What made you look at bridging when there are so many lenders in this sector ?
We believe property professionals have an issue that the sector isn't fully addressing - how to access the often considerable amount of equity they have built up in their portfolios.
Our PortfolioBuidler solution can be the key to unlocking this equity by providing up to 100% funding. This is because we aren't lending purely on the value of property portfolios; our underwriting decision is based on the property professional's business model and this is a key difference.
It is important to stress that we aren't bringing out a vanilla 100% LTV product and certainly aren't competing with leading bridging lenders such as Amicus, Dragonfly and Masthaven.
The major players are all bound by LTVs of around 70%; which for standard bridging is where it should be. We differ as we are able to provide additional funding because it is the business we are underwriting and the value of properties are only part of the story.
We are a niche player with a different business model and a number of different funding lines that support our proposition which enables deals to be completed.
We always adopt a very collaborative approach and, subject to the business case, happy to sit behind other lenders as a subordinated lender.
Why have you adopted a strategy of creating a dedicated channel for brokers and financial intermediaries ?
It makes good sense to listen to those that are going to provide the business! Before a recent major industry award ceremony we started promoting our PortfolioBuilder solution. At the event almost everyone we spoke to had the same question - "can we offer this on an exclusive basis to existing and prospective property professional customers?."
As a result we rapidly created an exclusive broker/financial intermediary only channel for our flexible bridging solutions.
Why do think your PortfolioBuilder product will interest property professionals?
Our research shows that £70bn has been added to buy-to-let equity over the last two years as house prices have risen 15% nationally over this period and a staggering 30% in London.
Property professionals can be equity rich but options poor.
Prior to the financial crisis many had the foresight to take out tracker mortgages around just 0.5% to 1% above Base Rate. Understandably, the last thing they want to do is unlock the equity in their portfolios by remortgaging as this would significantly increase their overall borrowing costs.
This can be extremely frustrating as they are unable to use their equity to take on additional properties or improve their housing stock.
Our experience is that property professional's are extremely interested once a broker/financial intermediary explains the key difference in our approach and how 100% funding can be provided.
Talk of funding up to 100% understandably makes people nervous so soon after the financial crisis - aren't you worried about this ?
I understand where the question is coming from, however, you have to be careful not to compare apples with pears. Property provides the security but our lending decisions are based on the quality of the business.
To date we have funded over 200 businesses and achieved our target of zero capital losses! Our skilled underwriters ask the key questions that establish our funds go to businesses built on firm foundations with the ability to repay.
What do you foresee for the next 12 months in short term lending ?
We all know that the world is a fast changing place and I can see a blurring of lines. For example, Bridging Loans that are almost the same as Commercial Mortgages because of the rates being charged and don't be surprised if we start seeing two to three year bridges. I also think newcomers will drive innovation, cause us to question how we define 'short term lending' and, of course, provide healthy competition.
