26% of the respondents said buy-to-let lending restrictions was the biggest challenge facing UK finance brokers, while 24% said it was the Government’s continued changes to buy-to-let legislation. 

Due to these challenges, overall demand for bridging finance increased in the second quarter, with 38% of brokers noticing a rise in bridging loan volume, up from 30% in the first quarter of 2018.

The biggest demand for bridging loans in Q2 2018 came from the South East at 30%, followed by the midlands at 19%.

With mainstream lenders implementing tougher restrictions, it has been harder for investors to access funds. The feedback from our brokers suggests that more are turning to bridging finance as a result. In particular, investors are looking to add value to a property rather than purchase a property as a straight forward portfolio investment.

This trend is evidently not just limited to light and decorative refurbishment, but also property conversion, extensions, reconfiguration and smaller scale ground up developments.

We believe we will continue to see a substantial rise in the demand for development and refurbishment products throughout the rest of the year.

For more information or if you have an enquiry you would like to discuss, contact our team on 0203 051 2331

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.

Gareth Lewis joins mtf as Commercial Director

 

mtf has appointed Lewis as its new commercial director. Lewis will be responsible for overseeing product development and identifying new propositions to help further accelerate our expansion.

mtf is delighted to announce that Gareth Lewis, previously director of bridging at Precise Mortgages, has joined the mtf team.

Lewis has more than 14 years of experience in the short-term lending market, having previously held roles at Tiuta and Cheval Property Finance, before joining Precise Mortgages in 2011.

Director of mtf, Joshua Elash, comments:

“We are delighted to welcome Gareth into the mtf family and are excited about the experience and expertise he brings with him. As we continue to grow and develop, Gareth will play a big part in our ongoing project of making mtf the market-leading specialist lender.”

Gareth Lewis, commercial director at mtf, comments: 

“The opportunity to join mtf at this exciting time in its growth was an easy decision to make. I have known Joshua, Tomer and the team for a number of years, and have always admired the way they have worked and built their reputation within the short-term market. I look forward to adding my experience to the team to help us evolve further.”

We’ve moved!

We are delighted to announce that our team has moved to a new and much bigger space, in Holborn.

We have spent the last 3 years at Oxford Circus but when we first moved in, there were six of us and plenty of room- now our team has grown considerably more and space was getting a little tight. The new office will allow us to accommodate our increase in capacity and ensure we continue to provide an excellent service to our introducing brokers and to our clients.

It has been an exciting few years for mtf, and we look at this new location as the start of another chapter in our company’s history.

We’ll be working on getting settled in, so please note mtf will close an hour early tomorrow at 4:30pm.

Please make a note of our new address for all future correspondence:

9th Floor
Holborn Tower
High Holborn
London
WC1V 6PL

We look forward to welcoming our clients and industry colleagues over the coming months.

 

 

Investors tap alternative funds in BTL struggle

Property investors are opting to raise alternative finance after struggling to secure buy-to-let mortgages, according to the results from our latest property Investor Survey.

57% of 84 property investors surveyed struggled to secure a BTL mortgage in the past 12 months, with 62% citing affordability criteria as the primary barrier to mainstream funding, followed by age restrictions at 20% and insufficient deposit capital at 18%.

Yet, 43% surveyed filled the funding gap with other sources of liquidity, as 40% of those opted for secured loans and 30% raised bridging finance.

When asked what could mainstream BTL lenders do to improve, 57% of respondents said a more flexible approach to lending was key.  29% said a reduction of processing times would be the best improvement, while 14% said offering better rates would help greatly.

 

The results from our Q1 Property Investor Survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding. However, specialist lenders are stepping in to meet the needs of borrowers and fill the liquidity gap.

For more information on how a short-term loan could help you purchase an investment property, call mtf on 0203 051 2331 or send us a quick enquiry.

Bridging loan volume soars in Q1

Bridging lending hit highest level in the first quarter, according to the latest Bridging Trends data.

Bridging loan volume peaked at £154.02m in the first quarter of 2018, up almost a third compared to £118.79m for the same period last year, as demand for short-term finance continued to grow.

The year kicked off to a strong start and at £154.02m, the market experienced the highest volume recorded since Bridging Trends launched in 2015, almost doubling £80.47m of lending during Q1 2015.

Prior to Q1 2018, volume peaked at £150.07m during the second quarter of 2017.

Bridging Trends, a quarterly publication by short term finance provider mtf and specialist finance brokers Brightstar Financial, Enness, Positive Lending, and SPF Short Term Finance, launched to monitor general trends in the UK bridging finance market in a bid for greater transparency.

For the third consecutive quarter, mortgage delays were the most popular reason for obtaining a bridging loan, accounting for 24% of all lending.

For the first time, auction purchases were the second most popular reason for getting a bridging loan at 20% – up from 4% during the same quarter last year, as an increasing number of people benefitted from fast access to capital. Refurbishment was the third most popular reason for obtaining a bridging loan during the first quarter at 18%.

A completion time of 48 days during Q1 2018 was also lower than an average completion time of 50 days during Q1 2017.

The average term of a bridging loan was 11 months during the second quarter, down from 12 months in the previous quarter.

Average monthly interest rates remained at 0.83% for the second consecutive quarter and were 0.83% during the same quarter in 2017. Average Loan-To-Value (LTV) levels increased to 49.1% in Q1 2018, from 46.2% during the Q1 2017.

Regulated bridging loans increased for the first time since Q1 2017, with the number of regulated loans conducted by contributors increasing to 43.7% in Q1 2018, compared to 42.6% during Q4 2017.

First legal charge lending increased to 83.7% of all loans during Q1 2018, up from 80.3% in the fourth quarter. Meanwhile, second charge loans increased to 16.3% compared to 13.4% during Q1 2017.

Key data points from Bridging Trends in Q1 of 2018 are as follows:

  • Contributor lending reaches record high at £154.02m
  • Bridging loan demand peaks for auction purchases
  • Average monthly interest rate holds steady at 0.83%
  • Regulated bridging loans increase for the first time in a year

Joshua Elash, director of bridging finance lender, mtf, comments:

“It is particularly interesting that pricing has remained stable, despite an increase in regulated lending. This suggests that the recent downward pressure on rates might be easing and in the unregulated space, going the opposite way.

“Also, particularly interesting is the increase in bridging loans for auction purchases, considering the otherwise quiet property market, where transactional volumes have been adversely impacted by recent changes to buy-to-let income tax treatment and exorbitant increases in stamp duty.”

Tomer Aboody, director of bridging finance lender mtf, comments:

“Bridging volume has peaked to its highest level as the product becomes an increasingly mainstream financial tool. This is good news for borrowers that are able to access fast and vast pools of capital to fulfil their short-term funding needs as well as a growing number of investors attracted to the space.”

Chris Whitney, Senior Broker at Enness Commercial, comments:

“We’ve undoubtedly seen an increase in volume for bridging finance, but I also wonder if the breadth of lending that specialist lenders now provide is a contributory factor. For example, by definition, bridging loans are a short-term finance facility. However, that definition is now being stretched, with bridging lenders often able to offer facilities for up to two or even three years now.

“Lenders are also offering loans for more varied purposes, like ground-up development. We now even have Sharia-compliant facilities in our toolbox, allowing us to cater for a wider audience. Therefore, the increase in lending perhaps results from there being more things you can ‘do’ with bridging.

“I also think much of the increase in volume is outside of London and the South East, with other areas of the UK playing catch up from previous years. Again, this is because lenders are widening their nets, working across the UK and lending into the Republic of Ireland, Northern Ireland, Scotland, and so on.

“Ultimately, we may soon need to be having a conversation about what constitutes a bridging loan, in order to gain true insight into what the market is doing.”

To view the Bridging Trends Q1 2018 infographic, please visit www.bridgingtrends.com

Bridging loan volume rises as competition across the sector increases

According to the results from our latest Broker Sentiment Survey, bridging loan volume rose by almost a third in the first quarter of 2018 as demand for short term finance remained strong.

Some 30% of the 119 brokers surveyed experienced a rise in bridging loan volume, with the biggest demand coming from the South East at 50%, up from 47% in the last quarter of 2017. The second highest area of demand was the Midlands and Scotland, both at 15%. Only 10% of brokers said they’d seen the most demand in London in Q1.

Demand for alternative finance and an influx of cash into the space given the comparative attractive yields on offer has prompted new borrowers, investors, lenders and brokers to the market, facilitating its growth and continued acceptance into the mainstream as a viable financial tool. As such, some 37% of brokers surveyed cited competition as a key issue facing the bridging finance sector during the first quarter of 2018.

Interest rates and pricing emerged as most important when choosing a bridging finance lender at 39%, while 33% of respondents said flexibility was a key issue. Some 26% cited speed of completion as paramount. A mere 2% said an existing relationship with a lender was the most important factor.

42% of brokers would like to see higher Loan-To-Values (LTVs) on offer in the bridging finance sector, while 27% of brokers want greater flexibility on commercial lending and 26% want faster turnaround times. None of the brokers surveyed felt the need for lower rates or further transparency.

The most popular reason for taking out a bridging loan in the first quarter was to fund a development project at 27%, up from 19% in the fourth quarter of 2017. The purchase of an investment property was the second most popular reason at 24%, followed by refurbishment at 21%.

The feedback from brokers points to a strong need for specialist lending, particularly from developers who continue to support the housing market by providing further supply to meet the ever-constant demand. Bridging finance is increasingly being used as a viable financial tool to provide real time funding to plug any gap before longer term finance can be put in place.

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