Bridging Introducer October 2022

BRIDGING INTRODUCER

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Bridging holds a steady course

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Whether your clients need to downsize, buy a property quickly, or repair a broken chain, you can rely on a fast, straightforward decision –however complex your case.

We’re the regulated bridging experts you can trust.

Visit togethermoney.com/bridging-finance For professional intermediary use only.

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Bright future for bridging

One visit to the Bridging section of the Mortgage Introducer website shines a spotlight on considerable recent growth in the sector. Over the course of last month, Roma Finance introduced a new below market-value bridge; the Alternative Bridging Corporation secured an additional funding line; United Trust Bank introduced a new bridging director; TAB announced a record month of lending; Hodge unveiled a new refurbishment bridging product; and Glenhawk doubled its maximum loan size.

This wasn’t just about the success of a handful of individual companies, either – the market, as a whole, is thriving.

The total value of bridging loans in the UK has increased by 22 per cent in the past year alone, market analysis by mortgage broker Henry Dannell revealed. Between the first quarter and the second quarter of 2022, the total amount lent through bridging loans grew from £156.8m to £178.4m – an increase of 13.8 per cent.

So, what’s behind the success? According to Geoff Garrett, director of Henry Dannell, it doesn’t mean people are struggling financially.

Garrett explained that an increase in bridging loan totals indicates that the systems in place are struggling to keep up with demand and cannot match buyers’ and sellers’ desired pace.

“The housing market, for example, is moving more slowly than it did a year ago, even two and three years ago,” he said. “At the same time, buyer demand is extraordinarily high, and activity is through the roof. This causes delays in the conveyancing and buying process which, in turn, increase the need for bridging loans.”

In Q2 2022, the most common reason cited for taking out a bridging loan was to fund an investment property purchase.

Contents

4 Donna Wells

Specialist lending is in demand

6 Vic Jannels

Keeping growth sensible and sustainable is vital

8 State of the bridging market

The latest from the field

10 Funding

News from Alternative Bridging Corporation and MFS

11 Castle Trust Bank

New heavy-refurbishment bridging solution offered

12 UTB

New bridging director for specialist bank

14 Mercantile Trust Lender expands into Northern Ireland

16 New products

Mint Property Finance and Roma Finance celebrate new product launches

17 Grey Matter Marketing

Is the mortgage market burning out?

18 Henry Dannell

Reasons behind recent expansion in bridging borrowing

KM Business Information UK Ltd

Signature Tower 42 25 Old Broad Street London EC2N 1HN

Meanwhile, the mortgage broker said 21 per cent of applicants need the loan because they are part of a chain that has broken, thus pushing their expected purchasing timeline off-kilter and creating the need for a short-term loan to tide them over.

Whatever the reasons, what’s clear is that bridging has never been more in demand – and there’s never been a bigger reason to ensure it’s on the menu you present to your clients.

Paul Lucas

Demand for specialist lending grows

Donna Wells director, Envelop

As we head into the last part of 2022, a variety of specialist lenders are commanding a growing level of interest from intermediaries who are looking to service the shifting needs of their clients. This is a trend that will gather further momentum, particularly in the specialist residential marketplace, as more potential homeowners fall outside of the traditional mortgage selection criteria.

This was evident in a recent study from Together that suggested that specialist residential mortgage lending is set to rise from £5bn to £16bn by 2030, driven largely by long-term shifts in working and living patterns.

SPECIALIST RESIDENTIAL LENDING

The study, carried out in partnership with Dr John Glen, an economist, also predicted that the overall UK residential mortgage market will expand by 56 per cent over the next eight years and that, of this rise, as many as 500,000 mortgage applications will be dependent on specialist lenders – doubling their market share to four per cent of the overall UK mortgage market.

Whilst I am not privy to how this information was collated or calculated, it’s difficult to disagree with the sentiments behind the findings or the quote that supported them. As a business, we are certainly seeing more brokers coming to us with a range of highly complex residential cases and seeking additional support in sourcing alternative forms of finance to service the demands of credit-worthy borrowers who have fallen outside of tightening mainstream lending boundaries.

As such, the reliance on trusted packaging partners is likely to rise

in line with this projected specialist lending growth. That means there’s no time like the present for intermediary firms to form an important specialist extension of their business to help service the growing complexity being experienced across the residential mortgage market.

BRIDGING FINANCE

Bridging finance will continue to play an important role in this process, and there is plenty of positivity emerging from the short-term lending market, with bridging applications, completions, and loan books all rebounding significantly on the first quarter of the year.

This is according to recent data from the Association of Short Term Lenders (ASTL), which showed that bridging completions were just over £1.2bn in Q2, an increase of 17.4 per cent on the previous quarter. This means that completions have now been more than £1bn for five consecutive quarters. Within this, bridging applications were reported to have risen considerably, to £7.5bn, an increase of 18.7 per cent compared to the quarter ending March 2022, and the size of loan books has also risen, reaching a new high of just under £6.1bn.

In addition, the latest Bridging Trends report showed that contributors transacted a total of £178.4m in bridging loans during Q2 – 22 per cent more

than in Q2 2021 (£146.5m), and up 14 per cent on the previous quarter (£156.8m). Purchasing an investment property remained the most popular use of a bridging loan in Q2, at 24 per cent of total contributor transactions, falling slightly from 26 per cent in the previous quarter. The second most popular use was to chain break – accounting for 21 per cent of total transactions.

These figures demonstrate the resilience, professionalism, and maturity attached to short-term lending, and this is an area that is becoming an increasingly attractive option for a variety of propertyrelated transactions.

COMMERCIAL AND SUSTAINABILITY

Another area of the specialist mortgage market generating plenty of attention in recent weeks and months is the commercial sector, especially when it comes to supporting firms in achieving their sustainability goals.

SMEs are reported to be heightening their focus on finding finance to boost their sustainability, with 65 per cent of commercial mortgage brokers and 76 per cent of asset finance brokers saying they have seen an increase in the number of ‘green loan’ enquiries.

Allica Bank’s quarterly broker survey showed that this trend is being driven by SMEs prioritising the upgrade of inefficient machinery, with 48 per cent of commercial mortgage brokers and 72 per cent of asset finance brokers saying their clients sought finance to help fund these projects. Behind this came buying electric vehicles (26 per cent and 70 per cent, respectively) and improving the green credentials of their existing premises (35 per cent, 28 per cent).

Improving energy efficiency has certainly jumped higher on many SME agendas, and brokers can play an integral role in helping them access the right levels of funding to go greener and fund a number of sustainability projects now and in the future.

We’re committed to futureproofing landlords’ investments, providing long-term sustainable solutions to improve their energy efficiency.

That’s why we’ve launched our new Energy Efficiency Discount, rewarding investors with a reduced arrangement fee for properties with an Energy Performance Certificate (EPC) rating of ‘C’ or above.

Banking for the real world.

Get in touch 0330 123 4521 cm.broker@shawbrook.co.uk property.shawbrook.co.uk

n ergy EfficiencyDiscount

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Now is the time for sensible and sustainable growth

Vic Jannels CEO, ASTL

In December 2021, the value of bridging loans written that quarter reached a record £1.24bn, a 19 per cent increase on the previous quarter, and more than double the levels seen when ASTL first collected this data in December 2013. This shows the incredible rise to promi nence of short-term lending from its early years.

In March 2022, we saw a fallback in the value of loans written, which dipped 15.8 per cent in comparison with the record December figure. Nevertheless, bridging continued to be a popular product, and demon strating this, the second quarter saw loan values bounce back once more, up 17.4 per cent on the last quarter and 10.4 per cent year-on-year.

In fact, the figures show increases across the board in Q2 2022, with application values rising to £7.5bn, and loan books standing at a new high of just under £6.1bn.

Whilst there will always be fluc tuations, it is clear that short-term finance is resilient and remains in high demand.

TROUBLE AHEAD?

While the popularity of short-term finance and the thriving nature of this market are certainly reasons for cele bration, there is little doubt that the future holds increased uncertainty for everyone in the UK, bridging lenders included. Indeed, the data shows that the value of loans in default has also started to rise, up 31.5 per cent on Q1 2022 alone, while repossessions are also on the increase.

Growing uncertainty, bringing with

it the potential for stalled property purchase chains or unexpected complications for development proj ects, could be a boon to the shortterm finance market, which plies its trade helping borrowers find solutions in difficult situations.

With the cost-of-living crisis wors ening by the day, UK homeowners, first-time buyers, developers, and landlords are more likely than ever to face cash flow problems or develop a complex – even adverse – financial history, perhaps through no fault of their own. Bridging finance therefore has an opportunity to come farther to the fore and help keep the UK prop erty market moving, which in turn is integral to economic recovery.

project or purchase might face, partic ularly as we look down the barrel of a difficult economic environment. We have also learned the hard way that, much like the COVID-19 pandemic, global events and trends can emerge unexpectedly, with unforeseen effects.

That said, with a measured, commonsense approach, it is possible to provide responsible lending even during a turbu lent period – something that the shortterm and specialist finance markets have proven time and again.

The other side of this, however, is the fact that this market is not immune to instability. Far from it, in fact, as lenders must be highly aware of the potential impact of current and future trends on borrowers’ exit routes. While a complex economic environment is fertile ground for short-term lending, it can also be its downfall.

Lenders need to be flexible and willing to find solutions to borrowers’ problems, yes, but they also must take a stringent, sustainable, and responsible approach, in order to avoid exit routes collapsing without a contingency plan, leaving borrowers in a worse position.

KEEPING UP TO CODE

It is impossible to predict what issues a

To its immense credit, the bridging market has come a long way since its inception, working hard over the years to build a strong and trustworthy approach to a form of finance of which some have traditionally been wary.

Our code of conduct takes this responsible ethos and cements it into a set of standards that all ASTL members commit to uphold, the first and most important of which is to act in a profes sional manner, with honesty and integ rity, in their dealings with customers.

As the world moves on from the seismic events of the pandemic, through to the next set of challenges and struggles, the ASTL and its members are among those working hard to make sure that short-term finance is consistently able to provide a sustainable solution.

Growing uncertainty ... could be a boon to the short-term finance market, which plies its trade helping borrowers find solutions in difficult situations

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Bridging market holds its own

Jake Carter gets the latest on bridging in turbulent times

While the wider economy has been enduring a turbulent period, the bridging market has managed to remain stable. Data collected by the Association of Short Term Lenders (ASTL) has revealed that bridging applications, completions, and loan books all rebounded in Q2 2022.

Completions were just over £1.2bn, representing an increase of 17.4 per cent on the previous quarter, and completions have now been more than £1bn for five consecutive quarters.

Applications have also risen considerably to £7.5bn – an increase of 18.7 per cent compared to the quarter ending in March 2022, and the size of loan books rose, reaching a new high of just under £6.1bn.

“We expect next quarter’s figures to show continued stability and probable growth in numbers across the sector. Our third-quarterly data assessment will be key in identifying current trends,” said Vic Jannels, chief executive of the ASTL.

BRIDGING MARKET CONDITIONS

Roxana Mohammadian-Molina, chief strategy officer at Blend Network, explained that as a specialist develop ment finance lender, she has seen a growing number of bridging enquiries in recent months.

put simply, bridging has been elevated from a highly specialist financial product that was only used by a very select group of property developers to being a product of mass consumption in the real estate market,” she said.

As such, she explained that there is now a strong and growing demand in this product space, but she did concede that it certainly is a fluctuating market at the moment, which means that for borrowers it is often hard to know which lender is more competitive.

“In recent times the bridging market has seen its rates continue to fall, dropping almost in line with more mainstream areas of finance,” said Emily Hollands, head of specialist finance at OSB Group, which is the parent company of Precise Mortgages and InterBay Commercial.

She believes bridging has become less of a last-minute option and can offer real benefits that customers will consider from the outset over other finance options. Bridging is rising to the forefront in many people’s minds.

“At OSB Group, we have seen an increase in the market, and while complica tions continue to plague the economy, we expect to see interest in bridging remain,” she said.

unite; one that helps regulated house-sale chain-breaks, which are occurring more regularly in an intense purchase market, and the other on commercial investment purchases that are too good to lose out on,” he said.

ECONOMIC CONDITIONS

Jannels explained that, as with every sector, there will be concern about the rising cost-of-living and potential continued increases in trade supplies for those involved in development projects.

However, Mohammadian-Molina pointed out that, so far, the market has not yet seen any signs that economic condi tions and concerns over a recession have affected the bridging market, and she does not believe there will be a considerable slowdown there

“The reality is that the bridging market has evolved and matured in recent years;

Chris Oatway, co-chief executive of LDNfinance, said that the bridging market is relatively buoyant at the moment for both regulated and non-reg ulated offerings.

“We are seeing two sides of the industry

“I believe that the economic slowdown will likely affect the mortgage market more, particularly the mortgages for

Roxana Mohammadian-Molina

Emily Hollands

COVER

NOW

first-time buyers who are the customer category likely to be most affected by the interest rate hike cycle,” she said.

According to the Bank of England, the £17bn in mortgages advanced to first-time buyers in Q2 2022 was down by 21 per cent from Q2 last year.

Oatway said that, despite economic conditions, the number of bridging prod ucts has increased with the expansion of more lenders into the market.

He believes the increased competition is a positive, as it means lenders will have to improve both their service offering and proposition in order to get more business.

Hollands explained that while economic conditions have not had a direct impact on bridging, people were reassessing their options. People now have more consid erations when assessing what finance options are best for them, and therefore timeframes have slowed.

“In particular, more regulation and trans parency in the bridging market will most likely be welcomed by participants in this industry. Traditionally, the lack of transpar ency in this space has hurt the reputation of the market,” she said.

Jannels said that some regulations that have been introduced across the whole mortgage market recently seem to overlook the short-term nature of the bridging sector.

Similarly, he noted that the application of new rules will prevent re-bridging to the same lender, if required, at the end of a term on regulated cases, which he believes may be detrimental in a number of situations.

“However, at the ASTL, we have opened regular dialogue with the regulator, and we hope that this may help to create greater understanding of the differences between short-term and standard-term mortgage business,” Jannels said.

CUSTOMERS AND CLIENTS

With economic conditions worsening in recent times, Jannels pointed out that bridging rates have generally remained low and have not yet been subject to the rising cost of term mortgages, so he believes it is fair to say that they have fared well.

“In a rising rate environment, it is likely, possibly inevitable, that rates will rise in the sector, and it remains to be seen what impact this will have on consumer confi dence,” Jannels said.

focused on the green agenda, Hollands said it is unknown whether Prime Minister Liz Truss will have the same enthusiasm for improving energy efficiency. She explained that bridging was expected to step in here and help in a big way, but this is now unclear.

ASSISTING THOSE IN THE BRIDGING SPACE

Moving on to what could be done to assist those in the bridging market, Hollands believes education is very important. She said it is essential for lenders to educate brokers on their products and keep them up to date with any changes they make.

“How well do brokers truly know the bridging market? It is crucial that they be aware of the ins and outs of the space,” she said.

Hollands explained that brokers must know how to approach a bridge, how to package, what the corresponding fees are, and all the essential criteria so they can accurately inform their clients.

Mohammadian-Molina also believes that a lot more could be done to assist those involved in the bridging market.

However, even in a rising rate environ ment, he noted that the market remains very competitive, with plenty of options for customers.

Hollands noted that consumer behaviour has changed quickly due to wider economic uncertainty. As such, she explained that for customers using bridging, their exit strategy must be clear and well thought-out.

She believes there are enough lenders out there to assist in this department, and said that it is the broker’s role to pair the right lender and customer.

“From what I have seen, customers are faring well in the bridging market given the current economic conditions, and demand for bridging products remains strong,” added Mohammadian-Molina.

LOOKING TO THE FUTURE

While the government was previously

“While it will be a tough couple of months, I expect the bridging market to reach the light on the other side,” Hollands said.

Jannels noted is that most bridges need an exit option, and this is normally in the form of a term mortgage. As such, he believes that is an area that is likely to determine the future levels of borrowing in the sector.

Mohammadian-Molina said she has seen heightened demand in bridging as people try to create additional value for the projects they have.

“Refurb is an area in which there is real opportunity – bridging can assist people in improving the energy efficiency of their homes,” Hollands outlined.

Hollands explained that having a low EPC rating may make a property un-mort gageable, which is where she believes bridging can step in and help.

Oatway said that, naturally, there are concerns over the next 12 months that businesses are going to be affected by wider economic factors.

“For example, rising interest rates are likely to take effect, as well as a 0.75 per cent expected increase. This may suggest the market is heading into a strong head wind,” he explained.

“However, there is still plenty of liquidity, so even though funding may be harder, we are still confident we will always be able to fund the deal that comes in; it may just be at a higher price,” Oatway concluded.

Chris Oatway

Vic Jannels

New funding line will enable the lender to expand its development loan book

Alternative Bridging Corporation has announced that it has secured a new dedicated residential development funding line from its bankers.

The lender said the new funding line will release existing facilities and will help grow its development finance loan book, while expanding its bridging loan programs for residential and commercial properties, including regulated loans.

“We have been supporting the needs of small and medium-sized developers since our very beginning, as well as regulated development loans more recently,” said Stephen Meller (pictured), director at Alternative Bridging Corporation. “Until now these loans have been funded from within our general pool of capital.

“This new line is our first that is solely dedicated to providing development loans, and demonstrates our continued commitment to this sector where, for more than 30 years, we have financed projects across the UK, from one to 60 units.”

Meller added that the dedicated line will not only enable them to expand their development loan book but will also facilitate the continued expansion of their alternative overdraft and term loan business, as well as residential and commercial bridging loans.

“We have a best-in-class assetmanagement team, with over 100 years’ [combined] experience in supporting developers, together with a highly experienced team of underwriters who understand not only the group’s credit

Alternative Bridging Corporation secures additional funding line MFS secures £125m funding

requirements but the needs of our brokers and our borrowers from the property industry and business community,” he said. “These teams continue to be strengthened to meet increasing demand and, together with our knowledgeable BDMs, enable us to provide a first-class service to all our brokers and borrowers.”

Increase will support further expansion plans for both its bridging and BTL products

Bridging and buy-to-let lender Market Financial Solutions (MFS) has secured £125m of institu tional funding from a top-tier investment bank.

MFS, which expects its loan book to grow to £1.1 bn in 2023, said the increased funding will add significant capacity and funding diversification to support the continued growth of its specialist lending products.

Founded in 2006, London-based MFS claims to be one of the leading bridging lenders by market share in the UK. In Jan uary 2022, it launched its BTL mortgage range to complement its bridging offering. MFS also has further expansion plans for both its bridging and BTL products.

“We’re delighted to have secured this additional £125 million funding from leading financial institutions,” Paresh Raja (pictured), chief executive at Market

Financial Solutions, said. “This will support the growth across our bridging and BTL product lines, and keep us on track to meet our goal of reaching a £1.1 billion loan book for 2023.”

Raja added that the support of investors in increasing funding for MFS underlines the quality and strength of the platform.

“Throughout 2022, we have continued to experience high demand from brokers and borrowers – particularly for large loans, BTL mortgages and complex deals – and we continue to service the demand with highly efficient processes. We lend quickly and maintain the highest quality of underwriting and loan management, delivering market-leading standards,” Raja said.

Stephen Meller

Paresh Raja

Castle Trust Bank structures bridging solution for heavy refurbishment

Investor was able to buy property and increase borrowing to fund construction work

Castle Trust Bank has completed a £1.37m heavy refurbishment bridging loan, structured to enable a property investor to purchase a property, and then increase their borrowing to finance the construc tion work once planning permission had been granted.

The lender worked with broker

Specialist Hub to find a solution for a client who was purchasing a couple of two-bedroom flats that were to be converted to a family dwelling with a side and rear extension, loft conversion, the installation of a rear upper and lower dormer, roof lights to the front and rear, and a basement extension.

The purchase price of the property

was £1.83m, and the changes required planning permission, which had not been granted at the time of application. Castle Trust Bank then structured a loan of £1.37m to enable the purchase of the property with a standard bridge product at 75 per cent LTV and the option for the client to then switch to a heavy refurbishment bridge at 80 per cent LTV once planning permission was granted.

This extra funding, and an 18-month term, would provide the client with the finance and time they required to complete the works.

“This is a great example of our new dedicated bridging proposition in action,” Barry Searle (pictured), managing director of property at Castle Trust Bank, said. “We may have simplified our product range, but we haven’t changed our flexible approach to structuring solutions that provide the finance clients need in a way that matches their exact requirements.”

Tony Sutton, managing director at Specialist Hub, added that the lender demonstrated its out-of-the-box thinking to make the deal work.

“It’s not uncommon to come across complex bridging cases like this, but it’s unusual to work with a lender able to take such a pragmatic and flexible approach,” Sutton said.

Barry Searle

“[O]ur flexible approach to structuring solutions .. provide[s] the finance clients need in a way that matches their exact requirements”

United Trust Bank appoints new bridging director

Experienced hire will take up his new role in November

the implementation of technology to empower brokers and accelerate bridging applications.

Earlier this year, the bank refreshed its non-regulated bridging proposition with enhanced criteria and created a team of underwriters and case managers specifically tasked with accelerating non-regulated bridging proposals. UTB claimed the move was widely welcomed by brokers, leading to a significant uplift in new business enquiries.

Patel, who will take up his new role in November 2022, said he is looking forward to supporting UTB’s strategic ambitions and being “part of its strong, values-driven culture.”

“United Trust Bank has established a great reputation as a competitive and reliable bridging lender with a highly skilled and knowledgeable team,” he added. “The bank has delivered exceptional performance despite the challenges of the pandemic and economic uncertainty.”

Mark Stokes, chief commercial officer at United Trust Bank, said he was excited to welcome Patel to the bank.

United Trust Bank (UTB) has announced the appointment of Sundeep Patel (pictured), to the role of director of bridging, with a brief to significantly expand the bank’s short-term lending business.

Patel has worked in the financial services industry for over 20 years. Most recently, he was director of sales and member of the commercial executive committee at specialist lender Together. He was also in charge of the lender’s intermediary channel. Before joining Together in 2018, he was national sales

manager at Precise Mortgages.

U TB said its bridging division has significantly increased its new business volumes in the last 12 months, following the introduction of new services such as FastTrack and

“Sundeep has a huge amount of experience in the intermediary channel, but, more importantly, he possesses the skills, drive, and enthusiasm to build on our recent success and deliver the substantial growth we’re looking to achieve over the next few years,” Stokes remarked. “I know he is keen to meet his new team and get on with the job of making UTB the foremost provider of short-term finance.

“ I would also like to thank Owen Bentley and Nikki Brett for maintaining bridging’s excellent performance while we carried out our search for a new director of bridging. They will continue to run the division until Sundeep joins us in November, and the three of them will create a formidable team, delivering yet more improvements to products and service.”

Sundeep Patel

United Trust Bank “has delivered exceptional performance despite ... economic uncertainty”

Mercantile Trust expands bridging proposition into Northern Ireland

MT aims to provide NI-based brokers with choice, and better service the short-term needs of their clients

Mercantile Trust has announced the expansion of its bridging proposition into Northern Ireland, marking the next phase in the specialist lender’s growth plans.

I ts bridging proposition is currently available up to 75 LTV on first- and second-charge bridging loans for residential and refurbishment purposes. Rates start from 0.85 per cent for loans with a minimum term of three months and a maximum of 18 months, ranging from £25,000 up to £150,000.

Maeve Ward

T he announcement follows

Mercantile Trust becoming the latest lender to join the Association of Short Term Lenders (ASTL), and the recent expansion of its sales team with the appointment of a new senior business development manager within the mortgage desk.

“Our expansion into Northern Ireland has been in the pipeline for some time but, as with anything in the mortgage market, we have to undertake strict due diligence and ensure everything is firmly in place before any official launch,” said Maeve Ward (pictured), director of commercial operations at Mercantile

Trust. “This is a market that will greatly benefit from additional competition, as options are currently limited in the short-term lending space.”

Ward added that through this expansion, Mercantile Trust aims to provide NI-based brokers with choice and the opportunity to write more business and to better service the

short-term needs of their clients.

“We already provide buy-to-let mortgages in the region and, as a consequence of today’s news, can now offer a bridge-to-term option to landlords in Northern Ireland as well,” she said.

“We look forward to engaging with the intermediary community to introduce our extensive bridging proposition.”

“This is a market that will greatly benefit from additional competition, as options are currently limited”

Specialist finance firm reports demand for lending continues to grow

Mint’s commercial bridge offers up to 70 per cent LTV on loans ranging from £75,000 to £1m with 12-month terms.

Available in England and Wales on properties up to £1.5m, the commercial bridge sees a desktop valuation on up to 50 per cent LTV, with heavy adverse credit considered where the exit is sale. Loans over 50 per cent LTV will be subject to a RICS assessment. Interest can be serviced or deducted.

Mint Property Finance has launched a new commercial bridging product to provide an even wider range of options to brokers and borrowers looking for alternative finance.

Catering for those looking to purchase or refinance light-use commercial properties,

The launch brings the total number of Mint Property Finance’s so-called Power Products to seven.

“Whereas others ceased to lend or reduced their product offering throughout the pandemic, we’ve been pleased not only to continue lending, but also to increase our specialist product range, increasing

our visibility nationwide,” Andrew Lazare (pictured), founder and managing director at Mint Property Finance, said. “We’ve invested significantly in sophisticated research tools which, coupled with the knowledge of our rapidly expanding expert team and close working relationships with direct borrowers, brokers, and professional introducers, has enabled us to accurately forecast developments in the market and tailor our products to suit, maintaining our competitive advantage.”

T he announcement follows news that Mint has secured a multi-millionpound block funding facility from Aldermore Bank that, Lazare said , will enable the business to further expand its portfolio of products, with a focus on longer-term loans.

Mint Property Finance unveils new commercial bridging product Roma Finance unveils below market-value bridge

Increase will support further expansion plans for both its bridging and BTL products

Lender Roma Finance has launched a below market-value bridging product and has reduced rates on higher loan-to-values across its short-term finance range.

The new below market-value bridge is available to experienced property investors and landlords up to 70 per cent LTV, with rates from 0.99 per cent.

In addition, Roma Finance has reduced rates across bridging and development, now offering a standard bridging rate of 0.75 per cent at 75 per cent loan-to-value.

The lender is continuing to review,

innovate, and respond to a market that is maintaining its positive vibe, as the volume of business submitted to it continues on an upward trajectory.

“We are focused on supporting the mar

ket in these ever-changing economic cir cumstances,” Steve Smith (pictured), sales director at Roma Finance, said. “We remain agile and believe these new products and rate changes will provide support to those who are looking to grow their portfolios and property investment opportunities.

“Our product guide is [just] a ‘guide’ –and the solutions we create are tailor-made to suit circumstances, so it is always worth a conversation. These enhancements will allow more customers to access short-term finance at this time to continue to push forward with their aspirations.”

Andrew Lazare

Steve Smith

Is the mortgage market burning out?

Demand continuing despite lack of supply

Having been subject to a number of major developments in recent times, the mortgage market is undergoing a period of increased uncertainty.

The pandemic drastically affected the market, preventing in-person valuations for a time, to which the market responded by improving its technological systems and allowing for much of the process to be conducted online.

However, the cost-of-living crisis, inflation, and rising interest rates have followed, all of which have further complicated the market and are leading brokers to work extended hours as deals have become more complex and timeconsuming.

“Right now, there is a lot of frustration and burnout in the mortgage market. There is also a degree of market uncertainty, too,” said Jeff Knight, director of Grey Matter Marketing.

Knight went on to explain that much of this uncertainty and frustration revolve around how much farther interest rates will rise, whether property prices will begin to drop and what impact that might have on the market, as well as how the energy crisis and overall cost-of-living challenges will affect mortgage affordability.

According to Knight, the industry as well as its customers are all waiting to see how a new prime minister will address these challenges.

“Within this uncertainty, the mortgage market remains extremely busy, with record levels of business and rapid lender price changes putting a strain on brokers,” he added.

Knight outlined that the economic situation does not yet seem to be biting in terms of enquiries, but believes it eventually will, with reports suggesting that the market is now starting to see

a weakening in demand for new house purchases.

However, he noted that the rise in interest rates is the main area that is causing brokers a lot of headaches and challenges.

“Brokers I speak to have said that they still have clients who are moving due to the market changes brought about by the pandemic,” Knight said.

He went on to add that working from home seems to be providing more flexibility regarding where people live, with properties with outside space often required.

Then, of course, Knight noted that there has been a lot of remortgage and product transfer activity, some of which he said are cases brought forward as clients try to snap up rates now before they rise any further.

“There are still people wanting to raise capital to make changes to help them work from home,” he added.

Knight outlined that the demand is there currently, although he conceded the need to be pragmatic and noted that it may not be sustainable.

“Whilst demand is there, it is the economic impact on the mortgage supply side that is causing issues right now,” he said.

With rising interest rates, fluctuating SWAP rates, and delays to lender servicing, Knight said he has seen plenty of lastminute rate changes.

These no-notice rate withdrawals, Knight outlined, are having a negative impact on brokers and their clients right now.

They are causing delays in transactions and resulting in brokers working longer hours to try to meet the short deadlines given by lenders for the removal of their products.

“Some lenders are finding ways to give

broker-centric notice; others, less so. Where clients are going through a purchase, this adds extra pressure to what already exists [thanks to] a lack of property supply and [to] bidding wars,” Knight said.

The challenges being faced right now can, Knight believes, be traced back to the stamp duty incentives, which led to an overheated market.

Since then, he explained, the market has dealt with a deluge of demand, and by having to focus on the here and now, has not been able to look at what is coming down the track.

Knight added that the stamp duty holiday was reactive, and noted that the market has continued to see that with reactions to rate rises.

“Perhaps a market cooling will prove to be a good thing, in some regards, as the industry pauses for thought,” he said.

Jeff Knight

Why has bridging borrowing increased in the past year?

What does the increase signify?

The total value of bridging loans in the UK has increased by 22 per cent in the past year alone, market analysis by mortgage broker Henry Dannell has revealed.

Between the first quarter and the second quarter of 2022, the total amount lent through bridging loans grew from £156.8m to £178.4m – an increase of 13.8 per cent.

In the past 12 months to Q1 2022, lending has increased even more, soaring by 21.8 per cent from £144.5m.

“An increase in bridging loans does not signify that people are struggling financially,” Geoff Garrett, director of Henry Dannell, clarified. “Such loans are taken in order to fund major purchases or investments, but can only be granted to people who can prove they have larger, longer-term loans coming their way, such as a mortgage.”

Garrett explained that an increase in bridging loan totals indicates that the systems in place are struggling to keep up with demand and cannot match the desired pace of buyers and sellers.

“The housing market, for example, is moving more slowly than it did a year ago, even two and three years ago,” he said. “At the same time, buyer demand is extraordinarily high, and activity is through the roof. This causes delays in the conveyancing and buying process which, in turn, increase the need for bridging loans.”

In Q2 2022, the most common reason cited for taking out a bridging loan was to fund an investment property purchase. According to Henry Dannell, this means the majority of people

taking out this type of finance are not doing so to fund their own home purchases, but to fund what are likely additional home purchases, which they will rent out in order to generate income. This was the case for 24 per cent of all bridging loan applicants in that quarter.

Meanwhile, the mortgage broker said

21 per cent of applicants needed a loan because they were part of a chain that had broken, thus pushing their expected purchasing timeline off-kilter, and creating the need for a short-term loan to tide them over.

Around 13 per cent of loans were given to people who need the money to make significant, heavy refurbishments to a property, such as extensions and loft conversions.

Garrett said, however, that with both the cost-of-living and interest rates rising rapidly, a slight drop in buyer demand, and thus a decline in bridge financing, could be expected over the next year.

“An increase in bridging loans does not signify that people are struggling financially”

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