David Rubin & Partners Ltd joins the ASTL

David Rubin & Partners Ltd joins the ASTL

David Rubin & Partners Ltd, a leading firm of restructuring professionals, has joined The Association of Short Term Lenders (ASTL) as a new associate member. David Rubin & Partners Ltd is the second associate member to join the ASTL since the beginning of the year. Membership of the ASTL now stands at 35 full members and 31 associate members.

David Rubin & Partners Ltd specialise in corporate and personal recovery, restructuring insolvency and guidance around business turnaround and provide quick solutions to underperforming businesses. It offers insolvency advice on a range of issues including corporate restructuring, forensic account investigations, voluntary arrangements and liquidation.

Paul Cooper, Partner at David Rubin & Partners Ltd, added: “We are delighted to be accepted as an Associate Member of the Association of Short Term Lenders and look forward to working with our fellow members to protect their interests, and promote best practice in the industry.”

Benson Hersch, Chief Executive of the ASTL said: “The growing diversity of the ASTL’s membership allows us to promote and protect the interests of our members while making sure the highest standards are achieved. David Rubin & Partners Ltd abides by the same standards that the association operates by and their practical approach, vast experience and depth of knowledge will prove to be a real asset to ASTL members.”

Press Release: Thursday, 8 March, 2018

The importance of good underwriting in the mortgage industry

A director of an invoicing discount finance firm once told me that there was a major difference between invoice discounting credit management and that of bridging finance. In invoice discounting you had to constantly monitor and be wary of the borrower and the relationship is often adversarial. In bridging, the opposite applies – you work with the customer to achieve the best outcome for both parties.

In bridging, a key element is the exit route. Whether this is by refinancing, sale or other method, lenders need to satisfy themselves that the proposed exit is realistic. This means that the underwriting team need to consider a wide variety of issues.

In the case of a sale exit for example, they need to assess the chance of achieving the proposed sale price, the market in the location, the type of property and much more. Where the prospective ultimate purchaser is likely to need a mortgage; are there any location or construction factors which would make obtaining a mortgage difficult? Lenders need to consider if the term and the likely time to obtain a sale coincide. For refinance, bridging lenders need to assess if the refinance proceeds will be sufficient to cover the amount due by the borrower. A high proportion of bridging loans do not require interest instalment payments, as the interest is paid when the loan is redeemed. Any delay in repayment could result in interest and charges significantly eroding the original headroom. This problem is exacerbated when property prices are on a downward curve or when sales are sluggish. When things go wrong, lenders try to avoid litigation, which is not in the borrowers’ best interests.

The issue of affordability does not come into play initially, as no interest instalment payments are required, but it does apply when the borrower is seeking a long-term refinance loan.

Development loans require specialist lender expertise and the ability to step in to complete the project if the original contractor is unable to do so. It’s important to assess the ability of the borrower to carry out the project to completion.

Where practical, most lenders try to see the prospective borrower face-to-face to get a feel for their experience and their ability to meet obligations. It’s also a good idea for cases to be reviewed by more than one underwriter, as sometimes one can get carried away by what seems to be a good deal, without seeing the pitfalls.

Above all, contact with the borrower needs to be maintained on a regular basis to gauge progress of the exit route. If there are problems, it’s essential to have a relationship with the borrower so solutions can be sought well before the end of the loan term. Many lenders have funding lines which make it difficult to extend loan terms.

So, vigilance is a key factor, but so is the ability to assess risk. Bridging is a bespoke financial product which requires human intervention and the skilled underwriters who have a nose for risk will always be needed.

Benson Hersch, CEO of the ASTL

This article appeared in the February edition of CCR Magazine

ASTL quarterly results crash through the £3 billion mark!

	Quarter ended 31 Dec 2017 compared to Quarter ended 30 Sep 2017		Quarter ended 31 Dec 2017 compared to Quarter ended 31 Dec 2016		Year ended 31 Dec 2017 compared to Year ended 31 Dec 2016
Loans written (£)	+19.6%		+ 31.7%		+24.6%
Loan book (£)*	+4.6%*		+12.9%*		+12.9%*
Applications (£)	-11.0%		+1.6%		+42.6%
Loans in default (£)*	-6.3%*		-4.7%*		-4.7%*
*As at the end of period date

ASTL quarterly results crash through the £3 billion mark!

In positive news for the sector, the final quarter of 2017 saw the first time that quarterly completions for ASTL members exceeded £1 billion. With annual completions exceeding £3.5 billion, it is clear that business is booming for ASTL members.

Figures compiled by the ASTL’s auditors from its bridging lender members for Q4 2017 have painted a healthy picture of the sector. The value of loans written for the quarter ending 31 December 2017 revealed an increase of 19.6% compared to the previous quarter. Annual completions rose by 24.6% to over £3.5 billion. In comparison to the same quarter last year, the value of loans written in the quarter has increased by 31.7%.

The size of members’ loan books is also healthy. Total loan books are continuing to climb, with a rise of 4.6% compared to Q3 2017. Compared to the end of Q4 2016, the value of loan books has risen by 12.9%, to £3.7 billion.

However, the quarter did see the pace of increases in applications continue to decrease (11%) compared to Q3 2017. While those on an annualised basis are up 42.6% on the year ended December 2016; making up a total of £18.93 billion. Although applications do tend to be unreliable indicators and are dependent on how many lenders are offered the same deals.

Benson Hersch, CEO of the ASTL says: “Our figures highlight that, despite ongoing concerns relating to Brexit and the property sector, the bridging finance industry remains in good shape and is ready and willing to meet the challenges that 2018 may bring.

“The bridging sector continues to provide a vital role in the economy by offering customers access to the capital they need in a responsible and sustainable way. It continues to be an important part of the alternative finance market.”

These figures are taken from the responses from ASTL members, which include most of the key lenders in the bridging market.

Press Release, Monday 26 February, 2018

Method Valuation UK joins the ASTL

The Association of Short Term Lenders (ASTL) today welcomes new associate member Method Valuation UK, an established panel manager for short-term and bridging lenders. The ASTL membership now stands at 35 full members and 30 associate members.

Offering advice and guidance from experienced property professionals, Method Valuation UK offers a full range of services from panel management to project services where lenders do not have established connections in a particular geographical location or for a specific property type.

Niall Deas, Operations Director, Method Valuation UK, added: “We are really excited about becoming an associate member of the ASTL. Over the years we have striven to create a business that is focused on meeting the needs of the bridging and short-term lending community and, being part of a larger property group, we are able to provide supporting advice on all aspects of property and valuation in addition to panel management services.

“We hope to develop relationships with all the lenders who are members of the ASTL and who require quality panel management advice to help mitigate lending risk to their business.”

Benson Hersch, Chief Executive of the ASTL said: “Method Valuation’s expertise in bridging makes this a strong addition to the ASTL’s growing membership. It is a respected business, fostering a culture of professionalism.

“The ASTL welcomes Method Valuation and looks forward to working with Niall.”

To find out more about the ASTL please visit: www.theastl.org

Press release Wednesday, January 24, 2018