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

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

 

Property investors still optimistic despite Brexit negotiations

The ongoing Brexit negotiations have left the UK property market in a state of insecurity. This is reflected in the results from our latest Property Investor Survey, where almost half (43%) of respondents stated that the biggest challenge they currently face is the continued uncertainty surrounding Brexit. This is currently seen as a bigger challenge than lending restrictions at 28% and the recent changes to buy-to-let (BTL) legislation at 16%.

The standoff in the Brexit negotiations alongside the Bank of England Governor Mark Carney’s warning that property prices might drop by up to a third after a ‘no deal’ Brexit, has meant that property investors are being faced with the question of how Brexit might affect them.

With a reduction of tax relief shrinking buy-to-let profits, coupled with the introduction of a 3% stamp duty on second homes, property investors are now faced with higher costs which in effect has prompted the need to generate more income. However, due to the Brexit uncertainty many property investors and landlords are unsure if property prices will plateau or plummet and are therefore seeking alternative methods to maximise profits- by adding value to their properties through refurbishments, rather than purchase property as a straightforward portfolio investment. At mtf, we have certainly seen an increase in demand for funds to conduct bathroom and kitchen conversions, loft conversions and to convert properties into an HMO.

Gareth Lewis, mtf’s commercial director echoes the need for property investors to add value to their portfolios. ‘The uncertainty with Brexit means that property investors are not waiting for the government before they seek other options for their portfolios’ he said.

‘They are resilient and savvy, so they will be watching the negotiations closely whilst bolstering their investments and taking opportunities, to allow them to withstand such an economic change’ he adds.

Gareth remains optimistic about the market and believes it is still liquid despite the Brexit uncertainty. ‘There are still lots of opportunities for property investors such as the demand for HMOs due to the rising population in the UK. Investors have therefore changed tact and rather than buying lots of properties that are ready to be let, are doing heavy refurbishments to attract renters or add values to their portfolios’ he said. ‘As we all know, there is still demand houses so as long as that demand remains, property investors will be willing to service the market’ he added.

‘The results from the survey shows that 80% of those affected by the new HMO rules are not willing to sell their portfolio. This reinforces my point that these landlords are looking to hold onto their portfolios and the property market is not experiencing a mass exodus despite regulatory changes or Brexit’ Lewis said.

According to Gareth, the uses of bridging finance has also changed to go with the trend. ‘A lot of the new cases that have come through to us recently are mainly for either refurbishment or using bridging to inject cash to the investor’s businesses. This shows the flexibility of bridging finance as a tool for property investors to service their needs whilst offering competitive rates and access to funds quickly’’ he said.
Bridging finance remains a good source of funding for investors with interest rates starting from 0.75%. ‘At mtf especially, our loans are flexible, offering the landlords peace of mind. We also do not have any early exit fees, so they are free to repay the loan whenever they want’ he added.

Gareth has also seen investors choosing to get funds released in stages to first bolster their property’s value through the refurbishment phase, and later withdraw further funds for further property transactions whilst they wait for the sale of the existing project.

‘The Brexit negotiation process will remain in the thoughts of investors and businesses alike. However, bridging finance enables landlords and investors alike to have access to funding in times such as these, allowing them to continue to thrive and take opportunities as they arise’ he added.

To find out more, speak a member of our team on 0203 475 0176 or click here to fill out our quick enquiry form.

james-anderson

How we make bridging finance effortless for our clients

For a client using bridging finance, certainty and fast access to funds are always at the forefront of their expectations. This is because, by its very nature, bridging finance should be fast and flexible compared to traditional funding methods, such as mortgages.

At mtf, we have not lost sight of this at a time when other lenders are moving on to computer banking models and lengthy application processes.

It is important to us that our brokers, introducers, and clients know they are dealing with people and not a corporation. Therefore, we go to great lengths to ensure that we deliver an open, communicative, and transparent service, and take the time to listen and fully consider each application. From start to finish there is direct dialogue with a decision maker who has the ability to make executive, pragmatic decisions and to drive a case home to completion.

We have built our underwriting process around a simple idea; the value of a property and the rationale of a loan are the most relevant criteria when assessing any bridging finance application.

As speed is such a vital element of bridging finance it’s important that all parties involved move swiftly because if they cannot complete to the borrower’s schedule, the client could miss out on an opportunity. Therefore, mtf has its own legal underwriting team who is responsible for driving the legal process. We feel by having a dedicated team, working in tandem with external lawyers, mtf significantly reduces any chance of delay or misunderstanding.

mtf is committed to building strong relationships. We have never over promised or under delivered because we don’t want to let our brokers or clients down. We always make sure we are continuously working hard to meet requirements.

In a recent example, a client wanted to purchase an investment property and required funds within a fortnight. The client was in Jamaica at the time and due to other commitments, was unable to come back to the UK in time to verify their identification documents. Time was fast running out for the client as he was about to lose an investment purchase.

So, we decided that I would fly out to Jamaica to meet the client, verify his ID, and witness the signing of the legal documents. I immediately flew back with all the signed documents allowing us to proceed with the loan. The client was then able to purchase the investment property with the funds from mtf with days to spare.

It’s important to note that this was for a £150,000 loan, not that of a million pounds plus, demonstrating how mtf will go the extra mile for the client, regardless of the loan amount requested.

Most lenders promise a great and fast service. At mtf, we understand that a promise is only good when it is delivered. We have built the company’s reputation around a strong service proposition, by being open and communicative and running an efficient operation. We are grateful to have received multiple industry awards in recognition of our approach to lending and the exceptional service we consistently deliver.

Enquire for bridging finance today.

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.

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.

 

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.

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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