All posts by Colette Lowe

Let’s take the lead and not wait for regulator intervention

I am a great advocate for business generating profits however there is a fine line between fair and ethical practices on which a long term business can build and some of the less ‘attractive’ practices.

In my opinion the recent media which continues to try and justify ‘Default’  rates for short term ( bridging lending ) treads the wrong side of that line. The argument made FOR, which I have taken directly as a quote from a recent article  is:  ‘ Default rates help to focus the mind of a borrower as they approach the term end of a facility and encourage them to discuss alternative options before it’s too late to do so.Let’s take the lead and not wait for regulator intervention

In my opinion this is wholly a false premis. A responsible bridging lender should be in regular contact with a borrower at various stages of the contract , gently reminding the client of the term remaining and ascertaining the level of progress made in respect of the exit. This gives the lender an understanding of any problems which may arise AND the opportunity to discuss those ‘alternative options’ . The application of a default rate should not be a  pre-requisite of these discussions.

Bridging finance is already a relatively expensive way for a client to borrow ( though I accept much cheaper now than in years gone by ) and sensible lenders with good underwriting should be able to make a fair and ethical profit on their day 1 rate. Moreover, on those occasions when things do not go to plan, the lender continues to profit without additional acquisition costs by applying further interest at the initial contractual rate for that additional time. In my opinion Default Rates have only one benefit and that is to a lenders ‘bottom line’.

As a responsible lender I would ‘implore’ all participants in the market to carefully consider if this model is in all our best interests. Let’s take the lead and not wait until inevitable intervention by regulators who recognise poor practice!

The benefits of being risk aware

The benefits of being risk aware

Comment from Ian Broadbent, Director at Holme Finance Bridging Solutions.

It is unusual in the short term lending market to have been established pre 2000 however such experience, whilst resulting in many grey hairs for it’s directors, does give HFBS a unique perspective on the market. The greatest period of growth in our market has occurred over the last 12 years and been sustained, in part, by a strong property market. Is it inevitable this will end?

This sounds like a negative opening but it is not intended to be! At HFBS we would answer the primary question, of course and so what? The property market has always been cyclical and it is perfectly possible ( even probable ) that we are entering a period of much steadier growth/ demand and even some modest potential softening of prices within our underlying assets. This is not brexit, fear of Corbyn or taxation changes to investment property, although these all have an impact, it’s a cycle!

As always good quality, professional intermediaries and lenders will be best placed to work in this more ‘staid’ environment. Some more naïve players may ultimately pay a price and the market may contract a little but the best will continue to provide a valuable service to clients. Good preparation is simply ensuring that those important relationships are formed with experienced parties who understand the need for a long term sustainable market. At HFBS we have the experience to meet those demands and will continue to view applications in a positive and prudent manner.

With three key members of staff sharing almost 100 years of experience between them and a unique bridging proposition we intend to be here a very long time.

HFBS HELP CLIENT TAKE BACK POSSESSION OF HOME

HFBS HELP CLIENT TAKE BACK POSSESSION OF HOME

When an interest only mortgage came to the end with no funds to pay the final sum it looked like an important family asset was about to be repossessed, until Holme Finance Bridging Solutions approved a loan to recover the situation.

HFBS HELP CLIENT TAKE BACK POSSESSION OF HOMEThe client had mistakenly ignored the due date for final repayment and latterly failed to secure refinance due to poor credit. Now, with the realization that a sale was the obvious exit, the mortgagor had lost patience and was due to repossess.

HFBS recognized that the client, albeit belatedly, had acknowledged the need for a sale and the best outcome for them was to secure this themselves with a sensible marketing period (avoiding significant legal costs and the potential for a sale to be completed by the mortgagor at a lesser price). Approached for the mortgage redemption sum of £216.900, HFBS were able to complete very quickly providing the client with the best outcome.

Ian Broadbent, director at HFBS says: “The property was valued at £385,000 so the LTV looked good enough to allow for a satisfactory end to what was a very stressful situation for the client.

“We always look for the best outcome for clients. It was clear that allowing their property to go into possession with the monthly accrual of costs and fees wasn’t going to help but only compound the situation. Properties in possession typically don’t achieve the value required. This way we’re confident of a successful sale at the market rate.”

HFBS provided the loan over a 12 month term and a rate of 0.95% per month to be paid once the property is successfully sold.

 With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

“You can’t teach experience” HFBS talk risk.

While not entirely isolated from the considerable increase in bridging competition our particularly significant USP’s have insulated us to some extent. Speaking as a lender with a significantly longer track record than most we recognise that prudent lending can often be ‘stretched’ in the pursuit of business and a softer line taken to risk. With this in mind we have adopted ever increasing rigour in ensuring that we can both meet client needs and assess risk in a way which ensures our model is long term sustainable.

As a smaller lender we have always managed business volumes carefully and they remain well within the capabilities of the existing staff structure. In respect of experience this is one of those occasions when the phrase ‘you can’t teach experience’ comes into its own. Fortunately our three key members of staff reviewing these matters have almost 100 years between them. For those not so fortunate I suspect acquiring such experience is the number one difficulty of the job.

Bridging is still a relatively new industry (certainly at anything like this scale) and individuals with our skills are thin on the ground. Whilst healthy competition is good there is always a risk that some less experienced companies may simply not price for risk, underwrite a sensible LTV, or ensure adequate exit strategies exist in order to get the ‘money out of the door’. This can give a firm a short term appearance of success, but such risks always come back to bite. In my view the single biggest risk today is the over stretching of LTV’s at the top of a property cycle.

Fast Acting Finance Rescues Property Development

Holme Finance Bridging Solutions (HFBS) quick thinking and speed of advance on a 70 thousand pound loan didn’t just save a development project but ensured the developer didn’t pay crippling default fees on an existing loan.

A broker looking for a solution in a hurry approached HFBS. Speed was of the essence as the client had an existing bridging loan account due to go into default.

Ian Broadbent, director at HFBS says: “Due to unforeseen delays in the building project the developer was heading for an horrific default rate, and hefty fees. He was almost there with the property development but required peace of mind he wouldn’t be increasing his debt to an unmanageable level. There was also the additional requirement of an additional £9,000 to complete minor works and prepare the property for sale. Many companies would shy away from this kind of deal, but given the facts we were confident in the client’s ability get the project completed.”

HFBS were able to view the security address. The works were very well progressed and those completed were done so to a very high standard. In total a 70k net loan was advanced allowing the property to be completed for sale with the additional breathing space of a further 12 months to get a sale through.

With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

HFBS offer one the LOWEST second mortgage rates in the bridging finance market starting at just 0.95% month on advances from £5,000. HFBS Bridging Solutions have been advancing short-term funds, via a limited panel of intermediaries, for over 15 years with complete authority on their lending. Simpler, quicker, cheaper.

QUICK TRANSFER OF FUNDS SECURES BUSINESS FUTURE

With a reputation for working fast Holme Finance Bridging Solutions were approached by a broker for an urgent bridging loan to redeem an existing bridging loan and raise additional funds to ease business cash flow.

HFBS were approached for a £47,565 to be secured against an investment property. £18,500 was required to repay the existing first charge bridging loan and the remaining funds were used to clear a business cash-flow problem.

Dan Yendall-Collins, senior underwriter at HFBS says: “As this was a first charge and a relatively small advance we could be confident that we could do the deal without the need for a full valuation. Based on comparable evidence and a desk-top valuation, we could see that the security property was clearly going to be worth in excess of £500,000 and so the only delay was getting the redemption figure through from the existing first charge lender.”

On the day HFBS received the case the client offer pack was immediately issued. The following working day HFBS visited the client to confirm the contract and two working days later received the redemption figure, which was immediately paid out.

With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

HFBS offer one the LOWEST second mortgage rates in the bridging finance market starting at just 0.95% month on advances from £5,000. HFBS Bridging Solutions have been advancing short-term funds, via a limited panel of intermediaries, for over 15 years with complete authority on their lending. Simpler, quicker, cheaper.

bridging boost

Custom Designed Luxury Home Receives a Bridging Boost

Holme Finance Bridging Solutions (HFBS) bridging boost helped property developer redefine luxury living in the home counties with a £255,895 bridging loan earmarked for the completion of a high-end development.

bridging boost

Positioned in one of the most exclusive real estate settings in the UK the development suffered a minor hiccup when the developer’s mortgage lender would not advance further funds to enable completion of the second fix, leaving the developer unable to realise an eventual sale of his investment.

Ian Broadbent, director at HFBS says: “This was a catch twenty two situation for the developer. Most lenders will not lend on a part-developed property which left the developer in a tough position unable to continue. The property had a £750,000 mortgage but was valued after first fix at £2.5 million and estimated value at completion of the second fix and landscaping at £2.8 million.

“We could see the potential, the development went beyond good quality, it was outstanding, the epitome of high-end luxury. It was clear to see the developer was very serious and committed to completing the property, we had no issues supporting his plans and were very happy to advance the loan.”

HFBS approved the £255.895 loan in December ready for when it was required in early February. The final paperwork was signed at the end of January with funds provided during the first week of February on 12 month terms.

With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

HFBS offer one the LOWEST second mortgage rates in the bridging finance market starting at just 0.95% month on advances from £5,000. HFBS Bridging Solutions have been advancing short-term funds, via a limited panel of intermediaries, for over 15 years with complete authority on their lending. Simpler, quicker, cheaper.

In uncertain times, think certainty!

Brexit! Not again I hear you scream! But this is positive news so please bear with us.

Many introducers have recently reminded me of the absurd knee jerk reaction of some lenders following the June 2016 referendum result and the inevitable return to normal when nothing much changed!

As with all such reactions whilst short term in nature it did cause significant disruption to introducers and their clients alike. Here at HFBS we are known for our straight talking, there is never any uncertainty when dealing with us, which is why we want to take this opportunity to put your mind at rest.

Take comfort in amidst of all of this uncertainty that we have continued to shun bank or other corporate funding to plough our own furrow with significant increases in our private funding lines and a growing book value.

Brexit or remain, I suspect we can all agree on one thing, the continued lack of any certainty at such a late stage is farcical. That is why we are pledging now that there will be NO knee jerk reactions from us, NO reducing LTV’s, No increasing rates and definitely NO pulling of our products in the days following an exit however that takes place. We value our introducers support and will continue to do so. Forward plan with confidence!

HFBS is one of the very first to be involved in bridging finance. We’ve been there and seen it all to come out wiser and stronger.

Be confident that as a privately funded lender, we can make immediate decisions and in most cases complete without the aid of solicitors. We’re all about getting someone where they need to be and supporting both them and their introducer to a successful exit strategy without imposing penalties!

We are happy to consider the ‘quirkier’ deals or those outside our terms. HFBS are absolutely dedicated to supporting and building long lasting business relationships.

Bridging loan completes purchase

Bridging Loan Completes Purchase

Holme Finance Bridging Solutions provides property developer with a first charge bridging loan for 68 thousand pounds.

Bridging loan completes purchase

The loan was required to purchase a three-bed semi detached house that had been converted into two flats. In a derelict state it was ripe as a development project to bring it back to a habitable state and profitable investment.

Contracts were exchanged with a delayed completion date set at six months allowing the renovation to begin in earnest to make the property habitable and therefore mortgageble.

Dan Yendall-Collings, senior underwriter at Holme Finance Bridging Solutions says: “In theory the delayed completion date would have enabled complete renovation works at which time upon completion a traditional mortgage route could be explored. However with several unexpected problems and delays the six-month period passed quickly. With the properties not quite completed, and the completion date looming, the developer’s broker approached us for a bridging loan.

Just days away from not being able to meet his commitment, and potentially giving the vender back two fully renovated flats for nothing, HFBS provided a £68,000 bridging loan against a valuation of £137,500 within seven days enabling the developer to complete on the purchase as agreed and organise refinance once he had secured tenants for both units.

With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

HFBS offer one the LOWEST second mortgage rates in the bridging finance market starting at just 0.95% month on advances from £5,000. HFBS Bridging Solutions have been advancing short-term funds, via a limited panel of intermediaries, for over 15 years with complete authority on their lending. Simpler, quicker, cheaper.

HOUSING ESTATE DEVELOPMENT COMPLETES WITH BRIDGING LOAN

Holme Finance Bridging Solutions (HFBS) ensure building can complete on a housing estate development site valued at £900,000 with a £50,000 bridging loan.

With buyers lined up for the first two of a select development of six homes, foundations were rocked when the property developer’s go-to funding partner, a crown funding company, found themselves unable to advance the funds as quickly as required to enable to completion of the first two homes.

With the option of waiting for funds, and the knock-on consequence of losing the significant sales of the first two properties, the developer had no choice but to seek alternative funding, and quickly.

Dan Yendall-Collings, senior undewriter at HFBS says: “Our unique ability to complete quickly comes into its own again. The developer couldn’t wait for funds to complete the properties, it was an urgent need that could have had devastating consequences if not approved.

“We took the enquiry on a Thursday, prepared the relevant documents the same day, visitied the site Friday and paid out the folllowing Monday morning. With a three day turnaround, and minimal site downtime, the progress of the development was saved.”

With an average completion taking less than seven days from enquiry to money in the bank, no solicitor involvement, no minimum valuation, and entirely privately funded, no bank mandates, no fixed rules, HFBS really mean business.

HFBS offer one the LOWEST second mortgage rates in the bridging finance market starting at just 0.95% month on advances from £5,000. HFBS Bridging Solutions have been advancing short-term funds, via a limited panel of intermediaries, for over 15 years with complete authority on their lending. Simpler, quicker, cheaper.