Q&A

Jamie Pritchard

Director of Sales

How has Glenhawk responded to the changing needs of property investors over the last 18 months?

We have been hugely encouraged by the resilience of the property market and have monitored the changes in legislation and the types of properties investors are buying. By working with our funding partners, we have been able to change criteria, with the aim to provide solutions to clients to add to their portfolios and achieve their business goals. This includes advancements to our regulated refurbishment product, additional criteria on our unregulated refurbishment products in both commercial and residential, and, most importantly, constantly looking to improve our processes for application through investment in the team and technology based on how clients now want to interact with a lender.

Q&A

From a product perspective, what sorts of solutions exist specifically for those looking to take advantage of PD and the changes in class?

We allow a refurbishment loan up to 100% of the refurbishment costs with a day one advance of 75% (max LTV) for residential properties and 70% (max LTV) for commercial properties. These products can allow borrowers to access up to 65% LTGDV, and up to 90% LTC.

What separates light and heavy refurb, and how does the application and underwriting process differ?

The definition of light vs heavy comes down to the planned changes to the asset and the cost, and percentage of the cost versus the open market value (OMV) of the asset day one. For example, light refurbishment would be 25% or less when considering the cost versus OMV. In addition, light would involve no material structural works and and are generally small-scale conversions including change of use. With regards to heavy this would be when costs are more than 25% of the OMV, with structural changes planned. For heavy refurbishment we would appoint a QS for certification of each drawdown.

What are your top tips for investors seeking refurbishment finance?

» Understand the value of the asset you are buying and the uplift in value post refurbishment » Have a detailed schedule of works and consider the current costs of materials required, plus the cost and availability of tradesmen, builders and project managers » Don’t economise on legals – use a firm you know understands bridging and can deliver on time » Always have a contingency pot of approx. 15% of the project » Plan your exit, and contingent exits, to repay the loan

When it comes to third parties, such as contractors and other professionals needed to get a project completed, what do you as a lender need to know and will a borrower’s choice of third party affect their application and the overall success of their finance journey?

From outset of the enquiry, we would look at the investor’s experience of previous refurbishment projects when assessing the commerciality of the project. In underwriting, we would need to understand the CV of the professionals that were being used for the deal to give us comfort that the project will be able to be completed during the loan term, including the planned exit. All of the above needs to be considered to make sure the term and the overall deal is viable and therefore not likely to put the investor under any financial duress.