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.

 

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.

 

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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.

 

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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.

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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%.

 

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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.

 

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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.

What is Stamp Duty?

Stamp Duty is a compulsory tax paid upon the purchase of property or land in the UK and Scotland. It is a one-off payment that you have to make within 30 days of completion otherwise you risk being charged a penalty. The payment is always made in full and not in instalments.

For those looking at taking out bridging finance to purchase a new build or fixer upper, it is essential that you incorporate stamp duty into your overall costs.

How much stamp duty will I pay? 

The rule of thumb is that the higher the value of your property, the more tax you pay. So you should understand what stamp duty you will be paying when deciding how much you need to borrow.

Prior to 2014, the stamp duty was based on the percentage of your property and this percentage would increase as the value went up. For instance, properties between £125,000 and £250,000 would pay 1% stamp duty and properties between £250,000 and £500,000 would pay 3%.

Since the Chancellor’s Autumn Statement in December 2014, the stamp duty charged is now based on a tiered structure meaning that you pay a percentage on every level.

stampy-duty-rates

Example: Based on buying a property for £500,000:

Old system:

  • 1% on a property between £125,000 and £250,000
  • 3% on a property between £250,000 and £500,000
  • At £500,000, you would pay 3% which would equal £15,000 in stamp duty

New system:

  • You pay nothing below £125,000, which is £0
  • You pay 2% between £125,000 and £250,000, which is £2,500 (based on taxable sum of £125,000)
  • Then you also pay 5% on the value of the property above £250,000, which is £12,500 (based on taxable sum of £250,000)

So in total this means you’ll pay £15,000 (£0+£2,500+£12,500). Whilst the amount of stamp duty you pay on a £500,000 property is the same as the old system, the new structure is designed to help those looking to purchase properties of lower amounts.

Recent changes to stamp duty tax 

In the Chancellor’s budget of November 2017, he declared that there will be no stamp duty charged for first-time buyers looking to buy homes below £300,000. (The Independent) This will give them a saving of £15,000 (5% of £300,000) and certainly help young buyers and new homeowners get on the ladder.

Phillip Hammond also declared that in London and other property hotspots, stamp duty would be axed on the first £300,000 of a purchase price up to £500,000 – a cut of up to £5,000.

How much is stamp duty for additional properties?

If you are a property developer with a portfolio of several properties or looking to get a second mortgage on an addition property, you should be aware that stamp duty applies for an additional property and the rate is higher. In fact, the tax charged can sometimes be as much as double than your first property and the minimum property value where stamp duty becomes applicable is £40,000 compared to £125,000.

This uses the same tiered structure, so based on a property worth £200,000, you will pay a total of £7,500 in stamp duty, based on 3% on the first £125,000 (£3,750) and 5% on the next £75,000 (£3,750).

stamp-duty-additional-properties

Source: MoneySavingExpert 

How do you pay stamp duty? 

The solicitor who handles your mortgage and property purchase will usually be responsible for paying your stamp duty directly. Some solicitors are eager to have your stamp duty payment cleared as soon as possible which is why some will ask for payment upfront, and others prefer to pay after the property has been full completed.

There is also the option to pay for stamp duty yourself without the help of a solicitor. You will need to locate your unique 11-digit reference number (UTRN) which can be found online here or through your stamp duty return. You can pay the amount in full to the HMRC by phone or transfer funds to the specific HMRC back account, quoting your reference.

There are also options to pay by cheque, post or credit card (this will incur a fee). You may be required to present a valid payslip if you wish to pay by cheque or post as verification.

What happens if you do not pay your stamp duty? 

Paying stamp duty is compulsory and not paying it within 30 days can lead to a fine. For the first 12 months, your fine will be 10% of the overall sum, capped at £300 and this can increase to 20% after 12 months and 30% for over 24 months. This will not have any impact on you completing on the flat or property.

Payments can take up to 3 days which is why lawyers and solicitors like to proceed early on. If you are making payment yourself, you are recommended to get payment in nice and early to avoid any fines and don’t leave things to the late minute.

BRIDGING TRENDS: Bridging activity down in Q1

Gross bridging lending activity slowed in the first quarter of 2017, according to the latest Bridging Trends data.

Data from Bridging Trends revealed contributor gross lending reached £118.79 million in the first quarter of 2017, constituting a 5.5% decrease on Q4 2016 (£125.66 million).  The figure is also down on the corresponding data for Q1 2016 by 5.23% (£125.35 million).

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

Regulated bridging loans outperformed unregulated bridging loans for the first time since Bridging Trends was launched (April 2015). The number of regulated loans transacted by contributors increased from 37.3% in Q4 2016 to 50.7% in Q1 2017.

Mortgage delays were again the most popular reason for the use of a bridging loan in Q1 2017 at 31% of all lending, dropping from 35% during Q4 2016. Refurbishment was again the second most popular reason for getting a bridging loan contributing to 23% of all lending.

First charge lending for the quarter rose to 86.6%, from 82.6% during Q4 2016. Second charge transactions dropped slightly from 17.4% in the previous quarter, to 13.4%.

Average LTV levels dropped to 46.2% in Q1 2017 whilst the average monthly interest rates were up to 0.83%, representing an increase of 0.05% on the previous quarter.

The average completion time on a bridging loan application increased by 2 days to 50.

The average term of a bridging loan hit a new high at 12 months.

The significant swing towards regulated lending marks an interesting shift which, in turn, we consider has impacted the average time it takes to complete a bridging loan.  Also, whilst the level of regulated activity is up it is interesting to see rates increase for the first time in 5 reporting cycles.

Whilst it is too early in the year to draw any firm conclusions from this first quarter of data, it is these key parameters we are most keenly observing as we move forward in the year.

For more information, please visit www.bridgingtrends.com

bridging-trends-2017-q1

Global Institutional Investment Manager partners with MT Finance

mtf-logo

MT Finance Limited (“MTF”) an award winning independent bridging loan lender today announces it has entered into a relationship with a Global Institutional Investment Manager with over $1.4 Trillion of assets under management.  Under the agreement the Fund has committed to initially acquiring up to £125m of bridging loan assets from MTF with an option to acquire a further £125m.

Established in 2008, by co-founders Joshua Elash and Tomer Aboody, MTF has grown over the last 8 years from establishment to having successfully completed in excess of £250m in loans in the last few years predominately funded from their relationships with high net worth individuals.

Throughout this time MT Finance has assisted property professionals, business owners, and individuals with their finance requirements. MTF’s reputation in the market excels for delivering fit for purpose bridging loans at sensible rates, and its approach to lending is something that has been consistently recognised within the financial services industry with the company winning various sector awards including Business Moneyfacts Best Bridging Finance Provider 2016.

Joshua Elash, co-founder, said,“We are delighted to be partnering with an institution of such significant standing and this additional funding will enable the company to drive forward the ambitious growth plans we have in place to grow MTF into the market leading bridging finance provider”

Tomer Aboody, co-founder, said, “This is an exciting day in MTF’s history and starts a new chapter of growth.  We look forward to continuing to engage with our highly valued client and broker relationships. We move forward into 2017 with significant optimism for the future”

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

Joshua Elash said, “We would like to give our thanks to Nick Parkhouse and the team at EY who spent the time to understand the shareholders goals, worked with us to devise a long term plan and then set about executing the transaction supporting us through the entire process.”

Nick Parkhouse, Executive Director and head of Financial Services Debt Advisory, said, “The team here is absolutely delighted for Joshua and Tomer and the whole team at MTF and look forward to continuing to support them in their future successes.”

Charles Bischoff and Katie McMenamin at the finance legal team at Travers Smith LLP provided Legal advice to MTF.

MTF scoops another award for service excellence

Last night, MTF once again won the award for Best Service from a Bridging Finance Provider at the Business Moneyfacts Awards 2017. The prestigious accolade was presented by comedian, Romesh Ranganathan at the Lancaster London Hotel.

This is the second time MTF has won this award, having previously scooped the award for Best Service from a Bridging Finance Provider in 2014. It is also the fifth accolade we have received in recognition of the service we provide to our clients and introducing brokers.

Providing an excellent service is at the heart of our business model. MTF is committed to building strong relationships and delivering the very highest standards of service, and we are honoured to have been acknowledged with such a prestigious award as a result of votes cast from our peers in the UK finance industry.

On behalf of the whole team here at MTF, we would like to thank all those who voted for us! We greatly appreciate your continued support.

MTF would also like to extend its thanks to Business Moneyfacts for hosting an exceptional celebration- we had a great night!

business-moneyfacts-award-2017

WE NEED YOUR SUPPORT…

Voting is now open for the Bridging and Commercial Awards 2017!

If you have a spare moment, we would be grateful for your help to achieve the following awards:

  • Service Excellence- Lender
  • Bridging Lender of the Year
  • Marketing Campaign of the Year

If you feel we are deserving of any of these accolades, simply click here and vote.

This really does mean a lot to us and as always, thank you for your continued support.

vote-for-mtf

 

 

Short-term refurbishment finance

Did you know a bridging loan could help you enhance the value of your investment property?Refurbishment-Loans

With mainstream lenders implementing tougher restrictions, it has been harder for property investors to get 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.

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

Bridging loans for refurbishment purposes are available to property investors, landlords and developers looking to upgrade their residential, commercial or mixed use investment asset, before renting it out or selling on at a higher value.

As an example, MTF was approached by a developer focussed on an investment property worth £330,000 in London that had a good letting potential.

He wanted to buy, refurbish and then rent it out but was unable to get a buy-to-let mortgage as the property was uninhabitable.

MTF provided a £214,500 bridging loan within a week, at 65% loan-to-value, over a 12 month period with no exit fee or early redemption penalty.

Our bridging loan gave him the funds to buy the property and the time needed to carry out the works in order to significantly increase the value of the property. The borrower will then refinance out of the bridging loan with a long term buy-to-let mortgage from a bank, against the higher value.

MTF are here to get your short-term refurbishment finance loan completed in a matter of days. As a non-status lender, we will take a view on CCJs, defaults and arrears and do not require evidence of credit history, accounts, or proof of income.

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

2016 Bridging Trends Revealed

Bridging loan volume rose £50.1m (11.5%) to £482.61m in 2016 compared to £432.51m in 2015, according to the latest Bridging Trends data.

Volume rose overall despite a volatile year that saw issuance levels rise and fall against a backdrop of major geopolitical and economic events including Brexit and Trump’s US election win.

The year kicked off to a strong start with £125.35m of bridging loans completed by Bridging Trends contributors in Q1, before cooling off during Q2 to £91.11m, due to uncertainty in the run up to the referendum. Volume picked up again in Q3 rising to £140.49m, before dropping in the fourth quarter to £125.66m.

Volume during the first, second and fourth quarters of 2016 all exceeded levels compared to the same quarters last year, highlighting a strong increase in demand for bridging finance, the data shows.

Bridging Trends is a quarterly publication conducted by bridging lender MTF and a number of the industry’s specialist finance brokers: Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance, to offer a general snapshot of the UK bridging loan industry as a whole.

The split between 1st and 2nd legal charge loans remained fairly consistent throughout 2016, with first charge loans accounting for over 82% of the market in all four quarters.

A significant percentage of bridging loan activity was unregulated in 2016 at an average of 55.5% of all deals, although regulated business increased to 44.4% of all deals in 2016 compared to 36.5% in 2015, due to changes in regulation and the introduction of Consumer Buy-To-Let.

Average Loan-To-Value (LTV) ratios were steady throughout the year at around 49%, maintaining responsible lending levels.

Interest rates were under constant downward pressure throughout the year, averaging 0.89% in Q1 before rounding off 2016 at an average of 0.78% in Q4, demonstrating how bridging finance has become more affordable.

Mortgage delays were again the most popular reason for taking out a bridging loan in 2016, like in 2015. Pressure on banks, prompted by increased regulation, acted as a bridging finance demand driver. Refurbishment was the second most popular reason for accessing a bridging loan in 2016, according to the data.

Average loan terms remained consistent at 10-11 months throughout 2016. Average completion time averaged 45 days in 2016, up from 40 days in 2015.

The final figures for 2016 show strong demand for bridging loans. Interest rates were again under consistent downward pressure throughout the year, as the bridging sector continued to be highly competitive. We are certainly witnessing consistency in the key market parameters we are seeking to benchmark.

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