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4th August 2026 | Baya financial

Month: August 2020

Who’s up for a bit of commercial funding?

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Happy Friday everyone.  Sadly back to the UK weather – it really was very lovely working from a holiday apartment.

The commercial sector has been hit much harder due to COVID.  To be honest, due to the increase in online purchasing, the larger retailers were already having issues, but COVID is definitely nailing a few extra nails in.

So what is available and how has the market changed with regard to lender appetite?

Fully commercial

Well owner occupied, whether fully or on an opco/propco basis is almost impossible.  Lenders still deeming this as very high risk; that said I think the door is just latched, rather than locked.

Semi commercial

This is still a popular area and lenders are offering a number of products up to 75% LTV. Each lender has its own appetite regarding the commercial covenant, but the important part to check is how they will calculate the rent. As always there are a number of ways to skin the cat; For example only allowing the residential rent to raise the funds; or allowing a particular percentage split of commercial to residential.  Please make sure you have your sq footage figures ready as well as the value splits in advance of spending on valuations, just to be sure it works.

Commercial to residential conversions

This is probably the biggest area for investors, due to a number of properties falling into the Permitted Development area.  This has been further relaxed recently, providing many more opportunities. We have lenders that will lend against the property with a commercial usage, ie. even without full planning coming through.  Each council has its own way and timescale for looking at these properties so I would always suggest having a chat with them to see how they will treat it. Having something in writing from them can really help with the lender’s application too as it can mean the difference between completing before planning or PD is approved.

Investors are such a savvy, thick skinned breed. We have weathered so much over the decades, that having a creative approach to offer options on a given property will always keep us ahead of the economical fallout.  Your strategy may need to change but there will always be opportunities out there!

Diversifying your portfolio: Serviced accommodation

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Hello everyone, in what seems a very wet week for most.

I am, however, writing this from an apartment in Belaggio, Lake Como.  I have realised that you really can work anywhere and at a time when we have been so isolated, a new set of walls is as good a break as any at the moment.

The changes due to COVID have made us realise just how easy it is to have a working break.

Holiday lets are now back on the product lists for a lot of lenders – rightly so, as they are really in demand.  Staycations are seeing quite a surge in bookings, even going beyond the usual end dates of school holidays.  It makes sense as we currently have 155 countries on the quarantine list, so holidaying abroad is not always an option.  This is not going to change any time soon with a combination of a significant increase in price for foreign holidays for next year, cautious holiday makers and a new love from many of UK holiday destinations.  Many people (Ellie included!) have had a lovely holiday in the UK this year and are far more likely to do the same next year.

What we can offer

Lenders are far more keen on holiday lets rather than serviced accommodation; the difference being that a holiday let is somewhere you would stay for a long weekend or a week, rather than something that would be used for a single night’s stay.  City centre apartments are more tricky to place so think about your location and the types of tenant you will attract.

Ideally the mortgage would fit based on the 12 month AST figure.  This does give us more flexibility with lending, and in these uncertain times does give the lender, and you as the borrower,  more options.  If it doesn’t fit on the single AST figure, then we would need to see to see a track record of this or another similar property.

In terms of experience, we do require you to have another buy to let in the background, or if it’s a refinance then you need to have owned it for 12 months.

You can use any platform to advertise your property, Air BnB did have a bit of a bad reputation but this seems to be over now, it is far more important to look at the type of client you will attract.

As always, please give us a call if you want to chat through any enquiries you have.  Have a good weekend and enjoy the sunshine!

Case study: The importance of the ‘route of least resistance’

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Happy Friday everyone – by the time you get this I will be on my way to Pontechianale for a well earned break…

This week is a case study on the importance of the ‘route of least resistance’

The case involved a commercial property in London, with planning to change to 3 flats and keep the commercial on the ground floor.  The client is an experienced investor with a mixed portfolio as well as having carried out many refurbishments.  They wanted to borrow 70% LTV for the purchase.  The valuation was ordered within a few days… we had a 5 week completion time and it all seemed on track and straightforward.

We complete on plenty of refurbishment loans, and clients often are looking at the lowest cost option, forgetting that actually what they want is a quick, pain free completion and that they are confident will complete on time. The lender we chose are not expensive by any means and they have very reasonable legal and valuation costs, but they may not be the cheapest headline rate.

It was also important that we had a clear exit in place as lending against commercial at the moment can be tricky.

Everything started out very positive and felt like it would be a fairly painless completion.  Then the first curve ball flew in… there was a £200k down value, albeit the GDV was bang on. The vendor wouldn’t budge on the price and so discussion time was required to decide what to do.  The clock is still ticking. As the GDV came in as initially expected, they decide to proceed.

While this was going on, as happens on cases with a short completion date, we were getting all the due diligence and documents signed off by the lender.

Then we received a call from the client to say that the family has now got involved and offered money so the funding is not required at all.  We hadn’t asked for an up front fee, so you win some and lose some. He’s a good client of ours, so we know he is happy with our service and we moved on to other cases.

I then got a call a week later to say there was some confusion on the family help and £200k net is still required for completion in 2 weeks.

This is when clear communication was required. Due to family funding, the shareholders increased from 2 to 7, which included funds from 6 different accounts, including 3 offshore companies, which increases the due diligence. You think COVID is a moving glacier, cases can be a bit like that too!

The important thing to work towards is The Route of Least Resistance… always focus on the prize. This is particularly important on a case that has exchanged and requires a speedy completion and includes many stakeholders.

The Directors were a dream to work with, but the client’s solicitor gave us many challenges.  I have learned over the years that the name and prestige of a law firm does not necessarily give you the right solicitor.  It is always about the person actually handing the case that matters.

The lender, Lendwell, were amazing, as always.  They are sensible and don’t invite dramas of any sort. Full communication with their lawyer, Melissa at Lightfoots, also made a huge difference.

Completion was 10th August, all on time.  The client can now get on with the refurbishment and we will be ready to look at the refinance for them once it’s completed.

Baya offers the steady hand on the rudder at all times.  However tricky something may seem, keeping your eye on the prize is what gets it over the line.  Thanks everyone involved.

 

The benefits of a broker who wants to build a relationship with their clients

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Good morning all, I hope you’ve had a good week.  This week I’m going to talk about the benefits of a broker who wants to build a relationship with their clients.  We differentiate ourselves by doing things a bit differently to most mortgage brokers, and this is how.

We are not a headline broker!

I have always said to our clients that we never try and lull them in with amazing but unachievable rates.  We want you to come back again and again, so doing the right thing is key.  When we quote a client on day one, we will do all we can to ensure that we deliver on that quote.  Things can change, and obviously the valuation can change things but in the majority of cases this is what we complete on.

The rate is also not the most important factor in choosing a lender and a broker.  We are conscious of the route of least resistance, that trying to fit a square peg in a round hole is extremely time consuming and probably won’t end well!  We have worked with our lenders for long enough to know that sometimes even when they say they offer something it generally doesn’t happen.  For example; we have a lender who says they lend to ex-pats, but in reality they make it so tricky its just not worth it.

We don’t like to over commit and under deliver.  We run our business on returning clients and recommendations and want you to love the service we provide.  We will spend time talking through deals and we have plenty of experience handling unusual cases; so whatever curve balls are thrown our way we can usually deal with them!  You will benefit from the relationships we have with our lenders, and their trust in us.  Recently we have managed to complete on a few cases without the exact information the lender required, challenged where we can to achieve something that others just wouldn’t be able to – or take the time to do.

We are transparent with you – if anything changes, we will let you know straight away

This is really important at the moment, as lenders are changing criteria like the wind.  There has been a number of examples recently where we have changed lenders after we have submitted a case as things have changed.  We want you to have all the options available to you, and we don’t want you to be disadvantaged due to COVID, or anything else which is outside of your control.  This gain can be time consuming but we will always put in that time to ensure you have the outcome you need.

We will not step off the accelerator until solicitors have completed

There are some brokers out there that will get to formal offer and stop chasing.  They just don’t have the time or resources to be able to keep speaking to solicitors; trust us, it can be very time consuming. But Baya will chase to the end and we know that this can be the most frustrating part of the transaction, so we are there ready to fight on your behalf!  We know that time is money, and delays on your purchase or refinance can have cost consequences.

Baya financial is a safe pair of hands.

Enjoy your weekend.