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.

 

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.

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.”