Mint Bridging joins The Association of Short Term Lenders

Mint Bridging has become the latest lender to join the Association of Short Term Lenders (ASTL).

Mint Bridging offers bridging finance for borrowers, developers and investors, with loans available up to £5m for property purchases, developments, auction purchase, business cash flow, investments and more.

Paul Wertheim, Operations Director at Mint Bridging, says: “We join the ASTL at an exciting time in Mint’s journey, as we look to further improve the way we do business in the forthcoming months. Our team at Mint Bridging has more than 100 years of collective lending experience and we have lent on a short-term basis in virtually every scenario which can exist. Success is more than just being experienced though. Success, for us, is as much about building, nurturing and growing relationships with brokers and borrowers, as well as building a sustainable business. These are values that we share with the ASTL and we are very much looking forward to working with Vic and the team to help drive the market in the right direction.”

Vic Jannels, CEO of the ASTL, says: “I’d like to welcome Mint Bridging to the ASTL. Like all of our members, Mint Bridging has demonstrated a customer focus and commitment to high standards that are so important in the development of any healthy market. We are gaining a lot of traction at the ASTL in our conversations with HM Treasury and thought leadership in the industry, and every new member we welcome strengthens our ability to uphold standards and promote the interests of the short term lending sector.”

Press Release: Wednesday, 22^nd July 2020

Working at speed to deliver a healthy market

The rate of change in the short-term lending market since March has been immense, but one of the great things about our sector is that it is possibly the most resilient and adaptable area secured lending.

Lenders have been incredibly quick to respond to the changing environment and evolve their processes accordingly and while some lenders have pulled back from the market, many have continued to lend throughout lockdown, using technology and remote valuations to continue to operate effectively. They are, rightly, taking appropriate precautions to mitigate risk, and we have seen a tightening of some criteria, such as limiting LTVs, reduced appetite for larger loan sizes and taking a more cautious approach to ground-up developments.

We currently find ourselves in a situation where levels of activity are extremely high but caution ultimately still reigns, which is the correct approach for a number of reasons.

The removal of the furlough scheme in the coming months is expected to lead to a spike in unemployment that will put further downward pressure on the economy and questions remain as to the potential shape of any recovery.

While the furlough scheme has been welcomed by lenders, another piece of government intervention has provided them with significant logistical considerations and placed a disproportionate financial strain on short-term lenders. The current enforcement moratorium, which suspends recovery activity for lenders was introduced with the best intentions of keeping people in their homes during the pandemic. But it has been applied with a broad approach and it has been clear to us at the ASTL that there is a need for far more detailed provision in the mortgage market. We are already seeing consumer detriment and there have been examples of peer-to-peer lenders calling in their loans at short notice as they are unable to address the mismatch between funding and lending requirements during this period when their powers of recovery have been stifled.

We have sought to encourage HM Treasury to recognise that the market is made up of many products, not just traditional long-term owner-occupier residential mortgages and we have offered our help as part of a balanced response that best supports the UK’s economic recovery. And I am happy to say that we have made some progress in speaking to the right people and we will continue to push for greater engagement, both on this issue but also any future issues where it would be beneficial to include the insights and ideas of the short-term lending market.

The market is performing well and while there may be some challenges on the horizon, where there is demand from customers and an appetite to meet that demand, there will always be the ingredients for a healthy market. At the ASTL, we are receiving substantial levels of interest from potential new members and associate members as we continue the process to grow our membership and influence, and we will do all we can to help deliver that healthy market.

Vic Jannels, CEO of the ASTL

A version of this article appeared in the July digital edition of Business Moneyfacts

Bridging lenders upbeat on long-term prospects

The latest sentiment survey from the Association of Short Term Lenders (ASTL) shows that bridging lenders are upbeat about the long term prospects for the UK economy despite the uncertain outlook and immediate challenges faced by the sector.

The research, which was conducted amongst members of the ASTL in the first half of July, found that more than 64% of bridging lenders are confident about the long-term prospects for the UK economy, compared to just 50% when the survey was run in June last year.

Lenders are split on the immediate prospects for their own businesses, with 41% saying they expect the turnover of their business to grow in the next six months, matching the 41% who think their turnover will shrink.

Overall, 41% of lenders expect the turnover of the bridging finance sector to grow in the next six months, with 36% saying they think it will shrink. However, 43% of lenders say they think that house prices will fall in the next six months, with just 24% expecting there to be slight growth.

Competition in the sector is unlikely to increase in the second half of 2020, with just 5% of lenders saying they think competition will increase, while 57% say that competition is likely to decrease.

The ASTL Positivity Index

Vic Jannels, CEO at the ASTL, says: "2020 has been a year like no other, but short-term mortgage lenders have demonstrated their resilience and ability to adapt in challenging circumstances. It is particularly encouraging that so many of our members are confident about the long-term prospects for the UK economy. And while we face much uncertainty and many challenges in the immediate future, those businesses that continue to maintain high standards of underwriting and customer focus will be well-positioned to benefit from economic recovery in the future.” 

Press Release, Monday 20th July, 2020

Moving on from a mortgage payment holiday

If something appears too good to be true, it probably is – and this adage is ringing true for some of the huge number of customers who chose to defer the payments on their mortgage as part of the payment holiday scheme that was announced by the government in March. It was never a payment holiday – merely a deferral – but there are other downsides for borrowers who have taken up the offer, and these are now rapidly becoming apparent.

According to a recent poll by Mortgage Solutions, nearly four in 10 (39%) brokers said that they couldn’t place a case as a result of their client having taken a mortgage payment holiday or having accessed a government support scheme. A further 22% said they couldn’t place a case initially but had managed to place it elsewhere, possibly incurring less attractive rate options. Given that payment holidays have been taken on more than 1.8m mortgages since March, there will be many clients whose finance options may be severely curtailed as a result. Yet they will not know this until they commence investigations for a new mortgage!

It was widely accepted that this government initiative was both a positive and necessary step to support financial hardship brought about by COVID-19. This mortgage payment holiday should not negatively impact a borrower’s credit report, but some lenders seem to have been registering them as a late or missed payment.

This may be rectified if the client complains, but this process takes time and, as the FCA has pointed out, credit files are not the only source of information available to lenders. Many have introduced supplementary questions as part of their application process to understand how applicants have navigated the COVID-19 period and there seem to be particular issues for landlords who have taken a payment holiday in the last three months.

The lesson for brokers here is clear – check with your clients upfront regarding payment holidays. As with any complication with an application, it is better to fully understand the situation from the outset than to find out only once a case has sat with a lender’s underwriters for a period of time.

If you are working with a landlord client who has taken a payment holiday in the last three months and is looking for a new mortgage where an urgent completion is required, perhaps to purchase a new property or release funds to grow their portfolio, it could be the case that short-term lending might offer the solution they are looking for. This may not be the best approach for all clients, but in the right circumstances a bridging loan may help your client to achieve the fast completion they need. It may also elongate the time since they took their payment holiday and the encourage greater acceptance by lenders that this was not a choice by the borrower, but rather more one of need at the time of the pandemic.

Even if bridging is not the right route for your client, there is no harm in opening a realistic dialogue with them, so that their plans and motivations are clear in order that they can be provided with the right help and advice when the time comes to make similar decisions in the future.

Vic Jannels, CEO of the ASTL
A version of this article appeared in the July online edition of Specialist Lending Solutions