Membership News
Membership News UTBʼs property development loan book tops £1 billion
Allica Bank revamps commercial mortgage range
United Trust Bank’s property development loan book has exceeded £1 billion for the first time following a record year of new originations. The NACFB Patron recently expanded the division’s sales team to support housebuilders across England and Wales.
Allica Bank has revamped its commercial mortgage products, reducing interest rates and upping the maximum loan-to-value (LTV). Broker procuration fees have increased from 1% to 1.5% for owner-occupied, commercial, and semi-commercial investment mortgages.
Last year, UTB formed a number of strategic partnerships with government agencies designed to help housebuilders and developers gain access to competitive, higher geared funding.
The NACFB Patron has also applied a reduction of 0.25% to interest margins for all loans more than £1,500,000 on both commercial investment and commercial owner-occupied mortgages.
In February 2021 the Bank announced a five-year lending alliance with Homes England with the launch of the £250 million Housing Accelerator Fund to support SME housebuilders with development finance at up to 70% loan to gross development value. The fund provides construction loans between £1 million and £10 million.
Appetite for most trading property types has also been adjusted, with its maximum LTV for owner-occupied mortgages increased to 80%. This increase applies to loans secured on trading business premises, including children’s day nurseries, professional practices, and convenience stores. For owner-occupied commercial mortgages where clients can demonstrate two-times debt service cover, a maximum LTV of 80% on most property types will be considered.
In May 2021 UTB secured an ENABLE Build guarantee via the British Business Bank worth £250 million. The guarantee was the first to be issued under the new programme and will allow UTB to support the construction of over 2,700 units of new housing through the provision of more than £500 million of funding to housebuilders. Adam Bovington, head of property development commented: “Our aim this year is to further develop our compelling offering and assist the resurgence of the SME housebuilding sector.” 12 | NACFB
Allica Bank’s commercial and semi-commercial investment loans also now have a maximum LTV of 75% of vacant possession value across most property types. Nick Baker, managing director of intermediaries said that the input of its broker community was key to how the bank has developed its proposition: “We have a joint mission at Allica with our broker community to support as many SMEs as possible with the access to the finance they need to achieve their goals.”
