Hi everyone, on what is possibly the hottest day of the year.  I have full respect for all those people working all day with masks on.

I thought I should blog this week on how fantastic some of our lenders have been recently.  With the furlough schemes coming to an end, there have been quite a few pinch points in the conveyance process, due to what I call ‘musical chairs’ – really a continual swapping of staff either through furlough or holidays.  What is wonderful is the patience shown In these instances. As a hand holding type of brokerage, we value our calls with lenders.  With all the changes in criteria and risk appetite, it really does require patience to manage all stakeholders in the process.

The 3 lenders I am going to highlight today are:

Fleet Mortgages…

Although they are the vanilla end of specialist and work through a portal system, they have been amazing.  I can honestly say that their communication and seamless transition on a case between different underwriters  is unbelievable.  They really have removed the stress from our cases, which at the moment is worth it’s weight in gold.  They are effective communicators and have such a kind manner. And they always pick up the phone to save a long email conversation.  This week we have had a mortgage offer in under 3 hours from final satisfaction of evidence, in a world when everything appears far slower than ‘normal’.  Thank you Fleet!

Lendwell….

As most of you may know, these guys only launched at the end of February 2020.  We work with a lot of Northern investors, particularly in the HMO and conversion area, and Lendwell have a straight arrow approach of the least resistance . They are such a refreshing lender, who deliver on their terms and do a lot of work upfront to ensure we are able to do the same to our clients.  It doesn’t feel like we are in this weird world when working on cases with them.  High five Lendwell!

Shawbrook…

Well these are the anchor for us at the moment.  They have kept as bullish in this climate as they can, but it genuinely feels like they want to be back to pre-COVID as soon as possible.  I appreciate that for a larger lender, this can be very difficult.  Their ease of having an instant, professional out of office service is incredible.  We have a great BDM in Lee Williams, who is tireless in keeping us up to date, without offering hollow guarantees.  It feels like they really want to get the business over the line, adjusting processes, if necessary. Thumbs up Shawbrook!

It is at times like these, that loyalty and keeping to the original terms are so important.  The market is pretty buoyant, but all of these lenders have helped lower the stress levels at a time when all our anxiety tables are higher than usual. It all goes to show that although low headline rates are great, delivering on service is what really counts right now.

Stay safe, stay sane and have a good weekend

This week has been a really positive week for mortgage news and I wanted to share some with you! After the stamp duty announcement last week it really is looking like we are starting to see some shoots of normality.

New lower rates

The market is becoming more competitive again and we are seeing lenders compete in the 75% LTV space which is really encouraging. Precise have dropped their single let limited company product rate to match what Landbay are offering. This is a really positive sign that lenders are back to pushing for business through the door and went to increase their volumes.

We have seen an increase of rates across the specialist lenders since lockdown so it’s really promising to see these rates coming down again.

Moving towards 75% LTV across the board

Since March we have seen a reduction in loan to values with most lenders as they assess the market and the future of property prices. Now we are starting to see that return almost to ‘normal’ which is really promising:

• we can get to 75% (gross) on most bridging cases, including heavy refurbishment where you are funding the refurbishment costs yourself. Where you are borrowing the refurbishment costs then this is restricted to 65% of the GDV, but the initial loan itself is not restricted (as long as there is sufficient profit).
• We can get up to 75% on term limited company mortgages for single let properties with rates as low as 3.54% on a 5 year fixed with specialist lenders (circumstances vary so please speak to us about what we can offer for you), which is as low as we could get to pre-COVID
• We can also get to up to 75% on small (up to 6 bedroom) HMOs on a bricks and mortar value. We have got lender options for this too which is fantastic as we can cater for many clients and their circumstances. We still have hybrid valuation options up to 75% too, although these are more limited for now.
• For large HMOs we can get up to 70% with some lenders. This is great news as we have been a bit restricted in this area previously. I am hoping we will be back to 75% shortly – fingers crossed!

Holiday lets are back

After a few months of uncertainty around holidays in the UK, now that we are allowed to travel, lenders are turning on the tap for holiday lets!

This is great news, especially as I think that the UK will have an increased popularity for holidays moving forward. A combination of people trying out British holidays this year and seeing what amazing places we have, as well as an inevitable increase in cost and apprehension towards foreign holidays over the next few years will mean we need more holiday rentals. I think self contained units will be popular as people want their own safe space, which is great news for investors.

We have a couple of lenders available, one in particular is very appealing. They will lend up to 75%, don’t require any accounts or holiday let experience (as long as you have other investment experience) and will use the market AST rental so there’s no need to demonstrate income you have received for the property.

There are a couple of restrictions so it’s best to speak to us about your circumstances and whether your property fits. The main one is that it needs to be in a location that is suitable for someone to stay for a week. This means it does need to be a holiday location, rather than a city centre.

And we’ve had some planning changes!

Add to all this, the government have announced the relaxation of planning to allow more properties to be converted to residential and extended both out and up.

These changes will come into force in September, so this should increase the number of available properties and allow investors to take advantage of new opportunities. Any refurbishment works that fall under permitted development are easier to complete; they also offer the buyer more certainty over what can be achieved.

As always, if you have any questions then let us know, we are happy to have a chat!

Morning everyone – it’s Friday again.  I personally feel that the marathon mentality is now more important than ever; especially for you small business owners. There is, as you know, very little down time.  Be kind to yourself and have courage to take some time off.

Today starts with a bit of a rant, as the methodology behind valuation figures is something really frustrating me.  As you are all aware, there is an array of valuation figures available to surveyors; market value; vacant possession; 180 day market value; 180 day vacant possession; 90 day vacant possession; hybrid; fully commercial….. depending on the lender and property – but does it really make any difference currently to the figures that valuers are putting down?

I appreciate that these are uncertain times, but as an example we recently valued the same 5 flats on their own freehold through two different lenders and only a few weeks apart. The first valuation was on the 28^th May and second was 23^rd June.  The first had a market value of £1,405,000 and a 180 day of £1,260,000, with demand under 3 months.  The expected value was £1,575,000. The second valuation came in as £1,210,000 market value and no 180 day figure.  How can anybody’s expectations be managed when this happens? How can anyone believe that the price is fair and not just a finger in the air depending on the time taken and the risk appetite of the valuer.

Yet it’s not all bad news

Prices on residential purchases seem to be there or thereabouts,  and the valuations we are receiving don’t seem to be getting much of a haircut. This is encouraging for investors purchasing projects at the moment and we mustn’t forget this fact. It seems to be the end values that are being reduced.

So what are we doing about it?

What we need to learn from our frustrating week is that it’s so important to look at your figures and work our your worst case scenarios going into a deal. We also need to look at options on the term mortgage with minimal exit fees or a short term fixed rate where we can.

We have started working with a new lender who can not only look at a hybrid valuation for HMOs, but they also offer a tracker product with no early repayment charges. This is in response to needing a lender with more flexibility, while still offering what we need in terms of day one remortgages, and allowing investors funds and director loans. These, among other things, are integral to us offering products that work for our clients. Having the flexibility of a penalty free tracker will add another option for our clients to allow the current issues to pass and then look to refinance at a later point.

It’s a hard task trying to stay one step ahead at the moment, but that’s what you as investors need from your broker – we are doing our best to do that in challenging times!

Hi everyone, hope you are all keeping well.

Capital raises are an important part of the investor business plan – particularly at the moment, when properties prices are likely to come down.  So banking any excess equity allows the chance to get to the auctions and opt for some cash purchases or use it for deposit monies.

That said, currently lenders can have an issue with capital raising, particularly if an ongoing property is not on the cards.

The right choice of lender is really important when considering this. 

We have recently completed on a case which all started and completed within COVID. The client had two unencumbered properties which he wanted to refinance WITHOUT any evidence of where the funds are going. He also wanted 70% LTV.  This was all achieved in 6 weeks.  We started with a desktop valuation, which was all that was available at the time although the confidence level wasn’t enough and we had to move lenders. In the mean time another option Had become available with a full valuation as lockdown eased and this allowed an extra 5% LTV.  We completed a refinance within 6 weeks with this lender even with all the issues that COVID threw at us.

Both properties, by chance, had lease extensions, but those were not paid for out of the funding.

It really is important to understand what you are trying to achieve, before the lender is chosen.  Lenders are still adjusting their appetite regularly, so keeping in constant conversations with them is really important for us to keep abreast with all the updates.

It’s also so important to consider the trade off between the LTV you are trying to achieve, and the interest rate. It may well be that we have to sacrifice something to allow you to have the funds to move on to your next deal, but looking at the bigger picture is key in this market.

Have a good weekend, especially if you are venturing out!