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MT Finance is adapting to market change

Coronavirus has turned the world upside down in a scarily short period of time. Along with other industries, the property market has been turned on its head – nowhere was this more obvious than in Nationwide’s house-price index for March, which revealed prices at their highest level since 2018. Before we get too carried away, this good news was immediately followed with a stark warning that April’s numbers would paint a very different picture.

The main issue with Nationwide’s survey is that it looks at house prices – and to know what these are, you need transactions. While transactions are still happening, there are far fewer, with only those sales going ahead that really need to. This will inevitably translate to a ‘fall’ in prices.

House-price fluctuations are not something we can control, so we won’t focus too much on them. What we can control is how our business responds to these testing times. The door to our London office in Holborn may be shut for now but MT Finance remains firmly open for business. Thankfully, our commitment to technology in the early stages of our growth means we are well-equipped to enable our teams to work remotely. Cloud-based platforms facilitate remote access and our detailed business continuity plan has been invaluable. Subsequently, we have not seen any disruption to any of our operations; it really is ‘business as usual’ in as far as we can make it.

The one issue we have is shared by all lenders – an inability to conduct physical valuations. We are trying to be creative, working with existing valuations that have taken place within the past three months, alongside an audit from one of our panel valuers. We are lending at sensible loan-to-values to enable each transaction to work where possible and safeguarding against further potential market changes. That means a maximum 65 per cent on residential and semi-commercial for first and second charges, and up to 55 per cent against commercial properties on a first-charge basis only.

Working hard for clients, brokers and introducers, remains our top priority. We know times are tough for everyone and we want to minimise disruption as much as possible.

If we can find anything positive in Nationwide’s survey, even though it looked woefully dated, it was that London property prices continued to pick up before coronavirus hit, on the back of the resounding general election result and a feeling that Boris Johnson will be able to get Brexit done. While still slightly down on the 2017 peak, they were nearly 50 per cent up on 2007 prices. After all the political turmoil of the past four years, this demonstrates a healthy and robust market – one we all hope will return once this nasty virus has been sent packing.

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