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Vote for UK Property Finance in the 2019 Bridging & Commercial Awards
Once again, we’re delighted to announce that UK Property Finance has been nominated for an award at one of the year’s most prestigious industry events. UK Property Finance is up for the ‘Best Development Broker’ award at the 2019 Bridging and Commercial Awards ceremony, said to be held on June 6th at the Hurling ton Club.
Since going into business, we’ve measured our success by the satisfaction and prosperity of our customers. Far from a simple service provider, we take real pride and pleasure in helping our customers across the UK achieve more and perform at the highest possible level. Our specialty is the kind of flexible, affordable, and dynamic financial brokerage you won’t find on the high street.
We therefore couldn’t be prouder of our nomination for ‘Best Development Broker’ of 2019, recognising our ongoing efforts to outperform the competition.
Rounding off an incredible year
The past year has proved to be quite remarkable not just for us personally, but for the entire industry. Irrespective of growing uncertainty, the UK’s specialist lending market has experienced enormous growth and expansion.
At the end of last year, figures showed a record-high total bridging loan completion value of £3.98bn for the first time. This amounted to an increase of more than 21% compared to the same period in 2017, illustrating the extraordinary growth and development of the industry as a whole.
Britain’s appetite for dynamic, affordable, and intelligent financial services is growing all the time, and we’re here to offer the advice you need to find your ideal funding solution.
Premier financial products
Our relentless commitment to customer satisfaction and the provision of bespoke financial products has earned us a place at the very top of the table. UK Property Finance is a whole-of-market UK broker, working with an extensive network of specialist lenders up and down the country. We go the extra mile to pinpoint the perfect products to suit our customers’ requirements and budgets, acting fast to provide prompt payouts and immediate decisions.
Whatever the outcome of the day, UK Property Finance couldn’t be happier with our nomination for ‘Best Development Broker’ of 2019. Win or lose, we’ll continue to provide the service that’s made us the number-one choice among discerning investors and developers across Britain.
Given the choice, we’d of course prefer to win! Register your vote at the following address and back UK Property Finance at the 2019 Bridging and Commercial Awards: https://bridgingandcommercial.co.uk/awards_2019_nominations.php
Committed to Quality
UK Property Finance operates as an FCA-regulated broker, providing 100% independent financial advice for business and private borrowers across the UK. Our unrivalled experience and expertise enable us to link discerning borrowers with dynamic specialist lenders in order to access flexible and affordable funding solutions not available on the high street.
For more information on any of our services, get in touch with the UK Property Finance customer service team today.
Bad Credit Homeowner Loans: A Lifeline You Won’t Find on the High Street
Unless you maintain a flawless credit score, which is borderline impossible, you’re unlikely to qualify for a conventional loan. As far as most high-street lenders are concerned, credit reports are still the black-and-white be-all and end-all of lending. Nevertheless, this doesn’t mean you’re entirely out of the running.
You simply need to set your sights on a more appropriate type of loan to suit your needs and circumstances.
What are bad-credit homeowner loans?
As the name suggests, bad credit secured loans are loans that are secured on appropriate collateral provided by the borrower. In this instance, homeowner loans for poor credit applicants are secured on the borrower’s property.
Unlike conventional unsecured loans, poor credit-secured loans are specifically designed for customers with imperfect credit scores. Rather than being scrutinised based on their financial histories, applications are considered in accordance with the borrower’s collateral.
Just as long as the value of the property covers the total cost of the loan, everything else is inconsequential. Hence, secured loans for poor credit applicants can be obtained for almost any purpose and for almost any value.
What can bad-credit homeowner loans be used for?
As touched upon above, secured loans for bad credit can be used for just about any purpose imaginable. Nevertheless, there are certain uses for secured loans with bad credit that are more common than others, which include:
- Consolidating existing debts and outgoings
- Funding home improvements and alterations
- Paying unexpected bills
- Meeting urgent business expenses
- Covering the costs of vehicle repairs
- Funding luxury purchases and holidays
Just as long as you can comfortably repay the loan, a secured loan using your home as collateral could be ideal.
How do homeowner loans with bad credit work?
Irrespective of how much you need and what you need it for, you’ll find the application process surprisingly easy. As the total cost of the loan is covered by the value of your property, no credit checks or extensive proof of your financial history are necessary. This simplifies and accelerates the process significantly, enabling the funds you need to be accessed as quickly as possible.
Homeowner loans for bad credit can be repaid over as many months or years as suits your budget, typically with more competitive rates of interest than unsecured loans. So even if you have a less-than-perfect credit score, this doesn’t mean you’ll be looking at elevated interest rates and excessive borrowing costs.
How can I get a good deal?
If you’re interested in applying for a homeowner loan with bad credit, it pays to compare the market with the help of an independent broker. Look beyond the High Street and consider as many deals as possible from specialist lenders across the UK.
With bad-credit loans, it’s all about flexibility. You need a dynamic service provider that’s willing and able to create a tailored solution to suit your requirements and your budget. With the help of UK Property Finance, that’s exactly what you’ll get!
For more information or to discuss our bad-credit homeowner loans in more detail, contact the team at UK Property Finance today!
Understanding How to Use Collateral for a Secured Loan
It is important to be able to have access to loans when you need them. Sometimes you will need to provide a lender with collateral in order to receive the favourable loan terms that you are looking for; this is typical of secured loans. If you have yet to secure a loan with collateral, then you may not understand how the process works. There are specific things that will be accepted as collateral, and knowing what they are as well as the benefits is important.
Why is collaboration necessary?
Collateral is necessary for loans when the lenders need assurances. Sometimes people with less than stellar credit will need access to loans. If the lender deems the loan to be risky, then having collateral in case something goes awry will limit their risks. This makes it easier for them to justify giving you the loan, and it can wind up giving you more favourable terms.
What are the benefits of using collateral for a loan?
There are various benefits to using collateral to get a secured loan. The most apparent benefit is that it allows people with less than perfect credit to get the loans that they need. This can lower the interest rates on the loan and will also make the approval process go smoother. If you want to get a loan and your credit score is less than 700, then it might be in your best interests to use collateral to make things as manageable as possible.
What are the negatives of using collateral for a loan?
The negatives of using collateral for a secured loan are pretty easy to understand. You are using your assets to secure the loan, so if something goes wrong, you could potentially lose those assets. If your vehicle is being used as collateral to secure the loan and you don’t pay it back, then your car could get repossessed. Also, sometimes these loans are long-term, and you can get stuck paying interest for a long period of time if you don’t plan ahead.
What is accepted as collateral?
The type of collateral that is accepted for a loan will depend on the type of loan that you are applying for. Generally speaking, there are three types of loans that you will be able to seek out: personal loans, business loans or commercial finance, and auto loans. Each of these three types has differences in the types of collateral that you can use to secure a loan.
Personal loans allow you to use real estate, home equity, vehicles, and even your pay checks as collateral for a loan. There are also cases where savings accounts, investment accounts, and valuables are accepted as collateral. The most common collateral that is used for these purposes is definitely real estate, vehicles, and home equity.
Business loans allow people to use similar things as collateral but will also add in a few options. You can use business assets such as inventory, machinery, or a blanket lien as collateral. Auto loans will allow you to use the car that you are purchasing as collateral or other vehicles that you already own. No matter what type of loan you are applying for, the value of your assets will need to be determined before moving forward.
Why are Specialist Lenders More Open to Lending Than Traditional Banks?
The last decade has seen the ‘rebirth’ of the specialist sector. The current specialist lenders are more conservative than in the past and are governed by tighter legislation, such as increased capital requirements, making them less vulnerable in the event of a downturn. There have been various reasons for this, with more customers struggling to meet the strict lending criteria of high-street banks. Specialist lenders are able to deal with more complex applications that would normally fall outside the main stream lender’s criteria, for example, someone who doesn’t have a regular stream of income, has recently moved jobs, or is purchasing a right to buy or shared ownership property.
Furthermore, self-employment and contracting are growing. Unusual income patterns have become common, such as those of freelancers or people with varying incomes, etc. Lenders who use credit scoring will often turn these clients away. Specialist lenders build themselves around specific customer groups and are therefore able to help these clients. Also, specialist lenders will help clients who have had a small blip in their credit history, which can usually be easily explained, or due to personal circumstances such as bereavement or unemployment. These individuals are not repeat offenders and have a good history before and after such an event. Unfortunately, the mainstream lender will not see it this way.
The mainstream lender has shown no interest in winning business that falls outside their automated underwriting and is designed to help the conventional borrower. This means that the margins for the specialist sector should remain higher or keep growing.
Richard Tugwell at Together says, ‘In many ways, the specialist market acts as a complement to the mainstream lenders and ensures that the customers have a choice. I think that the challenge for the specialist market is ensuring more consumers are aware of this offering, and that’s something that the lenders and brokers need to work together on.’
Specialist lending is now more regulated, and we should see less volatility than before as the focus is on affordability. This type of lending is set up to cater to complexity, not poor quality or irresponsible lending. Brokers who keep a closed mind to this sector are losing out on a big share of the growing specialist/subprime sector.
Specialised lenders are more suited to adapting to changing criteria compared to high-street lenders. Mainstream lenders take longer to change their criteria due to the legacy systems. Mainstream lenders need to adopt a manual underwriting approach instead of credit scoring. Brokers need to ask or determine what type of lender the client needs. Brokers need to do their own research to get an understanding of this market and take advantage of these opportunities so that they can help every single customer find the best solution for them, whatever their circumstances.
Research has also suggested that people are not fully aware of the options available to them. As traditionally, the market has focused on mortgages for house purchases or cash. It is important that the buyers are made aware of all the options available to them in the market so that they can make informed choices.
No Brexit Deals and Bridging Loans
There are less than six months before the UK officially leaves the European Union. We are yet to see what kind of deal Britain will leave with. What does this mean for Britain’s alternative finance industry, especially the bridging market?
The Uk’s departure from the EU without a Brexit deal might mean a rise in interest rates. We have already seen the base rate rise to 0.75% in August, and the Bank of England is not expected to raise the rates until next year. However, the Bank of England may be forced to raise rates to defend the pound if no deal has been agreed upon. We have already seen the fluctuations of the pound since the referendum. Trevor Williams of Derby University has said that ‘bridging loans could become more expensive, as if the risk is greater, the lenders are likely to want better returns for them. He has also predicted a tougher environment for investors.
At the same time, some also argue that we may see a repeat of falling house prices, and the Bank of England might have to reduce rates and relax the rules around the housing market. KPMG, the accounting firm, argues that the Bank of England is unlikely to increase rates due to the uncertainty that looms over the economy.
Inter bay, the lender, has found that over 52% of brokers feel that reform to the tax legislation will boost the bridging market. 19% of brokers, according to Inter bay, felt that the removal of the 3% additional stamp duty for landlords would help to drive growth in the market. Some brokers also believe that greater regulation in the sector will boost growth in the bridging market.
The last decade has seen the rise of the alternative finance market to 4.6 billion. The government has made housing more affordable with help to buy and other schemes that have helped large construction companies. The smaller developers and investors have been turning to the specialist lending sector. Bridging and other specialist lenders offer them quick, short-term funds to get their projects started. The arrival of new or more lenders in the industry has meant more competitive prices than ever before. This has led to growth in the alternative finance industry.
To have continued growth in this sector, the focus should be to educate people about the availability of these options in the market, to educate them that mortgages are not the only option available to borrowers, or to educate brokers who shy away from alternative finance about the pricing and criteria.
The most (and least) popular reason why investors applied for a bridging loan in Q2 2018
Bridging Trends, a quarterly publication that reports on key trends in the bridging finance market and short-term loan industry, has recently released their report on the latest trends for Q2 2018—and the results are interesting, to say the least.
The biggest increase in the use of bridging loans has been for refurbishment purposes: up to 34% in Q2 from 18% in just Q1 2018. This signals that the UK bridging market, both supply and demand, is resilient, even if growth is not at the same levels as it was in 2013. Despite gloomy Brexit predictions, people are still very much in need of a product that most mortgage lenders do not offer.
In fact, refurbishment has proven to be the most popular use for obtaining bridging finance this quarter, making up almost one-third of the reasons why investors opt for such a loan.
Clearly, this surge shows that landlords and property investors aren’t going to stop expanding their portfolios anytime soon.
Whether it’s converting properties for other uses or refurbishing those in a dilapidated state, it’s clear that the need for quality housing on the UK market is still very much present.
On the other hand, the usage of bridging loans for auction purchases has seen the biggest drop—down to 7%, up from 20% just in Q1 2018. Perhaps people aren’t feeling too adventurous about purchasing auctioned properties when prices have fallen across the board and the uncertainty of Brexit is still hanging around, at least for one more year.
Where is the UK bridging finance market heading?
Despite respondents’ predictions in EY’s first study of the market in 2017, growth in the bridging loans industry has continued at a slow but steady pace.
Although we can’t compare this rate to the one we saw right after 2013, Mintel Forecasts is still optimistic that 2018 and 2019 will see growth, even if it’s at half the rate it was back then. This said, the biggest increase can already be seen in the commercial and development markets.
Another prediction that Oxford Economics had for 2017—which has now been surpassed—was that growth would fall flat or even become negative for the year right after the referendum.
However, as the Bridging Trends infographic shows, this prediction was unfounded, as total gross lending has been £197.94 million in Q2, an increase of £43.9 million from Q1 2018.
Challenges are still present; outlook is optimistic.
Without a doubt, economic uncertainty influences both borrower and lender behaviour. Another factor that comes into play is the borrowers’ perception of the bridging finance market, or how trustworthy lenders appear to investors. Last-minute regulatory changes can also cast a shadow on the growth of the short-term loan market.
Yet despite all of this, we think that the fundamental need—that of quality housing and loans for investors to create that housing—will counterbalance any turbulence that might arise.
The same Mintel forecast from 2017 showed a CAGR (compound annual growth rate) of 11% for the 2018–2022 period.
With all of this in mind, there has never been a better time to opt for a bridging loan. There are more lenders now than ever, which means that we are compelled to offer borrowers the best terms and rates that we can. Why not take a minute to inquire to see if our bridging loans are for you?
Lender Reliability an Increasing Factor for Bridging Loan Brokers
Value for money, an innovative range of products, industry experience—all the kinds of things that count for a lot when selecting a bridging loan provider. Nevertheless, the results of a recent survey would seem to suggest that more brokers than ever before are considering the overall reliability of lenders when seeking financial products and services for their clients.
Specifically, 60% of brokers in the UK are viewing lender reliability as a crucial consideration.
The survey was carried out by representatives of United Trust Bank (UTB), which quizzed more than 150 brokers across the country regarding their opinions on reliability. When asked directly whether lender stability and reliability were important when placing new business, 60% stated that they were indeed important factors.
A surprisingly high 36% of brokers said that stability and reliability weren’t factors, while 4% said that they were undecided.
which would seem to suggest that while most brokers are taking an active interest in the reliability of the lenders they work with, more than one in three is doing no such thing. In this sector in particular, the importance of working with reliable and stable lenders is particularly high. Often operating as independent service providers without the established security of a major bank or lender, smaller lenders are naturally more prone to encountering difficulties than their conventional counterparts.
From the perspective of the broker, placing your business with unreliable lenders on behalf of their clients does little to strengthen their own reputation and stature. From the perspective of the client, these are the kinds of debatable practices that can result in unnecessary delays, complications, and difficulties obtaining the funds requested and promised.
“In uncertain times, it’s natural that brokers and intermediaries want complete confidence that the lenders they recommend to their clients are going to deliver the funds and the service they’ve promised,” said United Trust Bank group managing director Harley Kagan.
“Many brokers know from experience that in challenging markets, some lenders may try to change their credit decisions while others have difficulty delivering a prompt service or releasing funds on schedule.”
“It only takes one or two examples of a lender changing a deal for that to knock a broker’s confidence in the lender and the customer’s confidence in the broker.”
Common sense would therefore dictate that the only sensible approach is to work exclusively with brokers who prioritise lender stability and reliability accordingly. This is something that should be made abundantly clear by the broker, particularly if asked directly by the client.
If unsure as to how the broker operates, be sure to ask as many questions as necessary to clarify their approach to lender selection. Should they fall into the alarmingly high 36% bracket that considers reliability to be unimportant, you might want to take your business elsewhere.
Mortgage Brokers Turn to Bridging Loans As A Quicker Route To Get Clients The Finance They Need
Business and domestic borrowers alike are increasingly turning to independent brokers to access the finances they need with speed and simplicity. In order to cater to this growing demand for dynamic financial products, brokers and financial advisers alike are showing growing preference to bridging lenders and comparable independent service providers.
During the second quarter of 2017, bridging loan activity in the United Kingdom peaked at an impressive £150 million. Once a comparatively niche and unexplored area of the mortgage market, bridging finance has seen extraordinary gains over recent years, spiking a full 26% in Q2 compared to the first three months of the year. which represented the single highest quarterly increase since the launch of the Bridging Trends survey in 2015.
As for the primary motivations of brokers and clients alike for seeking these kinds of services, the vast majority cited the inevitable delays in receiving financial assistance from traditional banks and high-street lenders. Particularly when looking to arrange larger loans like mortgages, traditional lenders are increasingly being viewed as inconvenient and unnecessarily complicated access points by the modern consumer.
The most recent Bridging Trends survey found that the most common reason for bridging loan applications during Q2 last year was to fund refurbishments and general improvements. Approximately 27% of all successful applications indicated this particular use for the funds. Delays in traditional mortgage application completions were the second biggest motivator, accounting for 25% of all bridging lending during the period.
Another interesting finding was the way in which, in spite of bridging activity as a whole spiking dramatically, borrowers in general sought significantly lower sums of money than in previous quarters. The average loan-to-value (LTV) levels dropped to a new low of 45.4%, which again represents the lowest recorded since 2015. The struggling value of the sterling and ongoing uncertainty regarding Brexit are two of the possible factors contributing to the decline in average loan value.
On the whole, however, what’s clear is that the bridging industry in the United Kingdom is looking stronger than ever before as more lenders and borrowers alike explore alternatives to conventional mortgages and financial products.
Comparatively, low interest rates are also credited with the continuous growth of bridging loan applications across the UK, with average monthly interest rates coming out at 0.84% for the quarter.
“Demand for specialist finance remains strong, notwithstanding a slight increase in the average monthly cost of credit to the consumer,” commented MTF Director Joshua Ask, the group behind the Bridging Trends survey.
“What is interesting, however, is that for the first time since reporting began, mortgage delays are not the most popular use of a bridging finance loan, having been replaced by refurbishment.”
“While it is too early to form any conclusions, this may be indicative of a shift in the market. Coming off the back of recent increases in stamp duties and the changes to tax relief on buy-to-let property, more investors in this quarter focused on adding value to their existing investment properties.”