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.

 

BRIDGING TRENDS: bridging loan volume dips in Q3 2017

Bridging loan activity dropped slightly during the third quarter of 2017, according to the latest Bridging Trends data.

Data from Bridging Trends revealed contributor gross lending fell in the third quarter to £142.75 million, down 4.9% on the second quarter (£150.07m) but up 2% on the same quarter last year (£140.49 million).

Bridging Trends, a quarterly publication by bridging lender mtf and specialist finance brokers Brightstar Financial, Enness Private Clients, Positive Lending, and SPF Short Term Finance, launched in 2015 to monitor the general trends in the bridging finance market.

First charge lending remained solid in Q3 at 82%, indicating consistent investment in residential properties-to-let.  Whilst second legal charge lending increased for the second consecutive quarter rising to 18%, from 17.2% during Q2 2017.

Average LTV levels hit 49.6% during Q3 2017, up from 45.4% on the previous quarter, suggesting continuing investor confidence in the market.

Average monthly interest rates across 1st and 2nd charge lending decreased to 0.82% from 0.84% in the previous quarter as competition amongst lenders forced rates down.

42.9% of transactions were regulated in Q3, down from 46.1% in the previous quarter.

However, unregulated bridging loans continued to dominate the landscape, with the number of unregulated loans climbing to 57.1% of all lending- up from 53.9% in Q2.

The average completion time on a bridging loan application in Q3 increased by 4 days, as service and resource levels were impacted by annual leave.

Mortgage delays were the most popular reason for obtaining a bridging loan in Q3 2017, contributing to 31% of all lending and reversing the second quarter blip where refurbishment purposes exceeded mortgage delays.

Refurbishments were the second most popular reason for getting a bridging loan at 23%. Business Purposes was third at 13%- up from in 11% in Q2.

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

To view Bridging Trends archives, please visit www.bridgingtrends.com

Government is not doing enough to support the property market, say brokers

According to the data from our most recent quarterly Broker Sentiment Survey, 82 per cent of brokers do not think the Government is doing enough to support the UK property market.

 

When asked what changes the Government could make, over half (59 per cent) of brokers said scrapping the 3 per cent stamp duty surcharge would better support the property market. Followed by building more affordable housing at 28 per cent.

 

Despite the unexpected election result that lead to a hung parliament, the majority (60 per cent) of the 92 brokers surveyed revealed they backed the Conservative Party. 21 per cent of brokers voted for the Labour Party.

 

43 per cent of brokers said economy and taxes impacted their vote the most.

 

Some 48 per cent of brokers noticed a rise in bridging loan volumes in Q2, compared to Q1- down from 59 per cent in the first quarter. 33 percent said loans volumes had declined.

 

The South East saw the biggest demand for bridging finance in the Uk, at 62 per cent, up from 40 per cent in Q1 2017. The second highest area of demand was the Midlands at 24 percent. Only 9 per cent of brokers reported a rise in London- down from 30 per cent in Q1.

 

For the second consecutive quarter, funding a development project was the most popular reason for their clients taking out a bridging loan, at 24 per cent, followed by refurbishment at 19 per cent.

At a time of heightened uncertainty in the housing market stemming from numerous factors, brokers are exceptionally well placed to identify factors affecting activity. It is clear that stamp duty is having a negative effect, perhaps beyond what was anticipated, to slow the growth in prices by reducing transaction levels. This is borne out by the reduced number of brokers seeing a rise in lending volumes in London – the area most cited as feeling the effects of the stamp-duty ‘surcharge’.

The good news is that the market is responding by developing new opportunities, as more and more property professionals realise the potential of assets through refurbishment and ground-up development. Both of which mtf is here to fully support. For more information on how a bridging loan could help, call mtf on 0203 051 2331.

IN THE SPOTLIGHT: limited company product

mtf has launched a new loan product to cater for the major shift in the UK’s buy-to-let market as more landlords choose to set up limited companies in a bid to better manage portfolio assets, following recent changes to property tax.

While investing via a limited company is not a new concept, its use has majorly increased since Chancellor George Osborne announced that mortgage interest tax relief would be restricted to 20% instead of 45% for top rate taxpayers, from April 2017.

Landlords borrowing through limited companies can avoid the changes, instead paying corporation tax.

The limited company buy-to-let index from Mortgages for Business showed over half of buy-to-let lending in the second quarter of 2017 was provided to limited companies, the first time companies borrowed more per quarter than individual landlords, including for both purchases and remortgage transactions.

Despite the increase in limited companies, the number of mainstream lenders offering limited companies buy-to-let mortgages remains low. Moneyfacts data for the end of March showed only 14 lenders provided the option, out of a possible 77 lenders that offered any form of buy-to-let products.

At mtf, we understand the difficulties faced by property investors and our new short-term loan product is designed for all types of company landlords, in order to support this area of the market.

At mtf, we believe a bridging loan should be fit for purpose, shunning a one size fits all approach. We are here to work with you to get your loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and the client’s future plans.
limited-company

mtf Limited Company Product:

  • Loans from £100k- £5m
  • 1st & 2nd charges
  • Up to 70% Loan-To-Value
  • Terms from 3 months-24 months
  • Non-status, adverse credit considered
  • No credit scoring
  • No personal guarantees required
  • No exit fees / early redemption costs
  • Residential / commercial / semi- commercial / HMOs
  • Lend to offshore companieS

For more information, or if you would like to discuss an enquiry with a member of the mtf team, call us on 0203 051 2331. We are here to listen.

Property Investors want stamp duty surcharge scrapped

Three quarters 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 Property Investor Survey showed.

q2-image

 

The introduction of the 3% surcharge in April 2016 has severely limited investor appetite for buying properties with the intention of renting them out. It comes as the property market has slowed across the board amid other changes to stamp duty, including a hike on higher value assets.

The government introduced a series of changes to slow down an overheated property market and reduce the amount of buy-to-let investors.

Meanwhile, 25% 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.

60% of those surveyed revealed they had been negatively affected by the Government’s reduction in mortgage interest tax relief.

mortgage-rates

However, landlords borrowing through limited companies can avoid the changes, instead paying corporation tax. Some 75% of property investors surveyed revealed they now own properties in a limited company.

how-many-properties-limited

 

In June’s general election, 60% of property investors voted for the Conservative Party.

party-voted-for

 

With 35% citing housing as the policy that impacted their vote the most, followed by the economy and taxes at 30% each.

policies-impacted

 

In total, 100% of those questioned said they felt the Government was not doing enough to support them.

govt-supporting-landlords

Property investors have been dealt some setbacks, impacted by changes to stamp duty and more recently, changes to tax relief. Despite the changes, many investors remain resilient and mtf is there to support them and fulfil 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.

 

BRIDGING TRENDS: Bridging loan volume soars in Q2

Bridging loan activity peaked to £150.1m during the second quarter of 2017, a 26% increase on first quarter gross lending and the highest level since Bridging Trends launched.

Bridging Trends, a quarterly publication by bridging lender mtf and specialist finance brokers Brightstar Financial, Enness Private Clients, Positive Lending, and SPF Short Term Finance, launched in 2015 to monitor volume and general trends in the bridging finance market.

Activity during the second quarter of 2017 rocketed as bridging lenders brushed off potential volatility from Brexit and the UK general election to fulfil borrowers funding needs and fill a liquidity gap left by mainstream lenders.

However, average Loan-To-Value (LTV) levels dropped to a new low of 45.4% during Q2 2017, the lowest level since Q1 2015 as borrowers and lenders both took a more conservative approach.

Average monthly interest rates rose for the second consecutive quarter to 0.84%, from 0.83% in the previous quarter, but were lower than 0.88% during Q2 2016.

Refurbishments were the most popular reason for obtaining a bridging loan in Q2 2017, contributing to 27% of all lending as borrowers added value to existing and newly purchased properties.

Mortgage delays were the second most popular reason for getting a bridging loan at 25%. This is the first time since Q1 2015 that mortgage delays were not the most popular reason for obtaining bridging finance.

Unregulated bridging loans accounted for 53.9% of lending in Q2 2017, compared to 49.3% in Q1 2017, reversing the 1st quarter blip where regulated loans exceeded unregulated loans. Aside from Q1 2017, unregulated loans have dominated the landscape, since Bridging Trends started.

The average completion time of a bridging loan application decreased by 11 days in the second quarter to 39 days, compared to 50 days in the first quarter.  This is consistent with the increase in unregulated activity, which typically has faster processing times.

Second legal charge lending increased to 17.2% of all loans during Q2 2017, up from 13.4% in Q1 2017, 16% in Q2 2016 and 14.9% in Q2 2015.

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

Key data points from Bridging Trends in Q2 of 2017 are as follows:

  • Contributor lending reaches record high at £150.1m
  • LTV levels hits new low of 45.4%
  • Average completion time quickens
  • Unregulated bridging loans return to outperform regulated transactions
  • Refurbishment most popular reason for accessing a bridging loan

Demand for specialist finance remains strong. Notwithstanding a slight increase in the average monthly cost of credit to the consumer, which is up for the 2nd consecutive quarter.

Most interesting however, for the first time since reporting began, mortgage delays are not the most popular use of a bridging finance loan, having been replaced by refurbishment. Whilst it is too early to form any conclusions this may be indicative of a shift in the market, coming off the back of recent increases in stamp duties, and the changes to tax relief on buy to let property, more investors in this quarter focused on adding value to their existing investment properties.

To view Bridging Trends Q2 2017 infographic, please visit www.bridgingtrends.com

bridging-trends-2017-q2

 

IN THE SPOTLIGHT: commercial bridging finance

The UK commercial sector has endured some tough times in recent years- with events such as the EU referendum, UK elections, and Donald Trump’s presidency all having their effect on the market. However, in light of slowing growth in the residential market, investors are seeking out opportunities in the commercial market and demand is continuing to increase.

According to the latest data released by HM Revenue & Customs (HMRC), UK commercial property transactions hit a nine-year high, with a total of 127,280 purchases made in 2016/17 –a six per cent rise over figures recorded the previous financial year.

Commercial property is becoming more popular with private investors, many of whom are being driven away from the residential buy-to-let market by the increasing regulation and rising taxes.

Auction house Allsop recently announced it had seen three times the number of buy-to-let converts dipping into commercial property since the cuts to mortgage interest relief for residential buy-to-let properties were announced. Yet, the sector is still greatly under served by mainstream lenders, mainly because of the risks involved due to the volatility of commercial property prices.

Commercial finance is a multifaceted form of finance- there is not a ‘one size fits all’ approach, each loan must be assessed individually and priced according to the risk. The underwriting process is complex and some lenders can be inflexible in their decisions.

london-skyline

Borrowers seeking commercial finance need more innovative options, tailored to meet their needs and one such source that has become a critical tool to fund this community, is bridging finance.

Bridging finance has presented a real-time solution by providing a quick and flexible injection of liquidity to fulfil funding needs. The market is famed for constantly adapting to change and for its product innovation. For example, mtf recently introduced a commercial loan product with a 24-month term, due to demand from our brokers.

A commercial bridging loan can be secured on many property types, including semi-commercial, commercial property, and land. In addition, many income sources ranging from employed, self-employed and sole traders to partnerships and limited companies will be considered. Funds can be used for all existing investments to re-finance and improve cashflow, or to purchase business’s such as hotels, land or retail units.

What’s more, because bridging loans are now much cheaper, they are more appropriate for a wider range of borrowers and a wider range of circumstances.

mtf’s bridging loan products are designed to meet the many diverse needs of commercial property investors. 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.

As an example, a property development company needed funds to purchase a £4 million commercial asset based in Peterborough, which they intended to convert into offices.

The developers had a specific completion date and were unable to obtain a commercial mortgage in the time-frame required.

As time was of the essence, our broker partner approached mtf and we provided a £1.8m commercial bridging loan, at 45% LTV based on open market value. Interest was retained at 0.95%, over a 12-month term, with no exit fees or early repayment charges.

In just under 3 weeks, the clients were able to purchase the commercial investment asset and the 12-month term gave the client plenty of time to refinance with a commercial mortgage.

At mtf, we remain committed to offering sensible, flexible, non-status bridging finance loans to commercial property investors and SMEs.

Product highlights:mixed-residential

 

  • Rates from 0.95%
  • Up to 65% LTV on open market value
  • Loans from £100,000- £5,000,000
  • Terms from 3-24 months
  • Commercial/ semi-commercial/ HMOs
  • No exit fees
  • No ERCs
  • Whole of England coverage

why use mtf?

mtf is here to work with you to get your commercial bridging loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears, and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and your future plans.

  • No personal guarantees required
  • No credit scoring
  • Lend to foreign nationals and offshore companies
  • Underwritten offers issued within the hour
  • Average completions within 9 days

Don’t miss out on an investment opportunity, call mtf on 0203 051 2331 or apply online to see how we could help turn your aspirations into achievements.

NACFB COMMERCIAL FINANCE EXPO 2017: Highlights

James Anderson, our Head of New Business and Christian Gugolz, Business Development Manager at mtf, share their highlights from the NACFB Commercial Finance Expo 2017.

The annual event is designed to bring together the top lenders, banks, and service providers who operate in the UK commercial and bridging finance industry.

The day was a great success and we enjoyed the opportunity to meet commercial finance brokers and showcase our product range and service proposition.

For more information on the NACFB and its upcoming events visit: www.nacfb.org

 

 

IN THE SPOTLIGHT: auction finance

Driven by attractive prices and the speed at which a deal can be completed, property auctions are appealing to a wider audience, including buy-to-let investors, who are increasingly visiting auction rooms in a bid to find a good deal.

Property investors can benefit from buying a property at auction below market prices, typically within a 28-day time frame. They can also benefit from contributing smaller deposits of around 10%.

However, an investor wanting to take advantage of these opportunities can often face barriers when it comes to raising funds. Either they are unable to get a mortgage because the property requires major work, or it is virtually impossible to secure a mortgage in the tight 28-day time frame.

live-auctionThese circumstances have caused auction buyers to rethink their financial arrangements and seek alternative methods of funding, with auction finance offering a real-time solution to the funding gap. mtf has seen a notable increase in applications from investors and developers wanting to buy properties at auction.

One of the main benefits of an auction finance loan is the speed at which funds can be delivered. Where a mainstream bank may take several months to put together a loan for a borrower, an auction finance company is often able to make lending decisions within hours of the initial enquiry, so funds could be released in less than a week.

mtf completed a case for a client who needed £215,000 to complete an auction purchase and make renovations to the property. Their mortgage lender couldn’t provide the financing in the time-frame required and so they faced losing the deposit.

mtf provided a £215,000 loan, at 65% loan-to-value, over a six-month term, with no exit fee or early redemption penalty. We managed to provide the loan within 24 hours, saving the client’s deposit. They then had the time to renovate the property and increase its value before refinancing out of the loan with a buy-to-let mortgage.

Some auction finance providers can work with clients to ensure they go into an auction fully prepared and at a competitive advantage. Our clients look at catalogues to identify target properties, setting themselves a maximum threshold they want to pay. We can review their loan options at an early stage, prior to auction, and provide them with indicative terms. This way they can go and bid with confidence, knowing they have adequate finances in place so that a transaction can complete with minimum fuss.

product highlights

  • Rates from 0.89%
  • Up to 70% LTV on open market value
  • Loans from £100,000- £5,000,000
  • Terms from 3-24 months
  • Commercial/ semi-commercial/ residential assets
  • No exit fees
  • No ERCs
  • Whole of England coverage

why use mtf?

mtf is here to work with you to get your auction finance loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears, and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and your future plans.

  • No personal guarantees required
  • No credit scoring
  • Lend to foreign nationals and offshore companies
  • Underwritten offers issued within the hour
  • Average completions within 9 days

Don’t miss out on an investment opportunity, call mtf on 0203 051 2331 or apply online to see how we could help turn your aspirations into achievements.

Specialist lenders step up to help property investors

According to mtf’s latest Property Investor Survey, 75 per cent of property investors were unable to secure mainstream funding in the past 12 months, with nearly half (44 per cent) attributing affordability as the main barrier.

 

obtain-mainstream-funding

 

34 per cent of those surveyed said they were unable to obtain mainstream funding due to adverse credit and 22 per cent blamed stricter lending criteria.

 

what-reason-refused

 

However, 75 per cent of investors revealed they had managed to raise alternative finance.

 

raise-alternative-finance

 

47% of investors got a secured loan as an alternative, while 39% opted for a bridging loan.

 

what-product

 

Three quarters of investors intend to expand their portfolio in 2017, with 67% targeting London and 33% looking to buy in the South East, in an encouraging move despite changes to tax relief for residential landlords.

A majority of respondents said scrapping an additional 3% stamp duty hike on buy-to-let and second homes would greatly help, when asked how the UK government could improve the private rented sector.

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.

It’s certainly been a tough 18 months for landlords but alternative lenders are stepping in to meet the needs of borrowers.

For more information on how a bridging loan could help, call mtf on 0203 051 2331.

Bridging finance demand increased in Q1

Demand for bridging finance soared in the first quarter of 2017, with 59% of brokers experiencing  a rise in bridging loan volume, up from 31% in the fourth quarter, according to the latest Broker Sentiment Survey conducted by mtf.

q1-2017

 

The South East saw the biggest demand for bridging loans in the UK at 40%, up from 29% in Q4 2016. The second highest area of demand was London, at 30%.

 

most-demand-last-quarter

 

The most popular reason for taking out a bridging loan in the first quarter was to fund a development project at 30%, followed by the purchase of an investment property, at 20%. Demand for financing investment purchases grew from 6% in the fourth quarter, showing healthy appetite from landlords to take on new properties, despite recent changes to tax relief.

 

main-reason

 

Some 45% of the 100 brokers surveyed said competition was the key issue currently facing the bridging finance sector, while 30% cited delays, followed by regulation at 15%.

 

issues-facing-sector

 

When asked ‘where would you like to see more product enhancements in the bridging finance sector?’ The majority (40%) of the brokers surveyed said they would like to see higher Loan-To-Values.  Some 25% wanted greater flexibility from lenders on commercial lending and 15% wanted greater flexibility on adverse applicants.

 

product-enhancements

 

When it comes to choosing a bridging finance lender for their clients, 40% of brokers said interest rates and pricing was most important, while 30% said speed of completion was paramount.

 

what-is-important

 

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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