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BRIDGING Champion of the Bridging Professional

INTRODUCER www.sfintroducer.com

March 2020

£5

A winning combination Roger Morris and Richard Lawton of Precise Mortgages on why bigger is better


BRIDGING FINANCE

Short term financing to bridge the gap Our Bridging Finance could help your customer get a quick solution to their short term borrowing needs:

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Regulated and Non-Regulated Bridging Finance products available

NON-REGULATED

AVMs (Automated Valuation Model) available subject to criteria

Contact your local BDM 0800 116 4385 precisemortgages.co.uk

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549). Registered in England and Wales (company number 06749498). Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

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EDITORIAL

COMMENT Publishing Director Robyn Hall Robyn@mortgageintroducer.com @RobynHall Publishing Editor Ryan Fowler Ryan@mortgageintroducer.com @RyanFowlerMI Deputy Editor Jessica Nangle Jessica@mortgageintroducer.com @mi_nangle Deputy News Editor Jake Carter Jake@mortgageintroducer.com Editorial Director Nia Williams Nia@mortgageintroducer.com @mortgagechat Commercial Director Matt Bond Matt@mortgageintroducer.com Advertising Sales Executive Tolu Akinnugba Tolu@mortgageintroducer.com Advertising Sales Executive Jordan Ashford Jordan@mortgageintroducer.com Campaign Manager Joanna Cooney joanna@mortgageintroducer.com Production Editor Felix Blakeston Felix@mortgageintroducer.com Head of Marketing Robyn Ashman RobynA@mortgageintroducer.com Printed by The Magazine Printing Company, using only paper from FSC/PEFC suppliers www.magprint.co.uk

MORTGAGE

INTRODUCER

Facing unique challenges

W

elcome to the March issue of Bridging Introducer. As springtime approaches, the financial markets are facing unique changes as Coronavirus hits the headlines and unfortunately more cases continue to be reported. It has been a challenge for countries all around the world, but here’s hoping it will all soon be resolved. On other matters, this is the month of the Budget. Many eyes are on new Chancellor Rishi Sunak to see if anything changes in regards to Stamp Duty and how higher priority housing is placed on the agenda. Many thought the Budget would be postponed thanks to the new appointment, however it appears unchanged. Following an otherwise positive start to the year, filled with momentum and expanding caseloads, the short-term finance continues to be in great shape. Roger Morris and Richard Lawton from Precise Mortgages spoke to us about their journey and life with post-merger OneSavings Bank – news that hit the headlines in 2019. Turn to page 32 to find out more. Our roundtable on page 26 discusses the future of the buy-to-let market by looking at upcoming regulation facing the sector and reflects on a busy start to the year. Plus, turn to page 14 to read this month’s feature which looks at the weird and wonderful cases of specialist finance that industry experts face every day. You can read comment from industry stalwarts such as Kevin Thomson and Brian West within the issue, with the latter using the popular phrase of ‘Keep Calm and Carry On’ to discuss both worldwide challenges and problems facing the industry. Turn to page 9 to find out more. B I

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Contents 5 Jo Breeden Removing the barriers to entry 7 Kevin Thomson A closer look at mixed use properties 9 Brian West Keeping perspective in changing times 11 Steve Seal The path to specialism 12 Feature: The weird and wonderful Jake Carter takes a look at the evolving world of bridging finance and some of the more interesting uses of the product 24 Round-table – A brighter future Our panel of experts look ahead at the future of bridging 32 Cover: Movin’ with the times Roger Morris and Richard Lawton from Precise Mortgages discuss their journey to the lender and how it is adapting following its recent merger

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Residential Mortgages

Buy to Let Mortgages

Bridging Finance

MARCH 2020

Second Charge Loans

BRIDGING INTRODUCER

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Need a bridging loan, now? We can do them with our eyes closed.

If you have a client with it all on the line, think of us. We’ve provided more than 59,000* bridging loans worth £5.9bn* since 1985, so we’ve got it down to a fine art. Whether it’s personal or commercial lending your client needs, your relationship with them is safe with us. No matter how complex the case, we’re the bridging experts you need.

Speak to your BDM or visit togethermoney.com/bridging For professional intermediary use only. *Includes unregulated and regulated bridging loan applications over 34 years.


REVIEW

MARKET ADVICE

Through the barricades Jo Breeden managing director, Crystal Specialist Finance

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he phrase ‘barriers to entry’ is defined as ‘high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business’. Remove ‘high start-up costs’ and ‘competitors’ – we all work together to find the best solution – and we are left with the central reason that stops mainstream brokers utilising the bridging market. ‘Obstacles’ are the problem, and whether real or perceived we need to know exactly what these are in order for them to be addressed. Over the course of the last year we have spoken to literally thousands of brokers, many of whom are utilising our services to complete deals, but just as importantly those intermediaries who haven’t even set foot into the world of specialist finance. If we are all going to continue to grow our businesses, these are the people we must convince of the sector’s benefits, whether it be buy-to-let mortgages, development finance or second charge loans. Within this research bridging remains the main overriding topic, both for us and the broker. They all know the name, but the product itself is perceived with far more scepticism. As part of our ongoing customer and broker rxperience programme we strive to understand the barriers to entry, and five reasons dominate. Let’s countdown the top five... 5 I DID A DEAL A FEW YEARS AGO AND IT WAS A NIGHTMARE

Once bitten, twice shy. The specialist market now bears very little resemblance to that of 10 years ago, maybe even five years ago. The service and professionalism of the entire supply www.sfintroducer.com

chain means that what was once a complicated, cumbersome process can now often be as slick as the mainstream market. Of course the process itself is different as that mirrors the requirements of the applicant, but the right companies will walk the broker through the process and handle all the elements to make it as painless as possible. 4 I DON’T DEAL WITH SPECIALIST

A firm favourite, and one judgement that can only be overcome by education. This is definitely an area where the bridging and specialist sectors have improved over the last few years alone, with traditional face-toface events being supported by online content. As with most articles I pen I always ask for everyone to drive education as a core activity, because it only takes one good experience for the broker to realise the world of opportunity that awaits to write more business. 3 I JUST DON’T SEE THE BENEFITS

To keep beating the drum, speed and flexibility are key to bridging success. Client needs are becoming more and more specialist so you need a specialist solution, simply saying no closes the door to so many borrowers who need our help. Refurbishment has seen huge growth recently, add into that unforeseen problems such as chain breaks or time delays and you have a tool available to help so many more borrowers.

length remains a key sub-concern, and we would tell anyone who is applying to consider the term carefully should there be any unforeseen issues which would affect the exit strategy. And of course the exit strategy itself is key, no-one should propose a bridging loan unless this is clearly defined and understood by all parties. This is where professional advice remains key. 1 TOO EXPENSIVE

And at number one, for the umpteenth year running, is the expense. This really covers two areas, the rates which are set to reflect the short-term loan nature and the associated fees. It is clearly accurate to say that the rates available today are as low as they’ve ever been, and there is a level of competition in the market that will continue to ensure these stay competitive.Yes they will never be as low as the mainstream mortgage market upon which many base their judgement, but the rates reflect the risk and flexibility needed. Others argue that the associated fees are too high. This relates to the arrangement fee, in some cases the costs for early redemption, and in worse case scenarios, the default fees. These can all be addressed by selecting the right product for the specific application, and by receiving advice on all parts of the transaction to avoid any nasty surprises during the loan term. POP PICKERS

2 TOO RISKY

Now we get to the real nitty-gritty. The perceived view of some in the bridging market is that it will leave the applicant in a preventable situation. Almost as though the market is setting a trap for repeat business. This is of course the exact opposite of the truth. Bridging finance is a solution to an immediate issue or requirement. Term

At the risk of sounding like a stuck record, good customer outcomes are achieved by looking for the best solution for all borrowers. This may mean the need to consider bridging finance, so while I’m not saying a bridge is the solution to every problem, closing your eyes to the opportunities means that no-one wins. And after all, we all want to be top of the charts! B I MARCH 2020

BRIDGING INTRODUCER

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REVIEW

COMMERCIAL MARKET

Mixed-use properties Kevin Thomson Xxxxxxxxxx

sales director, xxxxxxxxxxxxxxxx, Connect for Intermediaries xxxxxxxxxxxxxxxx

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he start of 2020 has seen a definite increase in the number of enquiries for commercial mortgages. Whether this is business owners wanting to buy their own premises, rather than renting, or investors looking at commercial assets to diversify their portfolios. However, analysing these enquiries we have seen is a significant increase in demand for mixed-use properties. Mixed-use is a property with a mix of residential and commercial, for example a shop or oďŹƒce with a flat or flats above or a public house with apartments or a purpose built self-contained block of apartments that have been developed on the car park. This type of property offers certain benefits from tax advantages to increased returns, whilst the residential element could be for let or even for the owner to live in. The rise in the popularity of mixeduse property investments comes about because they are classed as commercial and are not subject to the recent tax changes to residential buy-to-let (BTL).AAnd, even though some of the property will be residential BTL it does not incur the 3% surcharge on stamp duty. All of this makes mixeduse properties attractive for property investors. Mixed use properties generally need a commercial lender to provide the finance, however the exception to this is if the owner is living in the property. If the residential element is greater than 40% then it will be within residential regulation and require a regulated lender. Nonetheless, the vast majority of these properties have the residential elements let out and the whole freehold is a commercial investment proposition. There are a lot more factors for www.sfintroducer.com

the lender to take into consideration with this type of property. Although, with the two different types of assets, it can be seen as reducing the risk to the lender compared to say a 100% commercial asset. As with all investment properties the lender will look for the leases to provide the comfort that the mortgage is affordable. CLIENT EXPERIENCE

They will however, take into account of the type of commercial tenant that is occupying the commercial unit and the uses for the residential elements, i.e. whether it is a holiday let type lease or normal BTL assured shorthold tenancy agreements. They will also consider the history of the lettings and of course the experience of the client in the property rental market. It is important before approaching a lender for funding on this type of asset to understand the make up of the property. What is the percentage split in square footage between the commercial and residential? What is the split of the income from each

element? This is needed as some lenders may be able to lend if the residential element supports the whole loan without taking into account the income from the commercial element, and the client may achieve more competitive terms. Likewise a lender needs to understand your client’s experience have they had BTL properties before? Have they had any commercial investment experience? Lenders like to see a property investor work their way up through the different asset types, for example BTL or maybe an HMO and then a mixed-use property. Even if they have had them and subsequently sold the properties it still demonstrates that they have the experience and business acumen to succeed with the proposition. There are funding solutions for this type of property, but ensuring you get the best deal for your client means that you need to really understand the property, and the client. Only then can the lender of choice can be ascertained and terms presented. B I

Commercial mixed-use properties are not subject to the recent tax changes to residential buy-to-let

MARCH 2020

BRIDGING INTRODUCER

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Call us on 020 3846 6838 or visit lendinvest.com/intermediaries. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929). ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.


REVIEW REVIEW

MARKET XXXXXXXXX

Maintaining a sense of proportion Brian West director, Central Bridging

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s the old saying goes, Bob Hope and no hope! Mick Mulvaney, acting White House Chief of Staff, was asked recently by a reporter what he was going to do that day to try and calm the plummeting US stock markets. His response was to say that he might simply tell everyone to turn off their televisions for 24 hours. The man certainly had a point, but he should perhaps have added don’t read any papers and take a break from social media as well. Here in the UK, having endured three and a half years of Brexit induced navel gazing by our politicians, we enjoyed a glorious month of relative calm between the Conservatives thumping election victory and the gradual cranking up of coronavirus hysteria. It’s fair to say that the short-term lending industry and wider property market took considerable momentum into the new year with many achieving tremendous results in January in particular. February continued in a similarly positive vein, but our sector cannot stay immune to the macro-economic forces increasingly at play, particularly if sensationalistic reporting continues to dominate all sectors of the media. Throughout January, the first full

The only thing we have to fear is fear itself

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month of the outbreak, LexisNexis, the respected global business information and analytics provider, confirmed that 41,000 English-language print articles mentioned the word coronavirus and almost 19,000 included it in their headlines. By contrast August 2018, the first month of Ebola outbreak in the DRC, saw around 1,800 articles and only around 700 headlines mentioning this disease – this despite the Ebola death rate averaging out at about 50%! Never one to disappoint us on the “over the top” headline front, the London Evening Standard wasted no time in printing the headline featured in the image above! The tabloid papers have been equally guilty. The Sun introduced a coronavirus liveblog routinely referring to the virus as a “deadly disease.” Meanwhile the Mail wrote about a Chinese woman eating bats at a fancy restaurant and talked of China being “ravaged by a deadly new virus believed to have come from the flying mammals.” Any hopes that the broadsheets would adopt a more responsible approach proved forlorn. The Telegraph described scenes in Wuhan, the epicentre of the outbreak, that it sourced from social media: “Mask-wearing patients fainting in the street. Hundreds of fearful citizens lining cheek by jowl, at risk of infecting each other, in narrow hospital corridors as they wait to be treated by doctors in forbidding white hazmat suits. A fraught medic screaming in anguish.” Indeed, news outlets across the world are constantly trawling social

media and churning out ever more sensationalistic stories to compete in the saturated news environment. First person accounts from the front line are prized by the media but in truth all they do is induce fear. Fear in turn generates panic and fosters online rumours, panic buying and, in some cases, much worse. Rather than being informative about what is really happening with the spread of the virus, coverage increasingly becomes merely a reflection of people’s fears. If ever a sense of proportion was required, it’s now. At the time of writing less than 3,500 people worldwide have died from coronavirus. By contrast the World Health Organisation estimates somewhere between 290,000 and 650,000 die every single year from seasonal influenza with barely a newspaper report in sight! There are no accurate figures because the numbers are too large to count and yet without media coverage, we barely bat an eyelid! As an industry we are obviously better placed to ride out the worst effects of coronavirus than some other sectors, most obviously the travel and related industries. Having said this, we are already starting to feel the effects with the postponement of flagship events such as MIPIM and restrictions on foreign travel potentially impacting the movement of overseas property investors. Against this backdrop the words of the iconic US President Franklin D Roosevelt spring to mind. In his inaugural address back in 1933 he famously said; “the only thing we have to fear is fear itself.” This might be slightly overstating the point but by the same token the only contagion many of us are likely to come into contact with is that of media hysteria and fearmongering. In the face of this let’s try to keep a sense of proportion – it’s time to invoke that famous 1939 British rallying cry… “Keep Calm and Carry On.” B I MARCH 2020   BRIDGING INTRODUCER

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REVIEW REVIEW

SPECIALIST FINANCE XXXXXXXXX

Getting to the right place Steve Seal managing director, Bluestone Mortgages

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t is not news that the specialist lending market has seen a boom over recent years. We can in part attribute this growth to the swathe of lenders continuing to support increasing numbers of “non-vanilla” borrowers with the tailored lending solutions they need – products which they might not have been eligible for elsewhere. What’s concerning, though, is that large numbers of consumers are still unaware of what the specialist lending market can offer them. As part of Bluestone’s recent Specialist Lending Tracker, only two in 10 customers who have had their mortgage application declined by a high-street lender felt a specialist lender would be their next best option. The specialist market is geared specifically towards borrowers who are struggling to unlock lending on the high street – but this is no good if customers are unaware of this. The intermediary market is already doing a good job in helping customers

who have been denied lending. Referrals, for example, are an effective way of ensuring more customers can access specialist lending, and intermediaries play a major role in this. A promising outcome of Bluestone’s 2019 Specialist Lending Tracker was that 94% of brokers said they were likely to refer their client to a specialist lender if they had been rejected by a high-street lender. By referring complex borrowers to specialist lenders that are able help them, intermediaries will continue contributing to the increasing number of positive customer outcomes. However, there’s more the industry can be doing. If we don’t do more to help customers who have lost confidence in their eligibility to reapply for a mortgage, then this will not only make room for further uncertainty amongst consumers, but also hurt business in the long-run. The high-street banks have a duty to alert the customers they are unable to help to the other avenues that are available to them. Again, referrals will go a long way in achieving this. If more highstreet lenders start referring complex borrowers to an intermediary that can help them find a specialist solution, this will reassure customers that one

rejection does not automatically mean the end of their homeownership dreams. This will help improve consumer education around specialist lending and ensure that fewer people are disheartened by a ‘computer says no’ response. Furthermore, by guiding customers to a better lending option early on in the application process, it becomes less likely that this community is left disheartened as a result of a rejected application. Last year, the Trade Union Congress revealed that the average value of household debt reached a new peak of £15,400. Therefore, the need for specialist lending is greater than ever. However, only with industry-wide action will consumer knowledge of the specialist market improve to ensure that greater numbers of underserved borrowers are aware of how they can fund financial milestones. There are lending routes available for most customers – it’s just that lenders can be doing more to highlight these to customers they are unable to help. By resolving this, we will be able to raise the hopes of underserved borrowers up and down the country, all the while ensuring that more can secure the financial solutions they deserve. B I

Picking the right option can help secure solutions for underserved elements of the market

www.mortgageintroducer.com

MARCH 2020

BRIDGING INTRODUCER

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FEATURE

BRIDGING USES

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BRIDGING INTRODUCER   MARCH 2020

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FEATURE

BRIDGING USES

Jake Carter looks at some of the bridging market’s most unusual cases, as well as delves into the world of bridging - where it has come from and where it intends to go

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ccording to the Bridging Trends index the bridging market as a whole, in terms of volume, recorded a decline in 2019, decreasing by £34.2m. Overall the total sum noted last year equated to £732.7m, however, declined marginally quarter-onquarter throughout the year. Market share of second charge bridging loans rose over the course of 2019. Increasing from 17% to 20%, between 2018 and last year. The final quarter of 2019 saw the greatest percentage of second charge loans, equating to 23% of the bridging market. Turning to loan-to-value, the average size in 2018 was 54.6%, which fell to 52.9% in 2019, based on an average 12-month term. The bridging market has seen notable changes yearon-year. Brexit uncertainties have seemingly affected the market, with the volume of bridging recording a decline year-on-year, and also dropping steadily on a quarterly basis throughout 2019. Despite this reduction, Damien Druce, consultant, The Druce Consultancy, believes that the bridging market has pushed through the Brexit uncertainty and showed its resilience. “It should be remembered that the bridging market was built upon adversity,” says Druce. “It is a sector which is resilient, and the products are suitable for either a buoyant or declining market.” Druce’s thoughts are borne out elsewhere in the market. In terms of future predictions for the → MARCH 2020   BRIDGING INTRODUCER

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FEATURE

BRIDGING USES It is evident looking at the bridging trends data collected by MT Finance, that global uncertainties do have an affected on the bridging market

“Bridging first came to the fore in uncertain times and has built its reputation in difficult markets. This loan type first emerged in the 1960’s, however, when bridging loans first came into existence, they were restricted to only being applied to home purchases” bridging market, data collected by the Association of Short Term Lenders, at the back end of 2019, showed that since the General Election, 75% of bridging lenders expressed confidence about the long-term outlook of the economy. This is a 25% rise on the number of bridging lenders who expressed the same opinion in June 2019. On top of that almost three quarters, 72%, of lenders also expected to see their businesses grow in the first six months of 2020, representing an increase from 59%. The research also highlights that 52% of brokers expected to record growth in the bridging market within the first six months of 2020, compared to 23% who expected the market to grow in June 2019. GOING VIRAL These predictions followed the clarity over the Brexit uncertainty, however, that was before the latest uncertainty created by Coronavirus. And Druce sees the developing Coronavirus crisis, and its effect on the market and the economy as a whole, as a possible point of disruption. He said: “Coronavirus is now another area which looks set to disrupt the market; however, I believe that the bridging market will again show the strength of the marketplace.” The Coronavirus has been having a devastating effect on the global economy, creating a high degree of uncertainty, which is similar to the uncertainty created by Brexit in terms of affecting people’s willingness to take out bridging loans until further clarity is confirmed. Experts have predicted that Coronavirus will cost the global economy more than £217bn in the first quarter of this year. China is known as the workshop of the world and with Wuhan’s industrial presence within the country, this is expected to have a catastrophic effect on the manufacturing of goods globally. Images collected by NASA show the dramatic decline in pollution levels, NASA researcher Fei Liu told the [ITALS] New York Post that “this is the first time I have seen such a dramatic drop-off over such a wide area for a specific event.”

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BRIDGING INTRODUCER

MARCH 2020

HISTORY As Druce said, bridging first came to the fore in uncertain times and has built its reputation in difficult markets. This loan type first emerged in the 1960’s, however, when bridging loans first came into existence, they were restricted to only being applied to home purchases. In 1988, the Housing Act created the concept of Assured Shorthold Tenancies, this allowed lenders to loan money on a short-term basis to individuals intending to refurbish their properties with the pretense they were doing so in order to make their properties suitable to let. Moving to 1996, the majority of companies →

Temple of solutions Phil Mabb director, BridgeDevelopment

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n Saturday 10 August 2019, I received a bridging requirement for the £2m purchase of Hindu Temple in the Croydon area, where a term lender had procrastinated, leaving the client with a very significant problem. The client had exchanged on a £2m property with a £500k deposit from Devotee collection monies some two years prior, having been unfairly evicted from a previous location in Tooting. Subsequently, they moved to Croydon and had been serving the local Sri Lankan community on the assumption their tenure was secure, looking forward to enhancing the property once in their ownership. The problem was I only had five working days to complete, since the client had already been serviced Notice to Complete with a threat from the vendor that they would forfeit their deposit monies. Due to the nature of the asset, I can’t say I had a clear idea where to place the deal, but reached out to a broker turned lender Brian Bartaby of Proplend on the Sunday seeking his

opinion. I had dealt with him as a lender back in the noughties and respected his knowledge. My luck was in – he said he would do the deal and by 11:00am Monday morning I had terms. However, that left several issues to address, a group of clients who simply did not have knowledge of bridging finance, a valuation that was both damning in content and 8 months out of date, legals to pursue and a charity founder who had been under investigation by the Charity Commission for misuse of Devotee funds abroad. Further I later became aware of several other brokers being involved. I was able to persuade Proplend to accept a retype of the valuation, secured a quick valuation turnaround from a Valuer unknown to me, introduced a savvy lawyer from the same community, instigated the use of indemnity insurance, and sat down with all parties to cover off all potential issues. The job was done within 3 days and £1.4m facility secured ahead of schedule. Better still I have subsequently secured a more attractive term loan with a charity bank, so the long-term viability of the temple is secure. Over my five-year tenure as a broker, I have never felt so good in securing a financial solution!

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FEATURE

BRIDGING USES who offered bridging loans were private individuals accessing funds from a private pot. This meant that the companies were restricted in the number of loans they could provide, and therefore were often waiting for a loan to be repaid before allowing the next individual to access one themselves. Once the sub-prime mortgages arrived in the UK, the market began to change in terms of the availability to access products no matter what the circumstance, whether that be missed repayments or CCJs. Banks than began to offer funding lines to bridging firms, the new styled bridgers modelled their systems and general procedures close to the mortgage loan methodology. The demise of Northern Rock in 2007 marked a difficult time for bridging lenders and long-term

The magic of bridging Mark Posniak managing director, Octane Capital

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s a #3rdgen lender with a reputation in the market for looking at every deal, however offthe-wall, it’s fair to say that quite a few unusual bridging applications land on our desk. After all, one of the main benefits of having no fixed products is that you can create a product for anything, and brokers know that at Octane we always go out of our way to make a deal work. A recent deal we completed that was a bit different was a £1.65m loan at 70% LTV. That sounds pretty runof-the-mill until you take into account the fact that the borrowers were foreign nationals living in Dubai who owned the property in question through an SPV. They wanted to quickly release some equity from the property before they sold it on the open market. SPV loans can be out of the comfort zone of a lot of lenders, especially at higher LTVs, but we were comfortable with the risk and managed to get the deal over the line ahead of an already tight deadline thanks to a quick valuation from Chestertons and the usual seamless legals carried out by Rob Brooks and the team at Seddons. We’ve completed many other

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BRIDGING INTRODUCER

unusual loans since launch, including one £4.3m bridge secured across a 21-unit property portfolio of mixed, residential and commercial units. That particular transaction saw 21 valuations undertaken across London in a matter of days and the production of 13 Report on Titles (RoTs) just 24 hours before completion. Other examples of loans we’ve provided that have gone beyond the norm, even by bridging standards, include a loan of 90% of the purchase price of an industrial unit and a £10m bridge against a £20m loft-style studio development in a former Victorian warehouse in Hackney, which was purchased vacant in 2014. The owner of the warehouse had turned it into an established creative hub with an eclectic mix of more than 30 businesses, ranging from start-ups through to global brands in the creative, media, technology, leisure and event space. The asset’s diverse and secure income stream reassured us that the loan could be serviced. But while bridging, at its finest, can be used for all kinds of quirky purposes, we shouldn’t ignore the more everyday deals that take place in our sector each and every day. In fact, I’d even go so far as to say that the real magic of bridging is in the more mundane transactions, which may be smaller and less complex but which, for the borrower in question, mean a whole lot more.

MARCH 2020

“Bespoke bridging finance has been rising in popularity; the number of individuals taking out bridging loans to support additional property purchases, younger relatives, holidays and garden refurbishments is on the up” lenders alike, however, it created an opportunity for bridging lenders as it was a time in which most needed additional funds. Following this, the bridging market continued to grow year-on-year, establishing itself as a go to loan type in order to access funds short-term. PURPOSES OF BRIDGING The purposes of bridging loans in the current environment vary drastically, the most popular reasons for securing bridging finance, according to Enness Global Mortgages, include property refurbishment at 27% and mortgage delays at 25%. Data collected by the firm also shows that a rebridging loan was behind the purposes of taking out the loan type 13% of the time, business purposes at 11% and action purposes at 11%. Meanwhile, the research shows that other purposes were noted 15% of the time. Bespoke bridging finance has been rising in popularity; the number of individuals taking out bridging loans to support additional property purchases, younger relatives, holidays and garden refurbishments is on the up. Rather than specialist bridgers playing a larger role in the market, mainstream bridging lenders have begun to lend increasingly on irregular cases. Enness Global Mortgages outlines that an estimated 75% of bridging market activity is currently carried out by 10 of the 40 or so main participants in the UK marketplace. The firm adds however, that it has continued to see a steady stream of new entrants to the market, which implies that transaction numbers are rising, and demand is up. VARIOUS BRIDGES TO CROSS Peer-to-peer finance is an area of the market on the up. The approach to accessing funds is to amalgamate the assets of investors in a debt arrangement. Peer-to-peer lending is based upon the borrower and their ability to repay the loan. A lender will consider the risk to reward ratio upon assessing a loan of this type. The assets of an individual or company will factor into the decision by the lender. Rates and returns will be fixed from the start of → www.sfintroducer.com


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FEATURE

BRIDGING USES the term for peer-to-peer investors. This area of the market is seeing a rise in the number of investment funds which can be utilised on a broad array of scenarios and types of finance. This in turn has increased the popularity and usage of this method of bridging loan. While many put bridging loans under the umbrella of short-term loans, it is becoming a class in its own right. Data conducted by Enness Global Mortgages

Forging a bond Terry Pritchard director, Charter HCP

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irstly, let me point out that none of the security offered is in the UK and that all is spread about parts of Europe. Basically the client came to us looking for trade finance that would allow them to buy freeze drying drums for a factory in Norway which specialised in providing fruit and vegetables in this form to mainly third world countries along with other more focused uses such as military survival foods. The first problem you have with this is that the type of equipment used is so specialised that if you resold from a failing business there is a possibility there would be no buyers as each is made to order. The second issue is that you can end up with a relatively new machine which has absolutely no value as the number of potential purchasers is restricted, and this in turn means it is almost impossible to value. The obvious answer is to look at additional security, and we therefore requested the clients and companies’ full asset and liability list. It was discovered that the company owned the factory it operated out of and the director owned an apartment in Switzerland, plus another B2L in Central Europe, all of which had first charges on. After much deliberation we structured the deal in the following way. The funding partner was a South African family office loaning 90% of the

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auction value against the drums, with an equitable charge against the shares of all the companies owning the properties mentioned previously with a maximum LTV based on the physical asset of 70% of local auction values. We had control of all of the company shares and step in rights should they not run the business in a responsible manner. We were able to get the actual LTV to 95% of the amount required, €2m. In addition to all of the above we have a PG from the principle limited to 50% of any loses. Now given the complexity of the route we had to take to get the initial funding in place and the fact that there are no exit lenders in this space, we had to create a way of providing longer term finance. Now the problem you get doing this is that banks or institutional funders want funding against security, cash flow and balance sheet so we had to find someone that could understand this form of lending and who knew what the business could achieve with the contracts it had. It took several weeks, however, we located a fund in the UK and convinced them that by coupling all this with a surety bond (Non Performance Guarantee Bond or NPGB) offering 80% capital protection this was as close to a great deal as they would get. Let’s see if we are right! Out of a dozen this is just one that is easy to understand and gives an idea of what we can look at when we lend. CharterHCP Is here to provide lending strategies and solutions on deals you would normally struggle to place.

MARCH 2020

“The emergence of niche bridging finance operators, many believe, is accountable to high-street banks slow approval of large mortgages. The benefactors from high-street banks stepping away from the bridging finance market has been the private banks. Due to the funding mechanics, private banks are able to take a more flexible approach to affordability calculations than high-street lenders” shows that between 2013 and 2017, gross bridging lending in the UK jumped by an average annual growth rate of 26.1%. Another important aspect of the bridging market is the role packagers play, recognising their importance is key to developing an understanding of the market as a whole. ASTL says that with the evolution of short-term lending driving competitive product innovation and reducing rates, packagers have the opportunity to increase the market share and reach a wider audience. The association believes that a key method in increasing the market share of bridging is to expand to a wider range of brokers. An approach to achieving this is for packagers to drive conversations between brokers who do not traditionally advise on bridging and networks. ASTL also stresses the importance of training and educating on the benefits of short-term lending. As a lender association, ASTL has an important role to play regarding setting the foundations to facilitate growth in this market sector. Linking to training and education, in 2018, the Financial Intermediary & Broker Association launched its first workshop for brokers new to the specialist finance industry. Brokers were able to meet with a number of specialist lenders including Assetz Capital, Funding 365, Octopus Property, United Trust Bank, Roma Finance and Connect for Intermediaries, and educate themselves further on the specialist and bridging markets. The workshop provided the opportunity for brokers to learn about the bridging industry and understand its value as an option for borrowers. Increasing popularity within this space is driving mainstream brokers to look at the bridging industry as a viable alternative to a long-term loan. → www.sfintroducer.com

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FEATURE

BRIDGING USES BRIDGING NICHES The emergence of niche bridging finance operators, many believe, is accountable to high-street banks slow approval of large mortgages. The benefactors from high-street banks stepping away from the bridging finance market has been the private banks. Due to the funding mechanics, private banks are able to take a more flexible approach to affordability calculations than high-street lenders. Consequently, this has led to brokers choosing private banks over their high-street counterparts, as flexibility and quicker processing times are quintessential to a bridging loan. Furthermore, family office partnerships and similar operations are involved in the bridging market. Enness Global Mortgages says that these operations look at finance options on a case-by-case basis, considering the risk to reward ratios. Family office partnerships are on average, nimble, flexible and have significantly shorter application processing times than larger lenders. Assessing on a case-by-case basis can allow borrowers who may have been rejected by highstreet lenders or private banks the opportunity to access a loan. Through utilising a family office partnership,

The sky is the limit Steve Burch short-term lending and development finance specialist, Brightstar

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e work with a client who has built a portfolio of more than 50 residential properties in addition to a handful of commercial buildings. The client has a particularly good eye for an opportunity and has developed a good track record of purchasing commercial property and using Permitted Development Rights to convert this into new homes, either for sale or rental income. At Brightstar, in situations like this, we have the ability for our short-term and development finance team to work closely with our buy-to-let team to create solutions that you might not think would even be possible. And, in the case of this particular client, we have been able to secure a £450,000 bridging loan on the airspace

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above one of the client’s existing properties to provide the leverage they needed to pursue an additional opportunity. The client created a head lease on the building, in a limited company that was separate to the SPV that owned the property and, with this in place, successfully applied for planning permission to build an additional three storeys above the existing floors, with permission on a further seven storeys still pending. This legal structure and planning permission established financial value in the space above the building and, consequently, we were able to secure a loan on the air above the property. This is clearly not the type of loan we work on every day, and the success of the application was dependent on the client’s track record and our strong relationship with lenders. But it demonstrated that, when it comes to working with experienced investors, the sky really is the limit.

BRIDGING INTRODUCER   MARCH 2020

dependent on the individual’s application, this can allow for borrowers to access up to 75% LTV with the opportunity to use multiple income streams as well as worldwide assets. Enness Global Mortgages believes this is something that many other bridging finance companies may be unwilling to recognise. Similarly, to family office partnerships, private equity businesses have also increased their presence in the bridging sector. The rise in private equity businesses having an active role in the bridging market is largely accountable to their flexibility. EXIT STRATEGIES Concluding with the topic of exit strategies seems appropriate, Narinder Khattoare, chief executive, Kuflink outlines that within the bridging sector, the exit strategy and its viability are essential to bridging loans. Khattoare continues to explain that in the bridging market, apart from meeting affordability criteria and ensuring the property being offered as security is suitable, advisers need to focus on how their customers plan to repay the loan. The lack of a realistic exit strategy has led to bridging repossession. Unrealistic exit strategies have been noted as a cause for penalties being levied by lenders where customers have been unable to exit at the end of the term. Khattoare highlighted that “advisers and their clients must be clear on the strategy to repay the loan, whether it be by the outright sale of the security, refinancing, investment sale, sale of a second property or inheritance.” All exit methods require the need for proof. Once an official application has been started, a lender needs to be provided with the proposed exit strategy in order for the process to run smoothly. The exit strategy for lenders largely refers back to the reward to risk ratio, therefore customers should be advised on anything that affects their ability to repay. Delays are an area which cause difficulties for lenders, advisers and customers alike. Customers dropping out of a transaction or a chain breaking down are both common causes of delays. Khattoare suggests that brokers should encourage their clients to borrow for longer periods than they may need and to allow for ooccurrences that might derail their plans. When weighing up term, a customer has to consider choosing a longer lending option and to potentially repay the loan at an earlier date, versus exceeding their loan term and facing the risk of penalties as a result. In conclusion, case preparation, achievable exit strategies and reward to risk ratios are the fundamentals to attaining positive results that will benefit both the lender and the customer. B I www.sfintroducer.com

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REVIEW

MARKET ASTL

A commitment to fairness Vic Jannels chief executive, Association of Short Term Lenders

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n important attribute of any trade association is that it should accurately and transparently reflect and amplify the opinions and concerns of its members. This is why I have been so keen to invite early feedback and input from members of the ASTL since taking the role of CEO of the association at the start of the year. I have been pleasantly surprised at the level of engagement received from our members and am happy that we are able to use platforms such as this to engage in debate over some of the issues that have been raised. In this article, I would like to focus on one comment received from a lender member, which said: “The big industry issue for me is about the fairness, transparency and commercial justification of renewal/ default fees/ interest rates etc. “I don’t think people who are not regulated under MCOB really appreciate what a burden it can be on a business and if we don’t sort out poor practice now, it will come to the attention of the regulator. “More regulation might be a good thing if it restricts poor practice and improves the reputation of the industry as this could drive growth in overall lending in the longer-term. “However, MCOB-style regulation will undoubtedly change the business model for many firms and could lead to significant consolidation.” The unmistakeable message here is clear. Full regulation is not necessarily a bad thing and could actually bring a number of benefits to the market, delivering a level playing field for all lenders. But it will also bring increased costs www.sfintroducer.com

and considerations and it will change the way that every lender operates. For many lenders, this is likely to be a small change to align existing processes and practices to those required by the regulator. But for other stakeholders, the increased burden could prove catastrophic and may contrive to drive some out of the market. At this point, it’s worth describing some of the obligations that MCOB regulated lenders need to fulfil to remain compliant as this is a good way of demonstrating exactly how regulation can drive increased costs and resourcing requirements. EXAMPLES OF TYPICAL PROCESSES REQUIRED BY REGULATED LENDERS

  Documented risk and reporting framework, including an established risk committee and executive committee.  Regular internal reporting to these committees and reporting to the regulator.   Documented processes and records to show call monitoring.   Three-line of defence audit framework, including processes for audits by internal and external auditors.   Continuous training and testing of staff. This is by no means an exhaustive list, but it goes some way to demonstrate why complying with regulation can be costly for lenders. So, what steps can we take at this stage to protect our market from the potential of incurring these costs in the future. While much of the short-term lending market is unregulated, it is important that we behave as though we were a regulated sector. This means instilling a culture of looking after consumers and taking a transparent approach to fees and charges. It is in the interests of every lender in our industry that we all operate from

a level playing field, based on high standards of customers focus as this will enhance the reputation of the market and help to stimulate the growth of our sector. It will also be advantageous to lenders if we are able to deliver this level playing field of high standards without also having to incur the increased financial burden of formal regulation. This is one of the reasons we firmly believe that all lenders in our market should become members of the ASTL. Importantly, our Code of Conduct already imposes a form of selfregulation that can provide and demonstrate a kitemark of quality and a collective commitment to high standards. If we are able to demonstrate an ability to police ourselves, we can stave off any potentially heavily demanding legislative intervention in the future. With this in mind, I would suggest that ASTL membership is something that all brokers should look for when choosing a lender. It means brokers and their clients can have confidence that the lender will subscribe and adhere to certain standards of behavior and it sets the tone for the industry. For our part, as an association, we should also be proactive in calling out bad practise and monitoring our members to ensure that adhere to our code. This may require a slight change in the way that we operate, but this change will be minimal compared to the upheaval that would come with formal regulation. We are already looking carefully at how we can bring a more robust, whilst user friendly, improvement to an already sound code. Now is the time that we need to make an industry-wide commitment to fairness and transparency, and ASTL membership, with adherence to our Code of Conduct, is the most accessible and demonstrative way of doing this. B I MARCH 2020   BRIDGING INTRODUCER

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ROUND-TABLE

MARKET

A brighter future Our panel discuss the impact of the general election and how buy-to-let faces a more regulated future Jessica Nangle: With the increases in regulation for buy-to-let coming in this year – for example homes requiring an EPC rating E or above from April 2020 and electrical certification for new tenancies from 1 July – do you think bridging will be used more for properties normal BTL lenders won’t lend on? Roger Morris: We are seeing at Precise, a big increase in landlords starting to become more professional. We have seen market commentary that there has been a reduction in landlords, but there has also been an increase in larger portfolio landlords, so what we are seeing is landlords taking the industry a lot more seriously, looking at the properties and looking to build margins. Landlords are looking to find a property and buy it where they can improve the property, ideally it would be with EPC ratings and also a focus on the electrical testing that comes from the new tenancies. We are seeing both improvement from the heating inside, the efficiency of the property, the electrical testing and then converting through to HMOs. However, the biggest focus seems to be on the expansion of Article 4’s coming through, and Article 4 has a major consequence on brokers. A lot of brokers are now having to realise that when doing a purchase, the first thing they need to source is whether the property is in an article area or under consultation, and what the legal requirements are on the landlords. Richard Lawton: With our refurb buy-to-let products we have seen a marked increase in properties and landlords requesting finance to improve properties within their portfolio and also buying properties which are needing a quick refurb and then finding our longterm products. Duane Bridger: From a solicitors point of view that’s exactly what we’ve been experiencing, so the fact that there has been tribulations is great for the market, but not for the chap who is going to buy one property for buy-to-let purposes but for the portfolio landlords. It has definitely created a market for bridging loans.

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RM: Bigger burden for you though on making sure there is an Article 4, making sure it’s got the EPC certificate and it has got the electrical certificate. DB: It all stops at the solicitors. Graham Toy: Just building on that; that is the feedback I am getting from our members, that the professional landlords have just got it, they take it all in their stride, but it does feed into the bridging market, where you do need a bit of breathing space. There is also some feedback that there are some specialist BTL lenders who are geared up and ready to accommodate it, so rather than having to go through the bridging customer journey, they just get it. Scott Apps: I agree with the professionalism of the industry, the one man band that just started and wants to see how it plays out is disappearing, the quality of submission and the proposition from the broker is more aligned to where they can add value, what is their end result and what will that yield them. So therefore, it is more refurb to hold, where it used to be more refurb to sell. It is as you mentioned, specialist lenders are geared up to take them straight through, it is now that I want to buy it, I need the time and the allowance to uplift the value, both the rental and the capital value, and then I need to know where to be at the end so that I can exit to an alternative product that works for me, but I need to know that everything is lined-up. We have seen clients step away from propositions that don’t work, rather than just hoping that it will work out. The focus should be the exit if we are talking about bridging to add value. RM: I think the landlord forum groups really do outline when lenders get it right, Kent Reliance and Interbay are both favoured by landlords, I think when you do things right, the landlords do shout about it. Chris Borwick: I think there will be a big opportunity for the landlords that do it right. They’ll be a loss of housing stock out there for the out-and-out landlords who don’t have the resources to get things up to www.sfintroducer.com


ROUND-TABLE

MARKET

[From L to R] Daniel Richardson, CG&Co; Lyndon Whitstance, Movin Legal; Gary Clark, LendInvest; Chris Oatway, LDN Finance; Graham Toy, NACFB; Roger Morris, Precise Mortgages; Scott Apps, Castle Trust; Jo Logan, Brightstar; Duane Bridger, Bridger’s Law; Jason Berry, Crystal Specialist Finance; Chris Borwick, Capital B Property Finance; Richard Lawton, Precise Mortgages; Adam Tyler, FIBA; Vic Jannels, ASTL

scratch. I believe there will be opportunities for the professional landlords to come and buy up these properties. Jason Berry: I’m still finding my feet on the lender bridging market side, but from my understanding the EPC element didn’t necessarily apply to the short-term bridging aspect, so if it doesn’t apply to the bridging, clearly by definition it will create more opportunities in the bridging space, so the exit becomes very important for the EPC. This will just create more opportunities for the EPC and not short-term bridging.

RM: From a lenders point of view, it’s not the lender. First of all, responsibilities are with the landlord and the broker. Personally, I think it starts with the broker. The point being, during my workshops the past six months, 80% of brokers couldn’t correctly identify what an HMO was as per Google. So, when doing a purchase, the first onus is on the broker to use Google right from the beginning to find out whether there is an Article 4 in place, or an Article 4 coming into place. AT: I’m thinking more about the certification in the EPC.

Vic Jannels: The bridging is usually used for the conversion and the upright works, I see an opportunity, probably sadly, for managing agents who will talk to their clients about the needs for upgrades and for works to be conducted, and therefore introduce their contacts. I actually got involved on this on a transaction yesterday, where they were almost registering tilt at the opportunity for upgrading the electrics and various other aspects of the property for the person who was going to be purchasing. There are opportunities all the way through here, but I don’t think it is going to slow the market down at all.

RM: So that unfortunately will fault the lawyer at different parts, so if you’re a lawyer dealing with a property purchase at a moment where the tenancy is renewed, say six months ago, an EPC rating of E would be needed and the lawyer would have to find that out. Tenancies created from 1 July, it will be electrical testing, and unfortunately a lot of that onus relies on the lawyer, but a lot also relies on the landlord.

Adam Tyler: Can I ask a question here Roger, who is responsible to make sure there are certifications in place?

RM: The bit that the broker needs to establish is the journey from personal limited, because particularly if it is auction its locked down, secondly if the broker hasn’t →

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AT: Do you think that brokers from the outset of meeting a new customer, need to obtain that information before they look to move to the next stage?

MARCH 2020   BRIDGING INTRODUCER

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MARKET that the EPC rating is an F you can’t let it, but you can sell it, but you can’t sell it without a valid certificate, so it would be an F and therefore fail, but it has to have a certificate saying that it is a fail. So, you could sell a property to be a buy-to-let to be refurbished, so it would go onto a refurb bridging product with an F with the understanding that it has to be at least an E. It has to then become valid to be a tenanted property, so you can take on a refurb bridge with an F so that it has a valid certificate as purchase, but you wouldn’t be allowed to let it until it has a valid certificate reassessed as an E or above. Therefore, the responsibility falls on the lawyer, so we would rely on the lawyer to assure to us that there is a valid certificate of E or above, but at the point of purchase, a specialist bridging lender or a refurb lender could lend on an F, with the intent being that it is raised above.

researched an Article 4, for example in Birmingham, if they are the buying to rent to three students so tenancy type defines whether it is a HMO or not, it is then down to that broker to understand that, because if they are going to arrange a normal buyto-let mortgage and it is in an Article 4 area and it is not until legals that you have worked that out, its full planning application now needs to go into this property and change the use, which means you can’t occupy and therefore it isn’t rentable for nine to 12 months. So, the broker has to take accountability for advice on the Article 4 HMO personal names, the structure of ownership comes to someone else because the broker isn’t qualified, but the landlord needs to be responsible themselves, but they will rely on the broker for property type. This is where bridging plays a great part, I work a lot with Abby who works for Vic, and her knowledge when it comes to HMOs is phenomenal and the amount of times she has to be quite blunt with a customer on the phone and say Google this information, read this and then they go ‘oh I see what you mean’. It is about adding that correct valued advice. SA: I think the EPC in particular, we had a very recent case, which outlines, as far as I understand it where the legality sits is for the lawyer to check, it might be

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MARCH 2020

Chris Oatway: I think the biggest opportunity is not just talking about bridging lenders or buy-to-let lenders, it’s those specialist lenders that cover both sides, because if you are looking at anything from a broker point of view and here you are not looking at someone who is a straight bridger, it’s someone who could potentially do both and that’s where the real opportunity lies, where you’ve got the HMOs and rule changes. DB: There is an opportunity for brokers there because the first thing I do is I ask the client what they want to do with their property, because that is all of that and they might be getting a bridge and thinking it’s used one thing and realise that they will get the loan but it is not going to work out. I think that brokers who can get the bridging loan done, find out why and really line up the next product, so you’ve got two products straight away back to back and for us it’s great because we finish the bridge, it all goes well, both transactions are being sorted out and that client is happy. JB: It is a really good point that, and again when you look at Precise, Shawbrook and Together and you look at the products which are available it is absolutely amazing, they have amazing products, so we will look at the criteria and the pricing, that ability to do type two transactions – there has never been a better time.

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ROUND-TABLE

MARKET JN: With the increases in properties now called as mandatory HMOs with recent changes in the law and a further extent of Article 4, are you seeing bridging being used for the conversion and works needed to get the required certification in recent months?

they said that their enquiry numbers have doubled in January.

RM: I think we have covered that in the general questions, but key points I would say for a broker reading the article is, firstly, as soon as you know the identity of the property the customer is going to buy, you need to do a search on the local authorities website, it will come up Article 4 with say Birmingham in seconds, it will tell you the geographic postcodes. Birmingham is going through consultation, its going to be the whole city soon. So, there are two points to think of, so imagine this, if you are remortgaging a property in Birmingham in July this year where you haven’t registered that two bedroom flat with three people sharing, from a legal point of view that remortgage won’t go through because it hasn’t had change of use. So, for landlords they will need to register the property during consultation to save them going through a full formal planning process, and also to ask the landlord who they are going to rent the property to, is it family or mixed use. The moment it is mixed use, regardless of what the lender says, you want to pick a specific HMO product. You will additionally need to insure that your building insurance is fit and proper, because an awful lot of lenders will say that they won’t lend to a HMO, but they will lend to four none related tenants, which is a HMO, therefore if an incident or an accident occurred in the property, would that insurance company be happy to insure a property that wasn’t on a HMO product, when it was obviously a HMO.

DB: I think there is a lot more confidence than there was before.

CO: We would echo that; I think that the whole industry has been talking about the ‘Boris Bounce’.

SA: I believe people are seeing opportunity, they are seeing capital values coming up slightly, so we are seeing valuations coming up slightly. Even if there is just a slight increase on the curve, then we will see people have the confidence to move. To go back to the previous question, we are seeing people looking to do transactions where it is very obvious it will be a difficult property to convert to an HMO, they are taking on those projects because they are seeing that the yields and capital growth are going to be there, because they have got the confidence back to go and attack these projects that they know will be difficult to get from bought to refurb to turned out. Daniel Richardson: I think that from a recovery prospective, what we are seeing is that on properties where perhaps it’s a rebridge or an exit, they went very quiet towards the end of last year, but now we are seeing that borrowers are able to get back into that side of things and to get the brokers working in →

JB: I think that there are definitely insurers out there now who treat the quirkier property types and circumstance in a more standard way. I think part of the reason for that is listening to thought leaders within the marketplace and just adapting the insurance policy around the changing circumstances. So, I think that there is more than one approach to 10 years ago. JN: Have you seen an increase in bridging applications due to the ‘Boris Bounce’? AT: Everyone I’ve spoken to, both lenders and brokers, they’ve said yes. I spoke to a broker yesterday, and

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MARCH 2020

BRIDGING INTRODUCER

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ROUND-TABLE

MARKET terms of trying to rebridge and away from a defaults situation themselves. AT: I have read reports where some of the lenders, some of the things they were stuck with and how they managed to get rid of, for lack of a better word, was by moving them on to other places; and also there was very high percentages of refinancing that went on in 2019, and there seems to be a bit of a swing away from that and more new business being written or a high sense of refinance. RM: I think that we are seeing the classic bridge coming back, where couples now with the ‘Boris Bounce’ have the confidence to go for the dream home, which has an element of price put to the emotion – I want to live in that house and what I am going to do is, I don’t want to reduce my house, I know it will sell in the next six months, and the actual cost of reduction is far greater than the cost of bridging. This was the feedback we were getting back. A lot of the older people want to downsize where they don’t want to wait a year to sell. CB: That’s the thing – confidence in the market. It is noticeable that everyone is talking about it, we’re talking to estate agents as well who are getting more enquiries and registrations and more offers being put

forward. Particularly in bridging there is that confidence that you are going to go into a bridge, but you will sell and get out of it, which perhaps in the past couple of years that hasn’t been the case. VJ: There has been huge pent-up demand following the political and Brexit scene. There are so many dimensions of that. Once that was done, I think it was always going to be like a cork popping out of a bottle. People were waiting, and that is why we are recording excellent results and enquiries which will then mature into results at the present time. I think that is not an unexpected factor. JB: I would concur with Vic there. One of the early observations I made at Crystal was two days after Brexit, a Swiss HNW office did a £5m bridge and the reason they were doing it at that time was because they felt this was a place to invest back into. RL: Even in previous years, south of January is long. This is not the case this year, it was like Christmas never happened. Jo Logan: I think it picked up in December. It became very busy and then it continued into January. I think the new Article 4 and EPC certificates had a big impact on the more complex cases, but for me it’s more the downsize to the dream home for older clients. With the older clients they tend to be far more cautious, we tend to find that they wait until they have an offer on their property before they go into the bridge. As a broker, that would be what you would discuss anyway. JN: How much is price valued more than certainty and speed of service? CB: It depends on the market. If you are looking at the regulated bridging market, price is valued more by the end consumer, they tend to chase price a bit more in a competitive market. From a broker’s point of view, it is always important to get the certainty of the service. CO: You start with certainty of service, and once you know who is going to do the case and quickly, then it comes down to prices. They all go together. GT: It is interesting – we did a survey of our brokers

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MARCH 2020

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ROUND-TABLE

MARKET Gary Clark: I believe Chris hit it on the nail with that, regulators tend to be more price sensitive, but the underlying transaction you can bridge it. I’ll give you an example, I see a lot of people actually exchange and these are massive amounts of money and there are real amounts cash in that deal, so it is arbitrary to somebody who has got a tremendous amount of money. On that sort of transaction, the rate really does come into significance on the mortgage, more so than the actual delivery within that timeframe. I think it is important to distinguish, otherwise the two become too generic of a question, and bridging has always really been about speed and I think that is sometimes missed. SA: Chasing a few basis points on a rate where it’s going to take a few weeks longer, when you are bridging especially, you have to consider what are the extra costs from it taking those extra weeks.

across all major products and price came out as the most important driver. If you think about bridging in isolation, service trumps everything because you can argue your way around 10 bps, but that is immaterial if the lender is taking a long time to get it sorted. SA: The word that we champion is deliverability – can you actually do it not regardless of price, but within the perimeter of price. Given the complex scenarios that we are seeing more and more of, the regulation changes and professionalism of the market, can you actually deliver what you are suggesting? Given the complex scenarios we are seeing more and more of its regulation changes, regulation changes and everything else. Can you within my tax structure, within my company structure, can you actually deliver what you are suggesting, so yes all the headline figures are great in terms of what is published, but true to specialist lenders and specialist brokers that they deal with on a regular basis, they know that it is idiosyncratic and that we like the grey, in terms of ‘okay we can find a solution for this’, because we can deliver it. It isn’t going to fit into a square box, but we will find a way to deliver that, ‘okay we can’t do it that way, we’ll do it this way’, it might be five basis points higher, but it’ll get that done. You’ll find something that is deliverable, within a particular price bracket.

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VJ: And if your exit route is clear and its therefore not going to be that long-term, you are quite right, rate is a marginal part of the discussion. Can I get the deal, when can I get the deal and what is my exit. If I can cover all of those points than it actually doesn’t really matter very much, if it is the whole 12-months. If it’s a million-pound loan, then 10 basis points is a lot of money, and if there is a short-term guaranteed exit, I think it’s neither here nor there. One of the biggest problems we have had as a business has been the time that bridging lenders have been taking, probably in the last 12 months it has tended to rise. One bridging lender was brave enough to say that they thought the average time for a brief from out to completion was 51 days plus. So, that is really not what you are looking for from a bridging perspective, you need something to happen really quickly, to be properly managed all the way through and for the client to be satisfied by the end of it. I think this is an area, which will probably see some improvement now as we move into this new era - hampered by increased restrictions that are being placed on property transactions. SA: I think there is an opportunity there for specialist brokers to be really honest with their clients and to say ‘you can have this, at this price and it might take this many days, weeks, months, or you can have this product at this price and it will take you a lot less time, or vice versa.’ That is deliverable, that’s not oh we →

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MARKET could probably get that delivered a bit quicker and you can probably save some money, no that is just here are your two options. You can really nail down what is important to your client, is it the cost or is it the deliverability. RM: But, as a landlord I used bridging personally recently, I won’t say what lender, but it’s what I want to see from my brokers, they email back the points they are requesting, it isn’t excessive, it’s we look at that to say we want to do this deal, or it’s just such a long email which is we don’t. And that’s what you were working on this month. RL: We are seeing so many deals where initially the broker is placing with a lender who is slightly cheaper, might be 0.1% lower than ourselves but they have not been able to deliver on the transaction and get it through in time. The deadline date to complete was fast approaching but it eventually gets done at a slightly higher price. There is no harm in cheaper products, but the problem comes when you can’t deliver. JB: It’s an issue and debate isn’t it that we talk about that certainty and how important speed is and yet we listen to Graham’s feedback on survey and it’s price, so it shows that it’s an education piece and there is a desire to really work with our broker partners. AT: One of the reasons we are sitting here is because of the high street banks. Their service fell away post2008, and that’s the reason we’ve got this industry as it is today. What we want to do is maintain those levels of service and not to have 51 days of waiting for bridging loans, the onus is on us as an industry to make sure we keep delivering high service levels and

maintain the position that we have gotten ourselves into, and price is important it’s a combination of the two, its price and service and the onus falls on all of us, both lenders and brokers. GT: It is interesting, building on Vic’s point, there is general feedback that across the sectors actually lenders are just taking longer, and it is a continual message from everybody. It isn’t just happening in the bridging world; it is across the board. CO: One big reason is valuations, like the last year we have seen so much more down valuations than we have done for a while and that automatically kicks back delays and problems. So, when we look at a deal now, we are sometimes thinking if there is a down valuation does it still work with this lender at a higher leverage, because you have to bear that in mind, the valuators will catch up - the market sentiment is that we are absolutely flying again. DB: From that point of view, what is your expected delivery time from when a solicitor gets an offer on his desk until completion? RM: A day, maybe two days. DB: My attitude is that if you’re not going to do a bridge in three weeks it is not a bridge it is a loan. We aim for two. The impression I get is that often sometimes it is the solicitors, particularly when you have solicitors acting for the lender, that they don’t have the same enthusiasm to get these things pushed through quickly. There is nothing that frustrates me more than when a bridge comes in, and it is not sitting on a desk, so you aren’t chasing everybody up. You have done it all, but two weeks later you’re are just waiting, or a week to get a response. I am spending my time chasing my tail. It is frustrating. SA: I think there is points to having the right components, the broker is advising their client relatively forcefully, and the client understands what is going on, you need a lender’s solicitor that is on the ball and the client’s solicitor also needs to be part of that change. So, it is where a broker can advise a client fairly strongly to use a solicitor that is well versed in bridging loans and that would help a lot. RM: We have introduced dual legal because we found that why do you need two lawyers, you don’t need two lawyers on a buy-to-let, you just need one, why would you have the two. I can understand if you are doing a £3m deal, but the sort of houses I was buying in Teesside were £50,000 street houses, if I am buying a £50,000 street house I only need one lawyer with whatever lender I am with. If I am doing a bridge why do I need two lawyers, it is just a short-

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BRIDGING INTRODUCER   MARCH 2020

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MARKET term loan that is going to facilitated by an exit of a buy-to-let lender, so we have brought in dual legals for that reason, and it has been beneficial. What I do, is if I am doing a purchase, I instruct the lawyer at the same time as a lender, because I am committed to that property, so the lawyer has that extra time and you expect the lawyer to just say ‘this is what we are doing, this is the timeframe, this is what we expect’. CO: Our experienced clients now are asking for it, saying does the lender accept your representation, because it reduces the costs massively. Often the cost of those lawyers can be cheaper than the cost of one on their own. JA: And speed as well. VJ: It is a common element of education, I brought this up at the last roundtable, that when you look at the sheer welter of brokers in the UK at the moment, it is probably true to say that there is a large percentage that see one bridging loan every three, four, five, six, seven months, so they are not necessarily use to the way in which it should be presented versus a traditional house purchase and I think there is an incumbency upon those of us who sit in certain areas to insure that the training is given properly. Networks for example, don’t like their members being involved in bridging, I am not sure what their worry is, but a lot of them just don’t allow their people to do it. It may well be that they will just hand that off to someone who just says they deal in bridging, but actually just does one every seven or eight months and really they don’t understand, so by the time it comes to the lawyer, you have a lawyer on side who probably doesn’t do much bridging ether, he is then worrying when it seems the lender is asking about 25% more questions than in a usual standard transaction. I think that is where the holdups occur and everybody gets a bit tetchy because I don’t understand why that lawyer is asking all those questions, having never done it this way before – we see that an awful lot. So we have all wasted a lot of effort and money not doing a deal, so I would come back every time to education, how do we make sure everybody understands that whilst it is an mortgage transaction or a loan, it is actually important to follow through. GT: Just building on Vic’s point, this is something we have identified, so we have consultation with a lot of lenders and we say let’s standardise a bridging application, so that for the people who only do it once every six months, to call it an idiots guide would be unkind, but it is just a process. RM: We try and educate in all of the workshops we do about brokers understanding, I think the key component is – a broker says how long will it take to www.sfintroducer.com

get this bridge through, I’d say the biggest factor is your engagement with the right lawyer. I totally agree with Vic’s point on the network, it is the education of their compliance department, if they let in say half a dozen lenders then no one lender has the answer. I believe that it is about coming in as an industry together and saying this is what we are doing and this is what’s happening, there is nothing negative going on. The importance of the lawyer I think is so significant in the timeframe of a deal, and a lawyer that ideally can act for both. Why lenders still insist on two lawyers is normally to do understanding that it is just a buy-to-let or a residential, where if it was a term lender then only one lawyer would be needed in that transaction. JN: Are we seeing a rise in older people needing or using bridging with downsizing? CB: We have seen an uptick; I think it is linked to the general uptick in the activity of the market. We have been doing downsizing retirement bridging for a number of years, I wouldn’t say there has been any particular increase, apart from the general rise across all markets, but it is quite a big area having said that. These kind of customers do tend to be more cautious, but also you have to remember these tend to people who remember interest rates being 15% or more, so if you are proposing a bridge at 6% to 7% then it isn’t too scary for them. AT: I think there are so many regional variations in the housing market as well, in the old days it tended to be similar across the whole country, but now it is very different region to region, even comparing the South East and the South West. So, it is hard to actually answer that question without going into all the different areas. B I MARCH 2020   BRIDGING INTRODUCER

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INTERVIEW

Exciting times

ahead... P

recise Mortgages’ parent company Charter Court Financial Services completed a combination with OneSavings Bank in October 2019, which hit the headlines as it created a UK bank worth £1.6bn. Roger Morris, group distribution director, and Richard Lawton, head of short-term lending, discuss their journey at Precise Mortgages, how working for the lender makes them proud and how they are adjusting to life post-merger. HOW IT ALL BEGAN Morris was brought into Precise Mortgages in 2010 to develop and launch their bridging proposition. He had been a broker in the early 1990s before moving into packaging. It was then that he identified a gap in the market and took the plunge by launching his own business. Following this realisation, Morris launched EM Financial in 2001 along with Simon Mouncher and then worked as sales and marketing director at Affirmative Mortgages, focussing on bespoke customer needs. But Precise Mortgages was his next move. “I was asked by Precise Mortgages to build their team and build a solid bridging proposition along with near prime buy-to-let,” he adds. “My history is near prime. Being a landlord for 30 years also means that I am very interested in buy-to-let, so it was a perfect storm.” Lawton was originally appointed as an underwriting manager in 2011, which Morris claims was one of the most significant and key appointments made at the business. “We can all create criteria, we can all create a vision, but it’s the safety of the delivery of that service proposition that is important,” says Morris. “Finding someone of Richard’s calibre was the hardest part. We were fortunate enough to get Richard, and our journey has been borne out of that.” Morris and Lawton met when the latter was a regional manager at GMAC, and Lawton’s background

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BRIDGING INTRODUCER   MARCH 2020

Roger Morris and Richard Lawton from Precise Mortgages discuss their journey to the lender and how it is adapting following its recent merger

is extensive. “I had a background of commercial, semicommercial, residential and buy-to-let,” he says. “I also have experience in near prime and bridging lending.” The invitation to join Precise Mortgage’s team was attractive, but not just because of their exciting proposition. “To come into Precise Mortgages’ bridging project was very exciting Precise Mortgages’ bridging was very exciting, particularly knowing the people who were behind the business,” Lawton says. The pair speak every day and have a great working relationship, which makes challenges easier to face. “The trust between us is undeniable,” says Morris. “It’s that honesty and connection that allows us to facilitate change.” A TENSE TIME Back when Precise Mortgages began its bridging proposition, it was a time when the grips of the financial crisis were rife. “We had a great product but at the time funding was restricted,” Morris says. “It was 2011 and the depths of the recession. So how could you sell a product that was perceived as expensive?” Undeterred, Morris and managing director Alan Cleary took matters into their own hands. “We hired an old London bus and went around the UK explaining to brokers what we were all about,” he says. Education remained an important factor to Morris, www.sfintroducer.com


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Richard Lawton and Roger Morris

and his 30-year stint of running workshops has helped him become a well-known figure in the industry. “I have run workshops for 30 years,” he says. “As long as what you’re talking about is honest, not all about you and people can take away important things about the subject matter that could help feed their family, then it will work.” Slowly but surely, through going around the country, the deals began to come in. “The next significant step was Richard taking those deals and, with confidence, delivering a list of requirements that were not prohibitive but logical,” Morris says. “This allowed us to fund the deals. In those early days we did a lot of big deals and moved very quickly. Everyone was involved and got behind the team.” RECRUITMENT Precise Mortgages prides itself on employing the very best and believes this sets it apart from the www.sfintroducer.com

competition. “Our ethos has always been to employ the best in their specific field,” Morris says. “The uniqueness of Precise Mortgages is that we have so many industry leading experts, so when we put together the bridging proposition we were able to use strength in credit, underwriting, sales, marketing and products.” The duo believe that being based in the Midlands rather than the City is something that may phase some. “When I started my business in Teeside, to get the big loans, I thought that I needed to have an office in London,” he says. “So we opened a correspondence lender in Oxford Circus in 2003, and had 40 members of staff because we believed we needed to. It is a fallacy.” Recruitment is more than just location to the pair however, and Morris believes that a good bridging BDM is hard to find. “Even today, they are like hens’ teeth,” he says. “To try and find someone with a diverse set of skills is tough.” → MARCH 2020   BRIDGING INTRODUCER

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INTERVIEW

Lawton has a team of 38, who Morris claims are “quality bridging underwriters”. This, in turn, has created a positive attitude in the office, with brokers being shown respect at all times and a premier panel of lawyers being used in all cases. Lawton credits his “hard-working and knowledgeable” group of underwriters who understand how to assess risk and appreciate a solid exit strategy. “It is very unique what we have,” he says. “As I have mentioned, good quality underwriters are hard to find so we are lucky.” EDUCATION As much as workshops are an integral part of Morris’ day-to-day, Lawton emphasises how important internal training is. ”Yes, it is hard to get a true bridging underwriter into the team, but as long as you have someone that you can work with we can, as a team, train the individual and get them to understand and assess what’s in front of them.” This understanding of deals and internal training is what the duo believe keeps their decline rates low. “We have such a low decline rate which shows how we educate the sales team,” Morris continues. “It’s a numbers game. In my 30 years of being in the industry, this is the first year that I have the networks coming to me and asking me to do workshops.

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“I’ll be spending the next six months on the road aiming to increase education.” AHEAD OF THE MERGE Following the combination with OneSavings Bank in October 2019, the pair are looking towards the future and admit there is excitement in the air. “It’s exciting to see what opportunities arise from the combination,” Lawton says. “We are a bigger organisation now with a bigger breadth of ways we could lend.” Morris believes that the combination was a natural next step for the lender.“The combination in my head was always logical,” he says. “When the combination came around it was the next step.” Lawton highlights that a mantra has been founded since the combination occurred which is that they will be “bigger, better and stronger” and believes that big opportunities are inevitable. The combination is a key focus for Precise Mortgages in 2020, with the brands working together to create a competitive proposition whilst keeping their own identities. “Over the years we have constantly changed and adapted to try and stay ahead of the curve,” Lawton says. “Now the combination has completed, we want to ensure the team remains focussed on continuing to deliver exceptional customer service.” B I www.sfintroducer.com

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IN OUR OPINION

Preparing for change I

’ve worked in the bridging industry as either a customer, broker, packager or lender for more than 30 years and I’ve seen a lot of things change in that time. However, there are certain things that have never changed and will never go out of fashion. The first is the importance of great service. As time is usually of the essence with a bridging case, helping customers get the finance they need as quickly and efficiently as possible is vital. Rate is always a consideration, but has to be married up with delivery and the ability of a lender to conclude a deal. It’s essential that a broker has 100% confidence in a bridging lender; it’s always about the consistency of service and an understanding upfront of what a lender wants and needs to get a deal offered quickly. CUSTOMER REQUIREMENTS The next thing is the list of requirements that a customer must meet to obtain the offer. It’s important that lenders send out a complete list of requirements on day one to give the broker and their customer the best chance to get all of the information required together. From this list, they can determine the confidence the lender has in the ability to fund the deal. So often I’ve seen lists sent out which ask for things which are nice to have, but aren’t an essential part of the process which in turn can delay the case or torpedo an application and leave it dead in the water. It’s also important that a lender can arrange for a valuation to be carried out and completed as quickly as possible, as well as allowing a lawyer to act for both parties. The ability to have one lender and one lawyer working together on behalf of a customer ensures their case can be completed as quickly as possible. It’s worth bearing this in mind, especially if you’ve got a customer who needs to quickly access finance to help them meet the new energy efficiency rules which are being introduced on 1st April or the proposed

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BRIDGING INTRODUCER   MARCH 2020

Roger Morris, group distribution director at Precise Mortgages, discusses upcoming changes in the buy-to-let (BTL) market and how Precise can help

mandatory electrical safety regulations which are now waiting for parliamentary approval. In case you didn’t know, from 1 April landlords have to ensure that existing tenants are living in properties that meet minimum energy efficiency standards (MEES). From April, properties with an energy performance certificate rating of F or G – the lowest possible ratings – will be considered unrentable. Any landlord found not to be complying with the new rules could face a fine, with the amount dependant on the type of infringement and the length of non-compliance. This is the latest phase of the MEES roll-out and is the first time the standards have been extended to existing tenants, having previously been introduced for new lets and tenancy renewals back in 2018. LANDLORD REGULATIONS Then, if the regulations are passed, from 1 July landlords will need to ensure that electrical installations are inspected and tested by a qualified person prior to the start of a new tenancy. They will then need to ensure that inspections are carried out at least every five years. For existing tenancies, safety tests will need to be carried out by 1 April 2021. A breach of the regulations could see landlords fined up to £30,000. It all means there’s a good excuse for brokers to get in touch with existing and previous customers to www.sfintroducer.com


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make sure they’re prepared and encourage them to check their property meets the minimum standards. For example, it might be worth putting together an informative newsletter to let them know about the changes and telling them about their responsibilities. Contact and keeping customers up-to-date with the latest information is key to relationship development. HMO POTENTIAL With more landlords looking to explore the opportunities presented by Houses in Multiple Occupation (HMOs), it could also be worth doing a newsletter highlighting any Article 4 directions in the local area. HMOs are properties which are occupied by more than one family and made up of three or more people, and investors have been using permitted development rights to convert family houses (C3 use class) to small HMOs (C4 use class). A newsletter could also help protect customers from having to submit a full formal planning application that will be required if they want to remortgage, issue a new tenancy or sell the property in the future. Here at Precise Mortgages we’ve seen an uptick in requests for bridging finance covering a range of different needs. Downsizing is a very common area and we’ve seen an increase in the number of people wanting to take advantage of a bridging loan to move to a smaller property or move to a house that’s closer to their children. Another reason is because they want to avoid chain break. Bridging finance gives them the flexibility to buy and move into a new property, whilst allowing them more time to sell their existing home.

Roger Morris

www.sfintroducer.com

DEDICATED SPECIALISTS Hopefully you’ve found this article interesting. If you’re not sure what step to take next, first of all take a look at our website – www.precisemortgages.co.uk – to familiarise yourself with the products and rates we offer. Secondly, if you’ve got any questions a member of our sales team is on hand to answer any queries you may have. Thirdly, we have dedicated bridging specialists who would love to come into your business and show you how the specialist lending market can help you and your customers. Get in touch today to arrange a workshop. B I MARCH 2020   BRIDGING INTRODUCER

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REVIEW

BUSINESS XXXXXXXXX

Will your values deliver success? Alan Dring director, MAD Approach

A

s I write this piece Liverpool FC are just four wins away from securing their first Premier League title. Over four years ago a new management team headed by the charismatic face of the club, Jürgen Klopp, was brought together to reestablish the club as the best in the world and whilst success has not come overnight they are now on the verge of being able to claim that title. What has this to do with the financial sector and the thousands involved in it who have no interest in football, I hear you say. Well I think it has a great deal to do with every industry’s future if we consider the values that Klopp introduced or reinforced when he presented his first plans designed to become the world’s best. I spend a great deal of my time reviewing lenders and brokers websites and most of them promote their values that they anticipate will set them aside from the competition and give them competitive advantage. Klopp and his committed team have been doing just that. Liverpool FC has based their strategy, plans and relationships on many of the following values which I see highlighted every day on FS promotional material. These values are laudable, but you need to assemble the right team (your USP) to deliver them via a well thought out master plan designed by an experienced management team that involves all team members in its content. I would commend the following values to be considered in any planning process a lender, master broker, packager or broker is preparing, to give them the competitive advantage the demanding premier lending

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Market demands. Just a reminder that it is incumbent on the provider to determine at the interview stage if new recruits will be able to deliver to the company’s promoted values.  Trust Lenders ask clients to trust them, but can lenders trust all their people to deliver to their promoted values? I would like to think this should not be in doubt, but my experience tells me different. There is no doubt Klopp has absolute trust in the team he has recruited.  Common sense Broker clients expect lenders to apply common sense to their application not software solutions. However how many apply common sense to assessing how good the competition is in their market. Just imagine where Liverpool’s plans would be if they did not have a comprehensive dossier on their next opponents.  Dedicated professionals Lenders and brokers must ensure clients perceive their team as dedicated experienced individuals. Even if you do not follow football it is common knowledge that too many of today’s players are overpaid and underperform. Not the squad Klopp has pulled together his players have been well researched before taking them into the team.  Reliable Can lenders rely on their broker relationships and can broker clients rely on the lender? They all boast that they can, but few have a KPI that substantiates that claim. The Anfield faithful know they can rely on the squad and all up to the board to do what they promise. The same is currently not the case at Manchester United, the once sector leader, so everybody needs to constantly review their reliability.  Pride & reputation Can brokers and lenders always take pride in what they do and how all their team do it. Awards reflect performance, but no one can rest on their laurels and past performance. How many of your

staff are proud of what the business does and proud of their personal contribution. Do you have a queue of dedicated, reliable, trustworthy professional waiting to join you? Liverpool have much to be proud of over their 128 years, but the future was Klopp’s priority and his people are taking pride in their contribution to the club’s future success not their past glories.

“Just imagine where Liverpool’s plans would be if they did not have a comprehensive dossier on their next opponents”  Service levels Every site I review boast outstanding customer service and many display testimonials to substantiate their claim, but I question if all staff of the business are made aware of what the KPIs are that confirm outstanding customer service. Klopp is forever saying that what happens on the pitch (the coal face) regarding a level of performance that brings results and thus success is reflected throughout the club and he makes the point that he and his immediate staff try to mix with as many employees of the club as they can. Apologies for focussing on my team, but they are outstanding now and I think the comparison with ambitious lenders and brokers is worthy of consideration. The title of the piece is about getting it right, so your success is repeated year-on-year. That is the challenge Klopp has. The Premiership is the most competitive league in the world, but in context no more competitive than providing outstanding performance in the financial sector, so I wish you all every success as your try to emulate the outstanding success of the mighty Reds. B I www.sfintroducer.com

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