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June 16, 2020

Hope Capital launches new Flexible Fees feature

Hope Capital today launches a brand-new feature of its bridging loan products. The Flexible Fees product feature is aimed at borrowers who require zero lender arrangement fee, reduced valuation fee options or no upfront solicitors’ costs.

The new feature is specifically designed for borrowers who need to manage their cashflow effectively and require the highest possible amount on day one of the loan. By offering borrowers the option of zero or reduced fees, they are effectively customising the loan to best suit their needs.

The Flexible Fees feature provides a 0% option on the lender arrangement fee, options for reduced valuation fees and no upfront solicitors costs. By removing and reducing these costs, the broker can provide their client with a more flexible and affordable loan.

The zero lender arrangement fee is available solely on serviced or part-serviced loans with minimum loan terms applying. Reduced valuation fees and no upfront solicitors’ undertakings are available across both serviced and interest-retained loans upon receipt of the application.

Brokers will continue to receive their full procuration fee on completion, irrespective of which option the borrower chooses.

These new fee options are part of the Hope Capital Custom Collection which comprises six different products, features and options, all of which are designed to give the most suitable solution for the borrower. By providing brokers with a collection of products, they are able to offer their clients a loan that is truly customised to meet their needs. Full details on the Custom Collection can be found on the Hope Capital website.

Hope Capital is renowned for being a highly flexible lender and is dedicated to providing excellent service to brokers and their clients from initial enquiry through to completion.

Gary Bailey, managing director of Hope Capital, said: “The new Flexible Fees product feature forms part of the Custom Collection and gives customers the option of having more funds on day one and lower initial outgoings. This flexibility can make the difference between a loan being affordable and working for the borrower, or not.

“Right now, we’re placing a real focus on offering new innovative products which offer flexibility and affordability for the borrower.”

June 15, 2020

United Trust Bank agree to fund £7.2m redevelopment project

United Trust Bank (UTB) has agreed to fund Hawkfield Homes’ latest project providing 22 new homes in the charming Gloucestershire town of Wotton-under-edge.

It is the first time UTB has funded a Hawkfield Homes development.

Hawkfield Homes has been developing and building new homes in and around Bristol and the South-West for 12 years. Founders, Lucy Page and James Kilmartin, began developing in 2008 and have successfully completed almost 40 schemes since. They employ their own construction team and have established strong relationships with many Bristol based suppliers, consultants and property professionals. Hawkfield Homes now complete around 4-5 developments each year providing the area with much needed, high quality homes for families and first-time-buyers and regular employment for local construction workers.

As a forward-looking house builder, Hawkfield Homes selects projects and builds ‘future proof’ home designs supporting flexible lifestyles and working from home. Developments benefit from good transport connections and its homes are wired to support giga-fast broadband connectivity and provide additional appliance sockets. The larger homes are typically designed to include an office or study.

The redevelopment will see Hawkfield Homes demolish the existing buildings at Dryleaze Court and construct 10 four bedroom semi-detached and 12 two bedroom semi-detached and terraced contemporary homes. The new homes should be eligible for ‘Help to Buy’ assistance with the first units available to purchase from summer 2021.

James Kilmartin, director of Hawkfield Homes, commented: “Hawkfield Homes has grown substantially in the last ten years and we are aiming for the next 10 to be equally exciting. As such, finding dependable lending partners is an important part of our plans.

“I enjoy working with people who share my enthusiasm for building great homes and I got on well with Jonathan Nail from the start. We both appreciate straight talking and that’s especially important when things don’t go to plan. Although the Covid-19 pandemic took us all by surprise, Jonathan and the UTB team have been accessible and supportive throughout. It’s been an unusual start to a new relationship but between us we’ve been able to overcome the challenges.”

Jonathan Nail, director – Property Development, United Trust Bank commented: “Hawkfield Homes is one of the South West’s SME success stories. By building well designed schemes in sought after locations, James Kilmartin and his team have established a great reputation for providing homes people want to buy and enjoy living in.

“United Trust Bank is keen to support growing regional house builders and I’m delighted to be working with James and Hawkfield Homes as they bring much needed quality new homes to the Bristol area. Although 2020 has presented more challenges than any of us had bargained for, I’m confident that this will be the first of many successful Hawkfield Homes developments supported by UTB.”

June 15, 2020

Pluto Finance completes acquisition funding for Milton Keynes’ Station House

Pluto Finance has a completed a £9.7m bridge loan for the acquisition of Station House, Milton Keynes MK9, for a proposed new residential development.

The 12-month bridge facility will enable the acquisition of the Station House site which comprises a five-storey building, main station concourse and ticket office of Milton Keynes train station, a ground floor retail parade and four upper storeys of office space.

The property has planning permission in place to convert the existing office space into 200 residentials units, whilst retaining the ground floor station and retail space. In a prime position, once developed, Station House will be ideal for local workers as well as commuters into London, with a 30-minute journey time.

Justin Faiz, partner of Pluto Finance, comments: “We are delighted to have completed the acquisition funding for this proposed development which has so much potential being ideally located. This was a complex agreement, including the purchaser’s acquisition of a company and a number of long leases to be considered, however the loan credit was approved and funded within four weeks with the entire team coordinating from home.”

Pluto Finance has been actively lending since 2011 and is currently funding the development of over 2,000 new homes in the UK.

June 15, 2020

Avon Gold Premier store in Keynsham sold through Christie & Co

Specialist property adviser, Christie & Co, is delighted to announce the sale of the Avon Gold Premier Store in Keynsham, Somerset.

This Avon Gold Premier Store is a large and profitable convenience store with plenty of room for growth, situated in a prominent location on a shopping parade in the busy, residential area of Keynsham, between Bath and Bristol in Somerset.

The store benefits from excellent levels of passing trade and is ideally situated close to residential buildings, primary schools and a variety of local businesses all of which drive footfall to the store.

Since 1997 the business has been owned and operated by Mr Tony and Mrs Alisson Mallaban, who have decided to sell it in order to pursue retirement. Tony comments, “In the 23 years that we have owned the supermarket, it has grown into a thriving, well supported, local business offering a wide range of goods and services. The time was right for a new owner to bring fresh ideas to the business and we are looking forward to our well earned retirement. The sale was handled expertly by Jamie Williams and Dave Morris at Christie & Co and done so in a completely confidential manner which we requested from the beginning.”

The business has been purchased through Christie & Co by regional corporate Wessex Retail Limited. This is the third business that the company has acquired in the South West of England through Christie & Co so far in 2020. The new owners plan to renovate and rebrand the store, and to introduce a variety of product ranges, promotions and a larger hot food offering to help increase gross profit margins.

Retail business agent at Christie & Co, Jamie Williams, who handled the sale, comments, “The business was sold to a top regional corporate who is currently working on a refit and rebrand. Keynsham will soon be served by a high-quality retail offering in the form of a SPAR store. Avon Gold Supermarket is the third store purchased by this client in the South West this year. The retail market is continuing to remain robust and is likely to improve in the second half of 2020.”

Avon Gold Premier Store was sold for an undisclosed price.

June 15, 2020

Top 200 law firm, Seddons Solicitors, joins FIBA’s Professional Partners Panel

Specialist property finance trade body, FIBA, has appointed Seddons to its panel of professional partners to provide legal services to FIBA members’ customers.

Seddons is a top 200 law practice based in London’s West End, with a strong reputation for both commercial and private client work and has one of the most experienced teams specialising in the commercial lending sector.

According to executive chairman of FIBA, Adam Tyler, Seddons provides a service specifically tailormade for specialist finance cases.

He said, “Seddons is among the leading legal firms in the UK and I am delighted that we are able to welcome their team to the professional partners panel. They bring specific expertise in the commercial sector and I have been hugely impressed with their professionalism and the scope of the support they can offer our members.

The issues surrounding commercial specialist finance can be much more complex than traditional residential conveyancing and we have been keen to ensure that our panel reflects the need for that expertise. Seddons will be a worthy addition to our panel of legal specialists.”

Adam Miller, head of Real Estate Finance at Seddons, commented, “It is a challenging time in the commercial property and lending sectors, and more than ever it is important to work with our industry partners to ensure transactions are dealt with efficiently and that legal advice is focused and accessible. We look forward to working collaboratively with FIBA members, and sharing our expertise.”

June 11, 2020

RICS New buyers looking for outside areas and green spaces

Following the reopening of the housing market in England, on the 13 May, the May 2020 RICS Residential Market Survey unsurprisingly saw a slight improvement in the outlook for sales over the coming twelve months across the UK as a whole.

As the housing market in England started to get going, the UK headline net balance for new buyer enquiries moved from a record low of -94% in April, to post a reading of -5% in May.

In an extra question included in the May survey, as housing markets either opened or prepared to, contributors were asked for their views and for information on what is coming up when speaking to buyers, regarding potential shifts in the desirability of certain features of properties over the next two years (owing to recent events).

81% of respondents across the UK felt that there will be an increase in desire for properties with gardens or balconies; 74% predict an increase in demand towards homes located near green spaces; and 68% are of the opinion that properties with greater private and less communal space will become more desirable.

At the other end of the scale, 78% of respondents sense there will be a fall in the appeal of tower blocks and 58% feel properties located in highly urban areas will be less enticing. Interestingly, the majority expect no change in the desirability of homes located near transport hubs.

Looking at the regular indicators, newly agreed sales remained in negative territory (net balance -35%), alongside a net balance of -20% of contributors reporting new instructions falling in May. It is important to highlight that activity metrics did not see meaningful changes in Scotland, Northern Ireland and Wales, where restrictions on estate agents were not removed in May. Looking ahead, near term sales expectations turned broadly neutral in May, and twelve-month sales expectations are now slightly positive.

With regards to house prices, the survey’s headline UK price indicator moved deeper into negative territory. Indeed, the national net balance slipped to -32% compared to a reading of -22% in April, representing the weakest monthly figure going back to 2010. Going forward, near term price expectations remain downbeat, and twelve-month price expectations also remain negative, with a net balance of -16% of survey participants anticipating prices will fall over the year ahead.

In the lettings market, tenant demand was down over the month and landlord instructions continued to fall sharply, extending a trend that long predates the impact of the Covid-19 outbreak.

Simon Rubinsohn, RICS chief economist commented: “Following the reopening of the housing market in England, pre-Covid sales that were in the pipeline are now largely going through. This is encouraging but it remains to be seen how sustained this improvement will prove. Much will inevitably depend on the macro environment and, in particular, the resilience of the jobs market as the furlough scheme unwinds. For the time being respondents to the survey see the trend in transactions being broadly flat.

“Alongside this, there are already signs that those looking to buy a house are responding to the conditions created by the pandemic by seeking out properties with gardens or balconies and nearer green space. These and other similar features are likely to increasingly command a premium over higher density urban locations according to respondents to the survey.”

June 11, 2020

Hope Capital launches unique new Combi product

Hope Capital today launches a wholly unique bridging loan – the Hope Combi Loan.

This brand-new product combines the Discounted Rate Loan with the Hope Flexi product and a three-month payment holiday period.

It is suitable for customers wanting to optimise the loan amount they receive on day one and service their loan, but who need a payment holiday for a period during the loan term. In addition to the payment holiday, the borrower can have a discounted rate for the first six months.

For example, a borrower who needs funds for light refurbishment and knows it will take some time for the property to become income-generating, could benefit from discounted payments and then a payment holiday. This would help the borrower maximise cash flow with the ability to effectively manage the payments on the loan. The borrower has the choice of when to take the payment holiday at any time during the loan. Coupled with the discounted rate for the initial six months, this can help minimise the borrower’s initial payments.

The Combi Loan is part of the new Hope Capital Custom Collection which comprises six different products, features and options. By picking the options and features that best suit the client’s circumstances and needs, brokers are able to offer their clients a loan that is truly customised. Full details on the Custom Collection can be found on the Hope Capital website: https://hope-capital.co.uk/products/the-custom-collection/

Hope Capital is renowned for being a highly flexible lender and is dedicated to providing excellent service to brokers and their clients from initial enquiry through to completion.

Gary Bailey, managing director of Hope Capital, said: “Our Combi Loan is a unique offering that really does deliver on flexibility and has affordability at its heart. As part of the Custom Collection, it is yet another option for brokers to meet a client’s specific needs.

“All our new products are designed to provide innovative solutions which offer flexibility and affordability for the borrower.”

June 11, 2020

LCP Report: Is PCL set for a bounce?

London Central Portfolio (LCP) has now undertaken its own in-house analysis of the data to specifically examine what has happened in the Prime Central London market (PCL) and how it may respond following the initial after-shock of the Covid19 pandemic.

  • This analysis indicates that PCL saw a far more pronounced rally in the second half of the year than the rest of the country with a 9.8% increase in prices.

Having suffered from suppressed demand following a succession of punitive tax increases and the uncertainty created by the EU Referendum in 2016, PCL has been long overdue a reversal of fortune. By the end of 2019, prices in PCL according to most commentators were down some 25% from their peak in 2016/17. More realistic pricing and a degree of political certainty following the December General Election meant buyers began to snap up available stock particularly within the first three months of 2020. This noticeable increase in activity has become known as the ‘Boris Bounce’.

Source: ONS UK House Price Index calculated using data from HM Land Registry, Registers of Scotland and Property Services Northern Ireland.

Despite the initial and immediate impact that the onset of Covid 19 has had on buyer activity, sellers have proved reluctant to further significantly discount as a result of the pandemic.

Andrew Weir, previously head of Foxtons and now CEO of LCP, comments: “For transactions already in the pipeline when the ‘Lockdown’ came into place, sellers have in some instances accepted up to a further 5% discount. Buyers seeking to be opportunistic and negotiating more aggressively have by and large been sent packing. Sellers re-marketing these properties have quickly re-achieved their prices despite the only very recent ability to conduct physical viewings within strict guidelines. This all indicates that the buyer’s window of opportunity to acquire at bottom of the market pricing in PCL may be rapidly closing”.

Weir adds “Never try to second guess either the peak or the trough. If you think you can spot it by looking back over your shoulder, you have most likely missed the moment”

  • Although the brief surge in prices following the ‘Boris Bounce’ has hit a road block due to Covid 19, PCL’s performance at the start of 2020 shows strong similarities with the global financial crisis in 2008/2009.

Following a rapid depression in the market due to a lack of global demand, prices rallied by a staggering 26% between March 2009 and January 2010. Again, the bounce back was considerably more marked than in the rest of the country where prices increased by just 4% over the same period, as it faced domestic issues such as affordability and unemployment.

PCL, on the other hand, quickly regained its attractiveness as a safe haven asset class for many deeply entrenched reasons; the rule of law, GMT time zone, prestigious schools and universities, the global business language and a diverse and liberal culture. These factors will undoubtedly come into play again.

Source: ONS UK House Price Index calculated using data from HM Land Registry, Registers of Scotland and Property Services Northern Ireland.

  • Rock bottom transaction volumes are also likely to contribute to a price recovery post the initial Covid shock.
  • Transactions have fallen by 47% in five years from December 2014 to just 3,363 sales in the year to January 2020, the lowest on record and less than an average of 65 per week.

Source: ONS UK House Price Index calculated using data from HM Land Registry, Registers of Scotland and Property Services Northern Ireland.

This has been a function of a lack of demand due to the impact of taxes and Brexit uncertainty coupled with few distressed disposals in the market. Most owners are simply prepared to wait until circumstances are conducive to selling.

Current stock levels mean any improvement in sentiment once lockdown eases could reignite a similar upward trend in prices as pent up demand is released, as witnessed post GFC and immediately after the 2019 General Election. More buyers and limited inventory are likely to stimulate price growth.

Naomi Heaton, LCP group chairman concludes, ‘The Autumn may produce more stock for sale but accompanied by a corresponding increase in demand. We anticipate that circumstances could lead to a stronger PCL market in 2020/21 than many currently predict, just as we did in early 2009.’

Note: The UK House Price Index has been suspended until further notice from the April 2020 index (due to be released on 17 June 2020)

 

 

June 10, 2020

Urgent help needed to save housing industry

Construction sites have returned to work after the initial impact of coronavirus. But new research from the Centre for Policy Studies shows that they are simply finishing off existing projects. Cautious estimates suggest housebuilding could fall by around 38% over the next year, leading to 76,000 fewer homes being built. The impact could be far worse if the economy fails to bounce back, potentially leading to a near collapse of the sector.

This would disproportionately affect small and medium sized builders, as well as the half a million workers involved in the supply chain.

Worse, CPS analysis shows that the housing sector is uniquely vulnerable to recessions. In the wake of the 2008-9 crisis, it took six years for supply to return to previous levels. A repeat would deal a devastating blow to the government’s plan to fix the housing crisis and encourage mass home ownership.

Already, large housebuilders are preparing to batten down the hatches and ride out the storm, while many in the SME sector risk bankruptcy. Many contractors – the white van men who backed the Tories in 2019 – will lose their jobs. And the effects of this will be felt well into the 2020s.

The Centre for Policy Studies, Britain’s leading centre-right think tank, has developed an emergency plan to support the sector. ‘Help to Build’ – written by David Cameron’s former chief housing adviser – would help all developers to weather the storm, ensure continuing housing supply while saving smaller and medium sized developers from ruin and having to make hardworking employees redundant.

The scheme would allow house builders to access grants up to a maximum of £25,000 for each new-build property (capped at a percentage of the home’s value). Given property prices we expect the grants to average around £20,000 – if capped at £3 billion, as the report suggests, this would ensure the construction of around 150,000 homes next year.

In return for using this scheme to support sales, housebuilders would be required to continue building at similar levels to their existing pipeline, ensuring that housing supply (and construction employment) are maintained through the crisis and its aftermath at a relatively low price.

The incentive could be used to help potential buyers with a deposit, to support part-exchange purchases, or to convert the unit into an affordable home for either rent or sale. It would not be used to support buy-to-let or commercial projects, to ensuring it supported owner-occupiers or affordable rent. It would also have a built-in expiry date.

The CPS is urging the government to introduce Help to Build urgently to limit the likely collapse in housebuilding and ensure the swiftest possible recovery.

Alex Morton, head of policy at the Centre for Policy Studies and former special adviser to David Cameron, said:

“The UK housebuilding industry is not just economically and socially vital, but particularly vulnerable to the impact of recession. We cannot afford a repeat of the past two economic crises. This scheme will keep housebuilding going over the next 12 months, while laying the ground for further reform, and avoiding a catastrophic slump in supply. This scheme – or something very much like it – is the most cost-effective way to protect jobs and keep Britain building.”

June 9, 2020

United Trust Bank’s Structured Finance Division completes £10.9m investment facility

United Trust Bank (UTB) has completed a £10.9m Investment Term Loan for an existing customer affected by the Covid-19 lockdown.

Successful property investment business and landlord, Rosewall Properties Limited, typically acquires properties, in this instance a redundant office block, adds value via planning enhancements, before converting/developing and then retains the completed scheme in its substantial rental portfolio. This development of 45 new apartments in Greater London was completed at the outset of the coronavirus outbreak resulting in what could be an open-ended delay to the letting process and income generation.

Rosewall Properties approached UTB’s Structured Finance division at the onset of the lockdown with a view to refinancing an existing development loan on to a longer-term investment facility and release equity from the company’s latest project back into new commercial investment opportunities. The Bank’s Structured Finance division has completed in the region of £40m of loans to support new and existing customers with similar requirements since the lockdown began.

Despite the challenges presented by the Covid-19 lockdown, UTB’s Structured Finance team was able to complete a flexible hybrid solution giving the customer additional breathing space to find tenants and a competitive interest rate reducing when the apartments are let and income is generated.

Lahrie Mohamed, director of Rosewall Properties Limited, commented:

“The timing of the pandemic lockdown couldn’t have come at a worse time for us. We are an agile and innovative company, so the situation didn’t slow us down too much. The hardest thing was trying to find a lender with the same attributes. The uncertain climate and challenging operational conditions saw lenders drop like flies and the marketplace for refinancing shrank overnight.

“Fortunately, Gerard and the team at UTB take a different approach. They looked for reasons to work with us rather than reasons not to. They found ways to overcome obstacles created by the lockdown restrictions and quickly came up with a flexible and competitive solution which met our requirements. In these uncertain times it’s refreshing to find a lender willing to go the extra mile and deliver on its promises.”

Gerard Morgan Jackson, head of UTB’s Structured Finance division, commented:

“With the current situation creating a host of problems for lenders and borrowers alike, it would be easy to put things on hold or use the current circumstances as a reason to delay completions until the future is clearer. Rather than follow the herd, we chose to back our client and to complete a substantial investment facility for them, working through issues created by the pandemic.

“There are few lenders that would take on a newly completed development on a 5-year investment basis in the current climate. In this instance we quickly got to know the business and we took great comfort in Rosewall Properties’ excellent track record and abilities. Being able to source and complete a facility like this during lockdown shows just how innovative, tenacious and customer driven UTB are. We have confidence in our clients and will support them through all weathers.”

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