Specialist inancial Focus issue 11 spring 2018 www.SpecialistHub.co.uk inside – The biggest danger to our industry? ® Specialist Financial Services the original & best specialist finance broker in this issue In the Spotlight We look at some of the most popular Challenger Banks in the industry Specialist Mortgage Show More than just a roadshow...and it’s free! He’s back and still grumpy! Read The Loan Ranger’s latest blog
Second Charges without the packager fees? Now that’s something to celebrate! In response to the needs of Regulated Mortgage Brokers who are unhappy with the massive fees being charged by some packagers, the Loan Processing Centre launched a whole-of-market second charge offering, with no packaging or broker fees whatsoever charged to the customer. • Whole of market offering – LPC deals directly with 19 second charge providers; • Quotations provided by our LoanQuote™ second charge sourcing system, designed and updated by people who know second charges inside out; • We do not contact your customer – you provide the advice and retain full control; • Your customer only pays for the property valuation, mortgage references, second charge consent and legal searches in Scotland/Northern Ireland; • Average of 23 years experience in our second charge department; • No Mortgage Club deductions made from your income; • Your income is paid to you directly on the day of completion. Our process will always be cheaper for your customer and allows you to not only control the application from start to finish, but also control your income. Want to know more? call 0800 810 1777 Why is LPC so much better for both you and your client? This is how LPC compares to the competition for a customer with a property worth £300,000, an interest only mortgage of £120,000 on a tracker rate of 1.49%, income of £41,000 p.a. and no credit issues. Wants a variable rate loan of £40,000 over 20 years for home improvements. Packager 1 best product - Monthly repayment of £262.94, annual rate of 3.65% and an APRC of 5.2%. Packager fee of £3,995 and a lender completion fee of £350. You earn £1,439. Packager 2 best product - Monthly repayment of £264.71, annual rate of 3.65% and an APRC of 5.2%. Packager fee of £4,000 and a lender completion fee of £495. Sourcing system only gives one packager option. You earn £1,600. LPC – best product option 1 - Monthly repayment of £248.86, annual rate of 3.65% and an APRC of 4.4%. No packager fee charged and a lender completion fee of £350. You can charge a fee of up to £4,000, but you decide to charge the client £1,600 on completion, earning the same as you would with Packager 2 and £161 more than you would with Packager 1. LPC – best product option 2 - Monthly repayment of £242.37, annual rate of 3.65% and an APRC of 4.1%. No packager fee charged and a lender completion fee of £350. You can charge a fee of up to £4,000, but decide to only charge the client £495 on completion. Lower fees and repayments, more control, happier customers, more repeat business. All telephone calls are recorded for training and compliance purposes. The Loan Processing Centre is a trading style of Specialist Financial Services Limited, Company Registration Number 5271214 in England. Registered office 119 The Hub, 300 Kensal Road, London W10 5BE. Specialist Financial Services Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 676853. The Loan Processing Centre logo is a registered trademark of Specialist Financial Services Limited. Reproduction of this website in whole or in part without permission is prohibited. The Loan Processing Centre, Audley House, Northbridge Road, Berkhamsted, Hertfordshire, HP4 1EH. The Loan Processing Centre © 2018. All rights reserved. All quotes obtained online in January 2018.
welcome... Welcome to the latest edition of Specialist Financial Focus. By the time you are reading this, Christmas will be a distant memory and you will no doubt be aware 2018 will present a number of challenges for all of us. The one currently on everyone’s lips, since the F.C.A’s Senior Management Scheme was moved back to 2019, is GDPR. General Data Protection Regulation or GDPR will come into force on 25th May 2018 and will affect every one of us. Still almost everyone I speak to does not have a clue what is to be expected of them. Even the ‘experts’ have vastly different opinions on what needs to be done – just check any GDPR discussion board on LinkedIn. One of the things we know will change is how we advise our customers on what we will use their data for. At present we email our Terms of Business to a customer at the outset of a transaction, that includes about a page of Data Protection wording. We also read a script to the borrower(s) over the telephone, recording the phone call for future reference. One of the rule changes will mean we will remove the information from our Terms of Business, as the information relating to how we use their data must be in a separate document. Sounds daft, but the EU do not want us ‘hiding’ this information within another document. That is despite the fact 99.999% of borrowers could not care less about any of this. In the last 13 years we have read our Data Protection script to over 60,000 customers. How many do you think have said we cannot process their data for the reasons stated? One! If you rely on marketing previous customers for repeat business, you should by now be contacting your customers to ask them to opt in under the new rules. Permissions given previously under D.P.A. will run out on 25th May 2018 and you will not be able to rely on them. You will also need to obtain marketing permission from anyone you have a B2B relationship with, if they are a sole trader or partnership. It doesn’t get any easier, does it? As we learn more before GDPR day, we are happy to share this information with you. Register with us today at: www.SpecialistHub.co.uk to keep up-to-date. Managing Director, Specialist Financial Services Ltd 7 9 contents 4 Specialist Overview Learn more about our brands 7 Specialist Commercial Finance Challenger banks - a new breed 9 Specialist Bridging Finance How the tools of the trade have evolved 11 Specialist Second Charges The resurgence of second charges 13 Specialist Products Banks for all seasons 15 Specialist Residential Finance Technology in specialist mortgages 17 Specialist Bridging Finance Plans to tick all the boxes 18 Specialist Mortgage Show SFS brings you the Specialist Mortgage Show; a series of monthly roundtable events taking place throughout the UK 19 The Loan Ranger The biggest danger to our industry? The contents of this publication are for intermediary use only and should not be passed to the general public. Specialist Hub, the Loan Processing Centre, Specialist Bridging Finance, Specialist Commercial Finance, Specialist Development Finance, Specialist Homeowner Finance and Specialist Residential Finance are trading styles of Specialist Financial Services Ltd. Registered in England and Wales, company number 05309450. Registered office is 119 The Hub, 300 Kensal Road, London, W10 5BE. Specialist Financial Services Ltd is authorised and regulated by the Financial Conduct Authority, FRN 676853. www.SpecialistHub.co.uk 3 13 15
Specialist Overview TM Specialist Development Finance the development loan specialist 0800 810 1333 development@specialisthub.co.uk Development Loans from a wide range of lenders The development finance market has made great strides in recent years, after being all but wiped out during the credit crunch and is back with vengeance. Specialist Development Finance offer products from a panel of 24 lenders that cater for all scenarios. From High Street products and fantastic rates for experienced developers, to lenders that will assist with joint ventures for those less experienced. Recently, some lenders have looked at other opportunities within development finance, or the ‘before and after’ as we like to call it. ® Specialist Commercial Finance the commercial mortgage & loan specialist 0800 810 1444 commercial@specialisthub.co.uk Commercial and Mixed Use property funding With the resurgence of commercial mortgage lending over the last five years, Specialist Commercial Finance has grown to become a major force in the world of packaging and broking. With a panel of 25 lenders, from the best rates available on the High Street, through to the Challenger Banks and onto those lenders that assist clients with credit problems or unusual property, we are experts in turning both easy and difficult enquiries into fast completions. We have been a key supporter and Gold Key Partner of InterBay Commercial since their relaunch in 2012, and in 2016 we were the biggest introducer of business to Hampshire Trust Bank’s new commercial offering. TM Specialist Bridging Finance the short term finance specialist 0800 810 1333 bridging@specialisthub.co.uk Regulated and Unregulated bridging loans Bridging Lenders are everywhere these days and it often feels like a new lender is launching every week. With so many bridging loans falling under FCA regulation, it is vital that you partner with a specialist that can ensure your client receives the right deal for their needs and circumstances. With our in-depth knowledge of the bridging market which stretches over three decades, Specialist Bridging Finance has a closed panel of 28 lenders that covers all scenarios. Our lending panel is carefully chosen to ensure they do not have issues with funding and also have the capacity to provide what all bridging lenders must offer - speed. 4 info@SpecialistHub.co.uk We are also a premier provider and packager of Regulated Bridging Loans and are happy to provide the advice to your customer, if you do not feel comfortable in doing so. Our BridgeQuote™ sourcing software allows us to quickly identify the best product available in the marketplace. For experienced brokers happy to provide the advice to the customer, we offer a fully packaged service that allows you to retain full control of the client and if the case has been introduced to you by another broker, guarantees the significance of your relationship. In all cases, whether packaged or referred to us, we pay all income you are due on the day of completion - guaranteed. The business volumes we complete enable us to be at the front of the queue for new product launches and exclusives. We have developed our unique CommercialQuote™ sourcing software, that allows us to issue a 100% accurate Decision in Principle to you within 60 seconds. For experienced commercial brokers, we offer a fully packaged service that allows you to retain full control of the client and if the case has been introduced to you by another broker, guarantees the importance of your relationship. In all cases, whether packaged or referred to us, we pay all income you are due on the day of completion - guaranteed. We have Pre-Planning products that can be used to purchase potential development products that require planning permission, and Development Exit products for projects that have reached practical completion and where existing development finance is coming to the end of its term. The Development Exit product also allows the customer to capital raise on the finished projects to go towards their next development, whilst allowing time to sell the individual units. In all cases, whether packaged or referred to us, we pay all income you are due on the day of completion - guaranteed.
Specialist Overview TM r Specialist Residential Finance the residential finance specialist With residential buy-to-let landlords taking a hammering from increased stamp duty costs, gradually increasing tax bills over the coming years due to changes in what can be offset against tax, and more stringent affordability criteria, there has never been a better time to partner with a buy-to-let specialist. We can offer you products that do not appear on sourcing systems, whether it is for the first time landlord client or the professional property investor with a large property portfolio. Our unique CommercialQuote™ sourcing software can provide an accurate Decision in Principle to you within 60 seconds and h TM Specialist Homeowner Finance the second charge loan specialist 0800 810 1888 secured@specialisthub.co.uk Second Charges where we give the advice If you are looking for an experienced company that offers second charge loans but do not want to give the advice yourself, SHF is the company to contact. Using a panel of 20 lenders, we will ensure your customer receives the best deal possible for their circumstances and will treat them fairly at all times. Interest rates on second charges are the lowest we have ever had and the number of products available is now back to pre 2009 levels. Competition within the market between lenders is intense, with frequent reductions in interest rates and improving lending criteria. Our LoanQuote™ sourcing software allows us to keep right up-to-date with any changes when they happen, not when a sourcing system IT employee gets around to it. We pay fantastic commission to our introducers on the day the loan completes and over 98% of our introducers class our service as “excellent” or “very good”. We are still working on the other 1.8% who only classed us as good. We recognise the client is your customer, not ours! And we also recognise that you are our customer and you have the choice to place your business wherever you choose. That’s why we work incredibly hard to ensure you are happy with our overall business proposition and the outcome for both you and your customer. 0800 810 1777 lpc@specialisthub.co.uk Second Charges where you give the advice For many professional mortgage advisers, second charge loans are still not being considered as an option, even though the Mortgage Credit Directive states they should be if you want to call yourself independent. Advisers care for their clients and rely on repeat business and recommendations. Our research showed advisers were unhappy with the massive fees being charged by packagers for doing very little and the lack of transparency regarding total earnings from an application. Also, they did not feel comfortable with their client being contacted directly or had confidence in the advice being given, often by unqualified advisers. At LPC, we offer a different way. We offer products from all 20 major lenders and in response to the lack of decent sourcing system for second charge loans, we have developed our LoanQuote™ sourcing software. Quoting from almost three thousand different second charge products, including owner occupied, BTL, consumer BTL, HMO, semi commercial and commercial second charge loans, we can provide a fully compliant sourcing solution for you. But best of all, we offer all of this without charging any packager or broker fees. You retain full control of the application, your earnings and provide the advice. At LPC we will not contact your client, but will provide you with all the tools you need to complete loans quickly, compliantly and most importantly, give your client the best second charge deal available for their circumstances. www.SpecialistHub.co.uk 5 help you to quote with lenders that do not use credit scoring, unusual properties or situations, credit issues, gifted deposits and much more. We can also help with applications from ex-pats, foreign nationals, Limited Companies and Offshore Companies. Our expertise can also help you to complete more applications for both small and large HMO’s. In all cases, whether packaged or referred to us, we pay all income you are due on the day of completion - guaranteed. 0800 810 1555 residential@specialisthub.co.uk Specialist Buy-to-Let and HMO products
Unique customers. Unique projects. A unique bank. No two property fi nance deals are the same. That’s why, at Cambridge & Counties Bank, we utilise our unique manual underwriting process allowing bespoke cases to receive high quality property fi nance. To fi nd out more about property fi nance from Cambridge & Counties Bank, give us a call or send an email. Call 0800 830 3053 Email ccb@specialisthub.co.uk Property Finance • Asset Finance • Savings
Specialist Commercial Finance Challenger Banks - a new breed CASE STUDY Need: Refinance of four properties, with an existing mortgage rate of 8.99% p.a. and a remaining term of just two months. Issue: The applicants had experienced recent credit problems and their four properties were used as emergency housing for local councils. Very few lenders will accept properties let on this basis. One of the highlights of what has emerged in the market over the last decade is the emergence of Challenger Banks. Properly capitalised, focused and with no legacy issues like those that went before them, these lenders have brought a breath of fresh air to financial services. However, it was disappointing that many of these new banks all aimed their products at the same market: experienced individuals with a relatively clean credit record and good quality tenants on investment property applications. It was therefore very refreshing when Challenger Banks such as Cambridge & Counties approached the market from a different perspective; looking to offer products that would service sectors of the population who found it difficult to borrow. Circumstances such as investment property with local authority or emergency housing tenants; an absolute red flag to most lenders but warmly accepted by Cambridge & Counties and now several others. They also have a more relaxed attitude to customers credit history, where it isn’t a deal breaker if a customer made a late payment on a credit card three months ago, as it will be with several of the market leading lenders. What is exciting is that 2018 will see more lenders enter into this sector of the market and Specialist Commercial Finance will be at the forefront of offering many of these products. Solution: We arranged a £1.95m remortgage with Cambridge & Counties Bank at a rate of 6.25% over a 20 year term. The applicant’s very successful business was enhanced even further by lower monthly repayments over the term. The result: The very happy customer was able to repay the existing high interest mortgage before expiry of the advance, which would have incurred substantial penalty fees. They also raised extra funds to improve one of their properties. Feedback: The customer gave us five stars and said: “Thank you so much for all of your professionalism and hard work.” Spotlight on Cambridge & Counties Bank Cambridge & Counties Bank is a unique partnership between two established and respected institutions – Trinity Hall and Cambridge & Cambridgeshire Local Government Pension Fund. They specialise in helping customers with their saving and lending needs. At Cambridge & Counties Bank they have created a service that brings back some of the great elements of a traditional bank, combining these with all the speed, efficiency and know-how that’s needed in the modern day. Cambridge & Counties Bank offer a personal service that’s straight-forward, fast and flexible. Since launching the bank in June 2012, they have successfully grown their lending book to an excess of £650m and are proud of their 99% customer satisfaction rate. What our Introducer said... “Fantastic. Difficult case but found a solution and had a lot of patience.” Issac K., Broker What the customer said... “My experience was excellent. It was a pleasure liaising with SHF, they were very helpful and understanding.” Mrs G. www.SpecialistHub.co.uk 7
our book stays open IN A CHANGING WORLD UNITED TRUST BANK REMAIN APPROACHABLE, ADAPTABLE AND DEPENDABLE PARTNERS. we understand specialist banking ASSET FINANCE | BRIDGING FINANCE | DEVELOPMENT FINANCE | SPECIALISED MORTGAGES | STRUCTURED FINANCE 0800 830 3046 | utb@specialisthub.co.uk
Specialist Bridging Finance The bridging market has made massive strides over the last decade. Although it was often seen as the product of last resort before the financial crash, for those of us that traded through the last recession it was a life-saver business wise when there were few opportunities within commercial and residential term finance. Short-term finance, as we prefer to call it, has now become a mainstream product and an invaluable tool for brokers. Competition has increased massively with new lender entrants appearing almost every week and this has driven down interest rates and improved terms for borrowers. We now have a mature short-term finance market with a multitude of choice for both borrowers and brokers, but for many brokers an archaic method of sourcing products. Short-Term Finance Sourcing With so many varied products now available, how can a broker ensure a client receives the best product for their unique set of circumstances? How do you ensure you do not fall into the trap of approaching a lender purely based on your relationship with them and nothing else? Manually underwriting a case with many different lenders can be a massively time-consuming task when calculating rolled up interest and contradicts one of the main selling points of short-term finance – speed. We have seen a couple of the sourcing systems try to crack short-term finance sourcing, but have not been impressed with anything seen to date. With this in mind, at Specialist Bridging Finance we developed BridgeQuote™; an easy to use sourcing system that enables us to compare a large number of lenders within 30 seconds, email a compliant Decision in Principle pdf document to our introducer / client detailing all costs and fees, and allows us to retain the evidence of product availability at that moment in time for future reference. It has taken hours off the processing times on some cases and enables us to quickly deal with the ‘tyre-kickers’ and concentrate on the ‘buyers’. Obviously, the ‘rates from’ scenario that some lenders have makes things slightly difficult at times, but the sourcing system caters for this. Surveys Another area where we are seeing an improvement is within survey reports. As any broker within short-term finance will tell you, the dreaded RICS report is one of the most frustrating aspects of our job. The many reasons for this are for another discussion, but thankfully some lenders are now addressing this issue with technology. With the massive amounts of property related data now available to lenders, the likes of Hometrack and Rightmove Automated Valuation Models (AVM’s) are becoming increasingly popular with some lenders for residential property. For a cost of £20-£30 regardless of property value, it takes seconds for an AVM to provide a solution that would take days or even weeks when instructing a surveyor. This is something we all hope more lenders will incorporate into their business models soon, for low LTV cases on standard residential property. After all, speed is essential for short-term finance. Spotlight on United Trust Bank United Trust Bank is an award winning and customer focused specialist bank with dedicated divisions providing mortgages, bridging finance, development finance, structured finance, asset finance and professional loans. Their in-depth knowledge combined with commercial awareness, makes them the lender of choice for individuals, SMEs, finance brokers and developers seeking a high quality, bespoke service. Establishing strong relationships with their broker partners is fundamental to the continued success of their business. They understand the important role brokers play in providing advice to their clients and they strive to add value by providing outstanding service and building relationships for the long term. What our Introducer said... “This is my first case I have used Specialist Finance for and I’m happy to say you will be my first port of call for any future deals that apply to your company. A massive thank you to all the team.” What the customer said... “Overall extremely pleased - I felt very confident with the knowledge of the staff.” Mrs B. Lawrence B., Broker www.SpecialistHub.co.uk 9
GROWING WITH SPECIALIST LENDING Since our foundation over 10 years ago, West One has grown rapidly into a leading provider of bridging finance. That growth continues as we expand into new areas of specialist lending. In bridging, we’re famous for flexible, pragmatic underwriting that gets deals done when others can’t, in as little as 3 days. Now, our new second charge mortgage proposition combines that flexibility with deep understanding of the market, to build a product range that meets the needs of underserved clients better. These are now being made available to you and your clients, initially through selected second charge advice firms including the team at Specialist Financial Services. To find out more about what’s new at West One, speak to the team at Specialist Financial Services on the contact details below. 0800 830 3054 westoneloans@specialisthub.co.uk West One Loan Ltd is authorised and regulated by the Financial Conduct Authority. Firm Reference Number: 510024. Certain types of loans are not regulated, for example loans for business purposes or certain buy-to-lets West One Loan Ltd is registered with the Information Commissioners Office. Registration Number: Z2651210.West One Loan Ltd is registered in England and Wales. Company Number: 05385677. West One Capital is an unregulated subsidiary of West One Loan Ltd, and is registered as a limited company in England and Wales. Company Number: 08880521.Registered Office Address: 3rd Floor, Premiere House, Elstree Way, Borehamwood, Hertfordshire. WD6 1JH. BRIDGING FINANCE SECOND CHARGE MORTGAGES
Specialist Second Charges The resurgence of second charges There was a time, just before the financial crash when second charge lending (or as they are known by the other name, secured loans), was a £6 billion a year industry with more than 500 brokers active in the market. Fast forward to 2009, that number of brokers had reduced to less than 30 and the number of lenders went down from almost 30 to two. After the recession had done its worst we begin to see the green shoots of recovery, with lenders returning to this much-needed market. After all, what was your client going to do when they needed to borrow money but their existing mortgage was on a rate of under 1% over base rate? The number of what we would call proper second charge lenders has now increased to 20, with three of these owned by individuals that originally started their career as a broker. Lenders such as these bring an invaluable insight to the market, as they are able to look at applications from a broker perspective. The market hasn’t yet returned to the heady days of £6 billion of lending per year, but with the lowest interest rates we have ever seen in the industry still available, rapidly improving criteria that CASE STUDY Need: £130,000 to repay existing unsecured credit and other bills. Issue: The applicants’ had only purchased their house two months previously and had ported their mortgage over from their previous property. An income multiple of over 7.8 x income was needed to meet the clients’ requirements and the loan term took the client over the age of 75. Solution: An advance with West One Loans to 78% of the property value. Result: The client was able to repay all existing credit, reducing his monthly outgoings from £3,337 to £1,009 - a saving of £2,328 per month. is almost always more flexible than a first charge and steadily increasing awareness amongst the general public, the market will continue to grow and will attract new lenders. At Specialist Financial Services, we offer two options to access the market: advised or non-advised. Either we give the advice or you do, if you have the correct Spotlight on West One Loans West One Loans is one of the largest bridging finance lenders in the UK, with a loan book of around £450m and lending in excess of £50m every month. Since their foundation in 2007, they have grown rapidly into a leading provider, lending over £2.5bn of short-term finance, to date. Through their West One Bridging Index, first published in 2011, they are a recognised voice in the bridging world and are founder members of the ASTL, FIBA and are Patrons of the NACFB. In 2017, they launched longer-term lending of second charge mortgages for both residential and Buy-toLet properties and will further broaden their specialist lending proposition in 2018 with the launch of development finance. Since 2014, they have been part of the Enra Group, who were ranked 35th in the Sunday Times Fast Track 100 fastest-growing companies in December 2017, the 4th successive year the group has appeared in the rankings. What our Introducer said... “Amazing as ever. You agreed you could do the case and provided an offer on the agreed terms. Simple idea but many fail to do this!” Ashley L-R., Broker www.SpecialistHub.co.uk 11 What the customer said... “It was a pleasure working with SHF; a crystal clear smooth and efficient process. Highly recommended.” Mr P. Feedback: Customers gave us five stars and said: “Your service was fantastic. Thank you.” permissions with the F.C.A. Income can be substantial and we have introducers earning in excess of £50,000 a year for passing a customer’s details to us.
A mortgage where different is a good thing A more individual approach to lending The world would be a boring place if everyone was the same. Unfortunately, to get a mortgage, other bank lenders expect your clients to fit a standard list of specifications. So we’ve created a more flexible decision process for people who don’t belong in a wrapper. The property used as security for the loan may be repossessed if repayments are not kept up on a mortgage or other loan secured against it. For intermediary use only masthaven.co.uk/lending/mortgages 0800 830 3042 masthaven@specialisthub.co.uk Masthaven Bank Limited is a company registered in England & Wales with registration number 09660012 and whose registered office is at: 11 Soho Street, London W1D 3AD. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Firm reference number 719354). The “Masthaven” name and logos and all other brands, names, logos, marks and slogans on this document are the trademarks or service marks of us or our licensors.
Specialist Products Banks for all seasons As the market continues to improve and grow in the UK, with more and more Lenders entering into commercial, bridging, development and second charges, those that have been around a while are spreading their wings. We are beginning to see lenders such as Masthaven Bank and several others launch products into areas that are outside their traditional product offering. Lenders that have seen their initial growth from the likes of bridging and development finance, which requires a mindset of a fast turnaround and rapid response, have brought that same level of service to second charge lending, first charges and commercial mortgages. Together with the focus on speed of service has come an attitude of not following the herd. Masthaven’s first and second charge products are prime examples, where for example they do not use credit scoring to assess applications but often still achieve our ‘Best Buy’ product recommendation from our LoanQuote™ sourcing software. This is great news for us brokers, as it has usually been the case in the past of a long-term lender launching a short term product such as bridging, but not understanding the main concept of the product which is speed of service. CASE STUDY Need: Client was looking to purchase a flat for £230K, with a mortgage of £184K. Issue: Client is 64 with an unexpired lease of only 64 years. He was using his second job as income and using earned income to the age of 80. Solution: We carried out extensive lender research and the case was referred to the lender and accepted. The result: The offer was issued within 48 hours of receiving all of the relevant documentation. Feedback: Client was really happy as he was concerned that they would lose the property. He gave us five stars and said: “Thank you for all of your hard work. Excellent service.” Spotlight on Masthaven Masthaven received their banking license in 2016 but they’re not new. Far from it. They’ve got a track record in finance and providing class-leading short term bridging options, alongside offering secured lending since 2004. As a newly formed bank, Masthaven is committed to providing flexible and fixed term savings accounts, bridging loans, development finance and second charge mortgages that will disrupt the norm. They use technology to enhance processes but everything they do is underpinned by a flexible human approach, because they know people make much better decisions than a computer can. What our Introducer said... “Great, thank you.” Philip S-C., Broker What the customer said... “Extremely helpful and professional throughout the process.” Mr & Mrs M. www.SpecialistHub.co.uk 13
We’ve got you on speed dial. Getting you finance isn’t the only thing we’re quick to do. We like to keep our brokers informed every step of the way, so your client doesn’t walk. Call us on 0800 830 3055 or email lendinvest@specialisthub.co.uk. 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. Spotlight on LendInvest LendInvest was founded with one mission: to make mortgages better. Now the UK’s leading property finance marketplace, they provide specialist finance to professional property developers and investors, and offer multiple investment opportunities for individuals and institutions looking to invest in real estate backed loans. Whether it’s making it easier to get a loan, providing crucial funding to underserved borrowers, or creating an enhanced service for our intermediary partners, LendInvest combine deep industry knowledge with technological innovation to make it happen. Since 2008, they have lent over £1.2 billion to their borrowers who have bought, built and renovated almost 4,000 properties worth in excess of £1.7 billion in 120 UK towns and cities. What our Introducer said... “Dealt with this lead with no hassle and no fuss as usual, thank you.” Kevin S., Broker 14 info@SpecialistHub.co.uk What the customer said... “Outstanding and a pleasure to do business with.” Mr & Mrs G.
Specialist Commercial Finance Technology in specialist mortgages Over the last couple of years, the financial press has been full of how the mortgage industry will be transformed by technology. As you would expect, much of what has been reported has either been misinformed or total nonsense. Phrases such as ‘robo-advice’ are thrown around as being the beginning of the end for mortgage advisers. Although there will no doubt come a time when prime lenders will be able to offer a seamless ‘Amazon’ type of experience for plain vanilla mortgages, does anyone expect that in the near future a system will be able to provide advice on specialist mortgage products from numerous lenders, with no human interaction? What is refreshing is a few of the smaller lenders are now adopting an automated way of working with customers, minimising paperwork to the extent where the only wet signature required during the entire process will be on the legal charge. LendInvest is a prime example of this. LendInvest is a new breed of specialist buy-to-let lenders and Specialist Commercial Finance was delighted to be appointed to their packager panel in 2017. Being an established lender in the bridging market, they understand the importance to brokers and customers of quick decisions and rapid finance offers. Their process is therefore simple and works tremendously well. Once we have completed a Decision in Principle on their on-line platform, the customer is emailed a fully completed application form and direct debit mandate. Both documents can be electronically signed and returned within seconds and the property survey is instructed shortly afterwards. Any personal documents needed for the decision process can be easily uploaded onto their platform. Once the application reaches formal offer stage, this is once again emailed to the borrower for an electronic signature and solicitors are instructed. Fast, almost completely paperless and hopefully a system that will be replicated by other lenders in the specialist market. With superb interest rates and rental cover calculations from just 115%, call us free on 0800 810 1444 to see if your next enquiry qualifies for these fantastic new products. CASE STUDY Need: Clients wanted to raise £398,000 against a buy-to-let and a HMO property they owned. The loan purpose was to consolidate £100,000 of unsecured credit and to replace their existing mortgages. Issue: The clients had tried several high street lenders but had been refused due to the purpose of the advance being used to consolidate the unsecured debt. Solution: We discussed the case with LendInvest who were happy to offer the advance in full to clear the existing charges and for the additional £100,000. Terms were agreed with LendInvest at 3.39%. The result: By refinancing with LendInvest the clients reduced the rate of interest they were paying by 1.25%. The clients were able to clear all their unsecured debt, this then reduced their monthly outgoings giving them more disposable income each month. Feedback: Clients gave us five stars and said: “We have been impressed with the service and how efficient the process was.” www.SpecialistHub.co.uk 15
Property funding solutions for SMEs We take a pragmatic, holistic and personal approach to underwriting with straightforward processes. We deliver specialist products for: Commercial Semi-Commercial Buy-to-let HMO Developer Exit Refurb Refurb-to-term Bridging Specialist Commercial Finance is a Top Tier Master Broker of Hampshire Trust Bank Commercial Mortgages. t: 0800 830 3041 e: htb@specialisthub.co.uk ASSET FINANCE PROPERTY FINANCE COMMERCIAL MORTGAGES PERSONAL SAVINGS BUSINESS SAVINGS FOR INTERMEDIARY USE ONLY. Hampshire Trust Bank Plc is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority. Our FRN number is 204601. We are a company registered in England and Wales, registration number 01311315. Registered office: 55 Bishopsgate, London EC2N 3AS. Hampshire Trust Bank, HTB and are registered trademarks of Hampshire Trust Bank Plc.
Specialist Bridging Finance Products to tick all the boxes Purchase Apply for Planning Development Finance Developer Exit Sale of Properties We spend a great deal of time speaking to brokers and introducers from all over the country at our roadshows. They are a tremendous success because of the knowledge attendees can gain. One of the most important areas of knowledge we can pass on is the opportunities that have arisen with lenders over the last few years, mainly because of innovative product launches. Hampshire Trust Bank is a great example, as they were one of the first lenders to launch more descriptive product ranges into the short term finance market. When we speak to our fellow professionals, it is often surprising they are not aware of products such as Developer Exit and Pre-Planning Bridging Loans. A Pre-Planning Product allows a customer to purchase a property prior to obtaining planning permission and then use the increased value with planning to secure development finance. Developer Exit products allow a customer to repay what can often be expensive development finance when the project is at practical completion and raise further funds for their next project. The next time an enquiry lands on your desk and you need specialist help, call Specialist Bridging Finance free on 0800 810 1333. CASE STUDY Need: Limited company developer client looking to raise capital on a completed development, to enable them to repay existing development finance and purchase their next development project. Issue: The existing and expensive development finance had under 2 months left on the term, so speed was vital. Also, one of the directors had experienced credit issues in the past and had previously been a director/ shareholder of a failed property developer. Solution: We overcame the credit issues by making a very strong case that would make it difficult for any lender to refuse. We arranged a Developer Exit product on the completed development and a pre-planning bridge on the property being purchased. The rate was much lower than the existing development finance. The result: Our clients were able to complete the purchase of their next project, within the timescales set by the vendor and before the property was offered to the wider market. Feedback: Their MD said: “This is an invaluable product for serious property developers and allowed us to begin the process on our next project far earlier than we would normally expect. A fantastic job, well done.” Spotlight on Hampshire Trust Bank Hampshire Trust Bank is a specialist bank, staffed by experts focused on helping UK businesses realise their ambitions. They take a pragmatic, holistic and personal approach to underwriting with straightforward processes. Their Commercial Mortgages team provides structured specialist lending with tailored solutions for SMEs, trading businesses and investors. Offering bridging and term finance secured against buy-to-let, semi-commercial and commercial property with loan amounts from £100,000 to £10m. The bank is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority. What our Introducer said... “Excellent fast service as always.” Barry D., Broker What the customer said... “SHF was excellent. Very responsive and professional.” Miss W & Mr R. www.SpecialistHub.co.uk 17
One morning which will bring you face-to-face with the biggest names in specialist lending and allow you to stay informed and compliant... much more than just a roadshow...and it’s free! Throughout 2018 Specialist Financial Services will bring you the Specialist Mortgage Show; a series of monthly roundtable events which will take place around the UK Specialist Financial Services has over 30 years in the specialist finance market, we have unique lender relationships with access to whole of market Each month seven highly knowledgeable industry speakers will be discussing a range of areas from commercial, bridging, development, first charges and second charges on buy-to-let and residential properties Find out more about these areas as well as consumer credit (CONC), credit broking permissions, debt counselling, GDPR and FCA regulation Milton Keynes 15th March 2018 Kent 14th June 2018 Brighton 13th September 2018 Receive a certificate which gives you 3 hours towards your CPD FREE to attend #SMS_2018 Slough Leeds 19th April 2018 Birmingham 19th July 2018 Elstree 18th October 2018 17th May 2018 Manchester 16th August 2018 Essex 15th November 2018 To find out more and to book or register your interest visit: roadshow.specialisthub.co.uk/focus or call 0800 810 1081 This year’s participants:
Specialist Blog The biggest danger to our industry In my blog in this edition, I want to talk about something that I see as a massive, ongoing threat to our industry. Something that is difficult to police and where the outcomes can ruin the lives of our customers. Something where there is very little chance of any comeback on the perpetrators and where they always get paid, regardless of the outcome. Regulation is evolving and becoming more difficult for those of us that have embraced F.C.A. regulation. It is expensive to be regulated by the F.C.A. and for us it is the equivalent of employing a full-time member of staff. Therefore, every penny we earn counts. I believe the biggest threat to all brokers and lenders in the mortgage market, whether it is residential first charges, second charges, bridging, commercial or development, are a number of RICS surveyors. This blog is not meant to be a dig at all surveyors, as many act with the utmost professionalism and it is the few, mainly employed by the large panel managers that I am mentioning here. It is also not a surveyors’ fault if the client over-estimates their property value or is not entirely truthful about its condition. I want to take you back 10 years to the financial crash. Arrears levels increased sharply for many lenders and in some cases, it was the surveyors Professional Indemnity Insurance that was hit. I remember some surveying firms going out of business as they could not renew their P.I. Cover, only to resurface under a slightly different name a few weeks later with a slightly different structure. I am aware, following a conversation with a drunk surveyor at an industry function some years ago, that some of the national surveying firms have instructed their valuers to reduce the survey figure by 10%-15%, to ensure any future P.I. claims are kept to a minimum. These firms are responsible for a large percentage of the surveys carried out each month in the U.K. Unfortunately, I have no proof of this, other than the word of an insider that had consumed too many G&T’s. What makes it even worse and I will use the example of a recent case we had, where the estimated value was £1m and a surveyor valued it at £600,000, is the surveyor still charged a fee as if the property was worth £1m. I cannot think of any other industry that gets away with acting in this way. Or another example where the surveyor valued the property at £600,000 and on a re-inspection six months later dropped the value to £535,000. Why? Because the market had dropped by 5%! Or the three separate surveyors who recently valued the same property, on the same basis and within a threeweek period, at £2.1m, £1.85m and £1.6m. How can three professional surveyors have a wide variance in opinion? How can lenders possibly have any faith in some of these ‘professional’ people? Or the surveyor who valued a newly refurbished property at £650,000 open market value, only for the property to exchange three weeks later for £750,000. And it’s the lender’s that are also suffering. At a time when increased market competition and decreasing margins are affecting all lenders, losing cases due to either a surveyor’s incompetence or their employer’s P.I. policy is something that must be looked at. And soon. But for me, the biggest victim is the customer. A surveying firm’s poor practices can result in bankruptcy for a client if they are trying to raise money to pay an income tax bill. It can mean a business is borrowing at very expensive unsecured interest rates, because a survey will not allow a lender to offer a cheaper secured rate. It can lead to misery that can last for many years. Subscribe to Tony’s future blogs at: www.SpecialistHub.co.uk/the-loan-ranger What our Introducer said... “The staff at SFS are very knowledgeable, helpful and a pleasure to work with.” Terry S., Broker What the customer said... “Your service was very efficient and professional.” Mr & Mrs W. www.SpecialistHub.co.uk 19
® h TM TM Specialist Commercial Finance the commercial mortgage & loan specialist Specialist Homeowner Finance the second charge loan specialist Specialist Bridging Finance the short term finance specialist Specialist Hub the home of specialist finance TM TM r Specialist Residential Finance the residential finance specialist Specialist Development Finance the development loan specialist Audley House, Northbridge Road, Berkhamsted, Hertfordshire, HP4 1EH Telephone: 0800 810 1666 or 01442 899139 Fax: 0800 810 1005 or 01442 873847 Email: info@SpecialistHub.co.uk Website: www.SpecialistHub.co.uk The contents of this publication are for intermediary use only and should not be passed to the general public. Specialist Hub, Specialist Homeowner Finance, Specialist Commercial Finance, Specialist Bridging Finance, Specialist Development Finance, Specialist Residential Finance and the Loan Processing Centre are trading styles of Specialist Financial Services Limited. Registered in England, No. 5309450. Registered office: 119 The Hub, 300 Kensal Road, London, W10 5BE. Specialist Financial Services Limited is authorised and regulated by the Financial Conduct Authority. Specialist Financial Services Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 676853. All logos are trademarks of Specialist Financial Services Limited. Any infringement of this will be vigorously pursued. © Specialist Financial Services Limited 2018. All rights reserved.
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