BESPOKE BRIDGING LOAN

& SHORT TERM LENDER

PRESS RELEASES

Central Bridging, 34 Queen Anne Street, London, W1G 8HE Tel: +44 (0)3332 400 506   Email: enquiry@centralbridging.co.uk   Web: www.centralbridging.co.uk Central Bridging is a trading style of Central Bridging Loans Ltd. Registered in England & Wales | Company Registration Number 07728274. Central Bridging is not regulated by the Financial Conduct Authority (FCA). All loans arranged by Central Bridging are non regulated contracts as defined under The Financial Services and Markets (Regulated Activities) Order 2001 and the Financial Service and Markets Mortgage Credit Directive Order 2015. © Copyright Central Bridging Loans Limited Privacy Policy
BRIDGING INDUSTRY REACTS TO NEW PM Boris Johnson has been appointed as Prime Minister following a vote from members of the Conservative party. The   ballot   was   taken   by   159,320   Tory   members   and   Johnson   will   be   taking   office   on   Wednesday   24   July.   Johnson took 92,153 votes, beating Jeremy Hunt’s 46,656. Brian   West,   director   of   Central   Bridging,   added:   “I’ve   always   had   my   concerns   that   the   new   Prime   Minister   is   rather too self-interested and lacks any really deep-rooted political conviction. “I   hope   he   proves   me   wrong   and   that   lurking   somewhere   underneath   that   bluff   exterior   and   unkempt   ‘barnet’   is   a true statesman. “That is what we sorely need.”
ASTL Logo NACFB Logo London Chamber of Commerce and Industry Logo BRIDGING INDUSTRY REACTS TO NEW PM
TO VALUE OR NOT TO VALUE? - THAT IS THE QUESTION. Anyone   involved   in   the   short-term   lending   industry   attending   last   month’s   NACFB   Expo   Event   couldn’t   have   failed   to notice   the   sheer   volume   of   bridging   and   development   lenders   exhibiting.   At   a   record-breaking   show   with   all   138 stands   sold   out   it   was   noticeable   that   nearly   half   of   these   and   a   much   bigger   percentage   of   the   most   lavish   stands belonged to bridging and development lenders. On   face   value   this   can   be   viewed   as   a   barometer   of   the   short-term   industry’s   rude   health   but   look   beyond   the   lavish facades   and   large   marketing   budgets   and   maybe   it’s   just   another   manifestation   of   an   ongoing   battle   to   either   gain or   maintain   market   share?   In   crude   terms   it   could   be   indicative   of   a   fight   to   survive   in   an   ultra-competitive   market that’s already claimed its first high profile victims. This   battle   has   seen   rates   driven   down   to   levels   that   were   unthinkable   only   a   couple   of   years   ago   and   loan   to   value (LTV)   limits   increased,   despite   the   backdrop   of   a   very   subdued   and,   in   places,   declining   property   market.   Now another   trend   is   emerging   that   brings   back   memories   of   2006/07,   that   of   streamlined   underwriting.   Welcomed   by brokers   but   less   so   by   funders,   we   are   now   starting   to   see   the   first   mainstream   lenders   eschewing   the   need   for   a valuation, particularly on selected lower loan to value cases.
TO VALUE OR NOT TO VALUE? - THAT IS THE QUESTION.
BACKING A WINNER. - GOOD RESEARCH IS KEY. With   the   recent,   inevitable   collapse   into   administration   of   the   peer-to-peer   platform   Lendy   around   22,000   retail investors   are   now   left   wondering   how   much   of   the   collective   £165M   they   had   invested   at   the   time   of   closure   are they   likely   to   get   back?   For   2008   and   queues   outside   Northern   Rock   branches   see   now   the   recently   formed   Lendy Action   Group   (LAG)   on   the   internet.   As   the   words   from   the   1997   hit   by   Shirley   Bassey   and   the   Propellor   Heads remind us “It’s all just a little bit of history repeating.” The   sad   fact   is   that   it   really   wasn’t   that   hard   to   foresee   these   problems.   It’s   a   great   shame   that   only   now   are   the founders   of   LAG   using   the   power   of   the   internet   to   gain   a   collective   voice   when   a   little   bit   of   time   spent   researching a   lender   that   was   offering   12%   PA   returns   and   lavishly   sponsoring   Cowes   Week   might   have   enabled   them   to   better assess the risk they were taking. In   a   market   where   some   lenders   are   now   selling   deals   at   less   than   half   the   rate   of   return   Lendy   were   offering   the maths   simply   never   added   up.   Never   has   the   old   saying   “If   something   seems   too   good   to   be   true   it   probably   is”   been more   relevant.   If   I   were   to   walk   into   William   Hill   this   afternoon,   bet   a   £100   on   a   horse   that   I’ve   done   absolutely   no research on just because it’s odds are 12-1 and lose, would I be justified in blaming anyone else?
BACKING A WINNER. - GOOD RESEARCH IS KEY.
BRIDGING INNOVATION - DRIVING THE INDUSTRY DESPITE THE POLITICIANS Just   a   few   years   ago   Belgium   had   a   period   of   nearly   two   years   without   a   government,   a   period   which   saw   the Belgian   economy   outpacing   growth   in   both   neighbouring   Germany   and   the   wider   Euro   zone.   Perhaps   there   is   a parallel   to   be   drawn   here   with   the   current   Brexit   uncertainty   and   political   paralysis   in   Westminster;   after   all   the   UK economy outperformed Italy, France and Germany last year. It   seems   that   whilst   our   politicians   engage   in   a   pro-longed   spell   of   self-induced   navel   gazing   the   rest   of   the   UK population   just   cracks   on   without   undue   interference   from   the   inhabitants   of   Westminster   who,   in   so   many   cases, have   no   hands-on   business   experience   anyway.   Consequently,   the   economy,   including   the   specialist   finance   sector and our own little corner of it, bridge lending, continue to defy all expectations and thrive. Bridging   finance   is   a   maturing   market   that’s   evolving   and   developing   to   meet   the   needs   of   an   increasingly   diverse range   of   individuals   and   businesses   seeking   a   fast   and   effective   solution   to   their   many   and   varied   financial   needs.     Whilst   interest   rates   remain   at   historically   low   levels   new   lenders   have   been   propelled   to   market   on   a   wave   of liquidity from funders seeking a more attractive return on their money.
BRIDGING INNOVATION - DRIVING THE INDUSTRY DESPITE THE POLITICIANS
“THERESA MAY - FIRST PERSON EVER TO PAY FULL PRICE FOR A SOFA AT DFS.” This   was   the   headline   above   a   clever   Whatsapp   picture   one   of   my   mates   sent   me   recently.   It   showed   our   much- maligned    PM    leaving    a    DFS    Furniture    Store    sporting    a    very    sickly    grin.    Now    in    terms    of    a    comment    on    her negotiating   prowess   it   certainly   had   merit   but,   despite   myself,   I   couldn’t   resist   mounting   what,   in   some   small measure, amounted to a defence of poor old Theresa. Whilst   acknowledging   Mrs   May’s   general   ineptitude   I   nonetheless   pointed   out   that   it’s   tough   to   negotiate   a   good discount   on   a   new   sofa   if   the   rest   of   the   folks   back   home   have   let   DFS   know   in   advance   that   she   will   definitely   be buying   one!   My   friends   mildly   amusing   picture   was   in   fact   a   sad   indictment   not   only   our   Prime   Minister   but   of   the vast majority of our MPs. As   if   wasn’t   bad   enough   watching   the   government   failing   to   properly   prepare   for   a   ‘no   deal’   and   making   a   complete hash   of   the   negotiations   we’ve   then   had   to   watch   as   parliament   finally   handed   the   initiative   lock,   stock   and   barrel   to Brussels   by   failing   to   agree   on   pretty   much   anything   other   than   ruling   out   a   ‘no   deal’   under   any   circumstances! Monsieur’s Barnier, Junckers and Tusk could barely contain their glee!
“THERESA MAY - FIRST PERSON EVER TO PAY FULL PRICE FOR A SOFA AT DFS.”
BARGAIN HUNT - UNCERTAINTY GIVES RISE TO OPPORTUNITY Last   month   this   column   drew   inspiration   from   the   long   running   BBC   television   show,   Homes   Under   the   Hammer,   to explain    how    property    related    programmes    have    played    an    important    role    inspiring    a    generation    of    property investors   and   developers.   In   what   may   develop   into   a   ‘TV   inspired’   trend   this   latest   article   unashamedly   steals   its headline from another popular BBC show, Bargain Hunt! In   February,   Sonal   Thakrar,   partner   and   Head   of   Residential   Property   at   leading   London   law   firm   Mishcon   de   Reya stated   that;   “Brexit   is   creating   huge   uncertainty,   but   it’s   also   a   fantastic   chance   for   those   who   are   savvy   and   brave enough   to   buy   something   to   keep.”   She   was   talking   about   a   steady   flow   of   high-end   London   property   transactions that Mishcon are handling where buyers are securing very substantial discounts on the original asking price. Long    before    the    term    Brexit    came    into    the    public’s    consciousness,    the    London    market    was    disproportionately impacted    by    the    stamp    duty    changes    introduced    by    then    Chancellor    of    the    Exchequer,    George    Osbourne    in December   2014.   He   followed   these   up   by   introducing   a   raft   of   additional   property   taxes   culminating,   in   early   2016, with   an   additional   three   per   cent   levy   on   top   of   stamp   duty   charges   for   the   purchase   of   second   homes.   In   doing   so he further compounded the downward momentum in prime London house prices.
BARGIN HUNT - UNCERTAINTY GIVES RISE TO OPPORTUNITY - Brian West, Director, Central Bridging
FORMING A POPULAR FRONT As   we   move   into   a   new   year   it’s   fair   to   say   that   bridging   has   never   been   so   popular.   Those   that   predicted   2018,   with all   its   economic   and   political   uncertainty,   would   see   the   UK   specialist   lending   market   in   decline   have   proved   to   be somewhat   wide   of   the   mark.   Indeed,   from   beginning   to   end   the   year   saw   a   steady   flow   of   new   short-term   lenders being launched. With   interest   rates   remaining   at   historically   low   levels   new   entrants   were   propelled   to   market   on   a   wave   of   cash   by capital    holders    seeking    a    more    attractive    return    on    their    money.    Third    Party    funders    in    the    shape    of    private investors   and   family   offices,   hedge   funds,   challenger   banks   and   even   the   average   man   in   the   street   through   peer   to peer   lending   platforms   all   fuelled   the   continued   growth   of   the   market   both   in   terms   of   the   volumes   of   business being written and the sheer number and diversity of lenders. By   the   years   end   increased   competition   had   driven   rates   down   to   levels   that   were   unthinkable   just   three   or   four years   ago   whilst   loan   to   value   limits   had   increased   despite   the   backdrop   of   a   very   subdued   and   even   in   pockets declining property market.
FORMING A POPULAR FRONT
KYC, AML, DD… Has the world gone acronym mad? Steadily   increasing   loan   to   values   despite   a   static   and   in   places   declining   property   market,   a   seemingly   endless   rate war   squeezing   margins,   a   dearth   of   experienced   industry   personnel   and   a   relaxation   of   underwriting   standards begin   presented   as   service   level   enhancements.   With   Industry   standards   coming   under   pressure   against   a   backdrop of   Brexit   induced   political   paralysis,   macro-economic   uncertainly   and   of   course   recent   specialist   lender   collapses   is it   any   wonder   that   some   commentators   are   now   questioning   whether   the   resilience   of   the   short   -term   lending market is perhaps being pushed a little to far? There   are   certainly   many   challenges   facing   the   owners   of   both   established   lending   platforms   and   newcomers   to   the market    but    perhaps    the    biggest    single    worry,    the    one    that's    still    most    likely    to    cause    sleepless    nights,    is    the perennial   threat   summed   up   in   a   single   five   letter   word,   that   of   'fraud'.   It's   not   hard   to   see   why   an   industry   that   is predicated   on   speed   of   turnaround,   where   lenders   regularly   trumpet   the   fact   that   they've   completed   a   complex   deal in a matter of days.
Getting the best legal advice and why you should take it! Despite   a   backdrop   of   serious   macro-economic   concerns   and   huge   political   uncertainty,   the   specialist   lending   sector continues   to   defy   all   expectations   and   grow   apace.   Short-term   lending   is   no   exception,   with   interest   rates   remaining at   historically   low   levels   and   a   continuous   stream   of   new   entrants   being   propelled   to   market   on   a   wave   of   cash,   as investors seek a more attractive return on their money. Increased   competition   has   driven   rates   down   to   levels   that   were   unthinkable   just   three   or   four   years   ago,   whilst loan   to   value   limits   have   increased,   despite   a   subdued   and   in   pockets   declining   property   market.   Another   indicator of   a   maturing   and   some   would   say   over-crowded   market,   is   the   increasingly   complex   nature   of   products   and   criteria being   developed.   As   lenders   innovate   to   try   and   build   market   share,   maintain   margins   and   appeal   to   a   more   diverse client base, the importance of working with a great legal team has never been greater. The   short-term   lending   sector   is   a   fast   paced   and   highly   specialised   market   and   although   similar   in   principle   to longer   term   lending,   it   clearly   requires   a   different   set   of   skills   and   expert   knowledge.   The   best   lawyers   have   a genuinely   commercial   outlook,   are   alive   to   their   lender   client’s   needs,   can   provide   creative   solutions   to   facilitate complex transactions and often work to extremely tight deadlines.
If rumours are to be believed the ASTL is on the cusp of announcing its new CEO. Whoever   steps   into   the   shoes   of   Benson   Hersch   there   can   be   little   doubt   that   they   face   a   uniquely   challenging position   to   maintain   the   relevance   of   a   trade   body   that   in   recent   years   has   struggled   to   match   the   dynamism, innovation, growth and added value offered by membership of both the NACFB and FIBA. As   we   move   into   ever   more   uncertain   macro-economic   and   political   times   the   cost   of   maintaining   ASTL   membership is   not   insignificant   and   it   seems   likely   that   both   patron   lenders   and   associates   will,   in   increasing   numbers,   be   asking the question as to what value they are getting for their sizable annual outlay? For   a   slightly   higher   annual   membership   fee   NACFB   Patrons   and   members   receive   an   extensive   list   of   benefits including   collaborative   events,   induction   courses   for   new   members,   compliance   and   regulatory   support,   discounted PI   insurance,   free   leads,   audit   visits,   data   reports,   documentation,   daily   news   briefings,   a   monthly   magazine,   a market leading expo and so much more besides.
KNIGHTSBRIDGE   REVERBERATES   TO   THE   SOUND   OF   ARAB-OWNED   SUPERCARS...   IT   MUST BE THE SEASON! As   the   days   get   shorter,   the   air   gets   chillier   and   Strictly   Coming   Dancing   gets   into   full   swing   we   know   the   noisy “Supercar    Season”    will    inevitably    give    way    to    quieter    Autumn    nights!    The    late    summer    sights    and    sounds    of Knightsbridge   and   Mayfair   are   fast   becoming   a   home   away   from   home   for   millionaire   Arab   playboys.   In   a   little   over two   decades,   and   at   a   growing   pace   in   the   last   ten   years,   the   district   has   evolved   rapidly,   swapping   many   native residents for international newcomers. The   change   has   been   so   marked   and   the   popularity   with   Gulf   Arabs   so   strong   that   Knightsbridge   is   now   commonly referred   to   by   some   as   “Little   Arabia.”   Of   course,   the   district   has   always   had   a   luxury   ambiance   thanks   to   its   high- end   department   stores,   boutique   shops   and   fine   dining   but   where   it   was   once   almost   exclusively   the   preserve   of upper-class English Socialites it is now extremely international. This   fact   is   reflected   by   the   raft   of   Arabic   cafes,   shops   and   restaurants,   that   have   opened   in   recent   years,   ensuring that the sight of shisha smoking in the West End is now incredibly familiar.
Valuing our valuers... Private   investors   and   family   offices,   hedge   funds,   challenger   banks   and   even   the   average   man   in   the   street   through peer   to   peer   platforms   have   all   fuelled   the   rapid   growth   of   the   short-term   lending   market   in   recent   years.   A   glut   of liquidity   and   increased   competition   has   seen   rates   driven   down   to   levels   that   were   unthinkable   only   a   couple   of years   ago   and   loan   to   value   (LTV)   limits   increased,   despite   the   backdrop   of   a   subdued   and,   in   places,   declining property market. Now   another   trend   is   emerging   that   brings   back   memories   of   2006/07,   that   of   streamlined   underwriting.   Welcomed by   brokers   but   less   so   by   funders,   we   are   now   starting   to   see   the   first   mainstream   lenders   eschewing   the   need   for   a valuation, particularly on selected lower loan to value cases. Prior   to   the   Credit   Crunch   and   recession   many   lenders   placed   an   increased   reliance   upon   automated   valuation models   (AVMs).   This   trend   started   at   the   lower   end   of   the   risk   curve,   typically   on   low   LTV   re-mortgages   and   further advances   and   undoubtedly   helped   ease   delays   caused   by   a   shortage   of   valuers.   In   specifically   selected   cases   where there   was   enough   comparative   data   to   yield   robust   results   AVMs   worked   well   but   as   is   typically,   the   case,   reliance upon and the use of this new technology quickly exceeded its limitations.
£75M QUOTED IN TEN DAYS... Central   Bridging   has   quoted   £75M   of   loans   in   just   over   a   week,   including   a   £28M   loan   on   a   £60M   residential property   in   Mayfair.   With   the   valuation   completed   and   the   overseas   client   having   already   flown   into   London   for legal advice, completion of this particular deal is imminent. Central’s   expertise   and   reputation   for   completing   and   managing   large   and   complex   cases   has   allowed   them   to access funding lines dedicated to the provision of some of the sectors largest ever loans. Ideally    suited    to    both    UK    and    Overseas    investors,    these    loans    can    be    secured    against    both    residential    and commercial   property   and   with   no   maximum   property   value   they   are   generating   considerable   interest   from   both offshore companies and trusts that remain keen to invest in London.  Further   loans   quoted   in   the   last   week   include   a   £22M   loan   on   a   commercial   property   in   Canary   Wharf,   £14M   against two Knightsbridge residential properties and £7M on another residential investment property in St Johns Wood. 
IT’S TIME TO SEIZE THE INITIATIVE… THE SHORT-TERM LENDING MARKET NEEDS A FOUNDATION QUALIFICATION As   we   gear   up   for   a   General   Election   which   will   pitch   the   slogans   “Let’s   Get   Brexit   Done”   against   “For   the   Many   Not The   Few”   it’s   perhaps   timely   to   remember   another   political   rallying   cry   that   first   emerged   in   the   mid   1990’s,   one   that was adopted enthusiastically by New Labour. Of   course,   this   was   “Education,   Education,   Education”   and   by   the   late   1990’s   it   was   a   slogan   that   was   being   repeated ad-nauseum!   In   truth   the   first   Blair   government   was   less   radical   in   education   than   other   areas,   maintaining   many   of the   Conservative   changes   after   they   came   to   power   in   1997.      Never   ones   to   let   the   truth   get   in   the   way   of   a   good slogan however, this phrase attained almost trademark status! Now,   nearly   20   years   on,   it’s   a   good   time   to   resurrect   this   slogan   and   apply   it   directly   to   the   short-term   lending industry,   an   industry   that’s   grown   massively   in   recent   years.   Lenders,   packagers   and   brokers   have   all   worked   hard to   raise   standards   and   in   doing   so   made   the   sector   accessible   to   literally   tens   of   thousands   of   new   customers. Having   said   this,   short-term   loans   have   their   own   considerations   and   complexities   and   there   can   be   little   doubt   that an industry qualification would raise awareness even further of the many and varied uses for short-term loans.
CENTRAL   BRIDGING   WIN   AWARD   FOR   BUSINESS   EXCELLENCE   FROM   THE   INDO-EUROPEAN BUSINESS FORUM Monday   evening   saw   the   prestigious   House   of   Lords   complex   at   the   Houses   of   Parliament   play   host   to   the   Indo- European Business Forum (IEBF) Annual Summit. Central   Bridging,   with   their   close   links   to   India,   were   among   a   group   of   achievers   to   be   recognised   for   excellence   in their   respective   fields   and   were   honoured   to   collect   an   award   from   former   Indian   Cricket   Captain,   Kapil   Dev   and House of Lords peer Baroness Sandy Verma. Other   winners   included   Manish   Tiwari,   the   founder   of   UK-based   ethnic   media   agency   ‘Here   and   Now   365’   for   his contribution    to    the    media    industry    and    the    top    Indian    Film    Star,    Sunil    Shetty,    who    flew    in    from    Baku,    to    be recognised for his contribution to Indian Art & Culture. The   event   also   marked   the   launch   of   a   report   entitled   “India:   A   5   Trillion   Dollar   Economy   by   2024-25”   complied   by IEBF    India    lead,    Sunil    Gupta.    Gupta    stated    that    despite    the    recent    trend    of    global    slowdown    India    is    “moving forwards towards achieving its dream target with the help of various factors.
CORBYN IS A UNIFYING FORCE... - THE WHOLE BRIDGING INDUSTRY IS AGAINST HIM! Admittedly   that’s   a   sweeping   statement   to   make   but   it’s   based   upon   my   own   extensive   “public   bar”   canvassing   of industry   opinion   since   the   Election   was   announced!   I’ve   yet   to   speak   to   a   single   person   who   has   said   they   will   be voting Labour on the 12th December. Given   the   entrepreneurial   nature   of   our   industry   it   would   be   a   surprise   if   the   Conservatives   weren’t   the   party   of choice   for   many   but   the   lack   of   even   a   single   voice   in   favour   of   Labour   shows   just   how   far   they   have   abrogated   the middle   ground   of   British   politics.   Today’s   Labour   Party   is   even   more   extreme   than   that   of   Michael   Foot   in   the   early 1980’s, a fact most eloquently reflected by their 105 page wish list, otherwise known as a manifesto. It’s   manifestly   obvious   that   a   document   as   rammed   with   expensive   freebies   as   this   isn’t   the   programme   of   a   party that   believes   it   will   ever   have   to   implement   this   programme   in   government.   By   contrast   the   Labour   manifesto   in 1997   made   modest   promises   precisely   because   Tony   Blair   expected   to   win   and   therefore   to   have   to   deliver   on   these promises.

BESPOKE BRIDGING LOAN

& SHORT TERM LENDER

Central Bridging, 34 Queen Anne Street, London, W1G 8HE Tel: +44 (0)3332 400 506  Email: enquiry@centralbridging.co.uk Web: www.centralbridging.co.uk Central Bridging is a trading style of Central Bridging Loans Ltd. Registered in England & Wales | Company Registration Number 07728274. Central Bridging is not regulated by the Financial Conduct Authority (FCA). All loans arranged by Central Bridging are non regulated contracts as defined under The Financial Services and Markets (Regulated Activities) Order 2001 and the Financial Service and Markets Mortgage Credit Directive Order 2015. © Copyright Central Bridging Loans Limited Privacy Policy

PRESS RELEASES

ASTL Logo NACFB Logo London Chamber of Commerce and Industry Logo
BRIDGING    INDUSTRY    REACTS TO NEW PM Boris   Johnson   has   been   appointed   as Prime    Minister    following    a    vote    from members of the Conservative party. The   ballot   was   taken   by   159,320   Tory members    and    Johnson    will    be    taking office   on   Wednesday   24   July.   Johnson took     92,153     votes,     beating     Jeremy Hunt’s 46,656. Brian       West,       director       of       Central Bridging,    added:    “I’ve    always    had    my concerns   that   the   new   Prime   Minister is   rather   too   self-interested   and   lacks any        really        deep-rooted        political conviction. “I   hope   he   proves   me   wrong   and   that lurking     somewhere     underneath     that bluff   exterior   and   unkempt   ‘barnet’   is   a true statesman. “That is what we sorely need.”
BRIDGING INDUSTRY REACTS TO NEW PM
TO   VALUE   OR   NOT   TO   VALUE?   - THAT IS THE QUESTION. Anyone     involved     in     the     short-term lending   industry   attending   last   month’s NACFB   Expo   Event   couldn’t   have   failed to   notice   the   sheer   volume   of   bridging and   development   lenders   exhibiting.   At a    record-breaking    show    with    all    138 stands   sold   out   it   was   noticeable   that nearly   half   of   these   and   a   much   bigger percentage    of    the    most    lavish    stands belonged   to   bridging   and   development lenders. On   face   value   this   can   be   viewed   as   a barometer   of   the   short-term   industry’s rude   health   but   look   beyond   the   lavish facades    and    large    marketing    budgets and        maybe        it’s        just        another manifestation   of   an   ongoing   battle   to either   gain   or   maintain   market   share? In   crude   terms   it   could   be   indicative   of a      fight      to      survive      in      an      ultra- competitive       market       that’s       already claimed its first high profile victims. This   battle   has   seen   rates   driven   down to   levels   that   were   unthinkable   only   a couple   of   years   ago   and   loan   to   value (LTV)     limits     increased,     despite     the backdrop    of    a    very    subdued    and,    in places,   declining   property   market.   Now another   trend   is   emerging   that   brings back     memories     of     2006/07,     that     of streamlined     underwriting.     Welcomed by   brokers   but   less   so   by   funders,   we are     now     starting     to     see     the     first mainstream      lenders      eschewing      the need    for    a    valuation,    particularly    on selected lower loan to value cases.
TO VALUE OR NOT TO VALUE? - THAT IS THE QUESTION.
BACKING A WINNER. - GOOD RESEARCH IS KEY. With   the   recent,   inevitable   collapse   into administration      of      the      peer-to-peer platform    Lendy    around    22,000    retail investors   are   now   left   wondering   how much   of   the   collective   £165M   they   had invested   at   the   time   of   closure   are   they likely   to   get   back?   For   2008   and   queues outside    Northern    Rock    branches    see now   the   recently   formed   Lendy   Action Group    (LAG)    on    the    internet.    As    the words    from    the    1997    hit    by    Shirley Bassey   and   the   Propellor   Heads   remind us    “It’s    all    just    a    little    bit    of    history repeating.” The   sad   fact   is   that   it   really   wasn’t   that hard   to   foresee   these   problems.   It’s   a great    shame    that    only    now    are    the founders   of   LAG   using   the   power   of   the internet   to   gain   a   collective   voice   when a   little   bit   of   time   spent   researching   a lender     that     was     offering     12%     PA returns   and   lavishly   sponsoring   Cowes Week     might     have     enabled     them     to better assess the risk they were taking. In    a    market    where    some    lenders    are now   selling   deals   at   less   than   half   the rate   of   return   Lendy   were   offering   the maths    simply    never    added    up.    Never has   the   old   saying   “If   something   seems too   good   to   be   true   it   probably   is”   been more    relevant.    If    I    were    to    walk    into William   Hill   this   afternoon,   bet   a   £100 on   a   horse   that   I’ve   done   absolutely   no research   on   just   because   it’s   odds   are 12-1    and    lose,    would    I    be    justified    in blaming anyone else?
BACKING A WINNER. - GOOD RESEARCH IS KEY.
BRIDGING INNOVATION - DRIVING THE INDUSTRY DESPITE THE POLITICIANS Just    a    few    years    ago    Belgium    had    a period    of    nearly    two    years    without    a government,    a    period    which    saw    the Belgian    economy    outpacing    growth    in both    neighbouring    Germany    and    the wider    Euro    zone.    Perhaps    there    is    a parallel    to    be    drawn    here    with    the current   Brexit   uncertainty   and   political paralysis    in    Westminster;    after    all    the UK   economy   outperformed   Italy,   France and Germany last year. It     seems     that     whilst     our     politicians engage    in    a    pro-longed    spell    of    self- induced   navel   gazing   the   rest   of   the   UK population      just      cracks      on      without undue          interference          from          the inhabitants   of   Westminster   who,   in   so many       cases,       have       no       hands-on business             experience             anyway. Consequently,    the    economy,    including the    specialist    finance    sector    and    our own   little   corner   of   it,   bridge   lending, continue    to    defy    all    expectations    and thrive. Bridging   finance   is   a   maturing   market that’s   evolving   and   developing   to   meet the    needs    of    an    increasingly    diverse range     of     individuals     and     businesses seeking   a   fast   and   effective   solution   to their   many   and   varied   financial   needs.     Whilst       interest       rates       remain       at historically   low   levels   new   lenders   have been   propelled   to   market   on   a   wave   of liquidity   from   funders   seeking   a   more attractive return on their money.
BRIDGING INNOVATION - DRIVING THE INDUSTRY DESPITE THE POLITICIANS
“THERESA MAY - FIRST PERSON EVER TO PAY FULL PRICE FOR A SOFA AT DFS.” This    was    the    headline    above    a    clever Whatsapp    picture    one    of    my    mates sent   me   recently.   It   showed   our   much- maligned    PM    leaving    a    DFS    Furniture Store   sporting   a   very   sickly   grin.   Now   in terms   of   a   comment   on   her   negotiating prowess     it     certainly     had     merit     but, despite       myself,       I       couldn’t       resist mounting       what,       in       some       small measure,    amounted    to    a    defence    of poor old Theresa. Whilst       acknowledging       Mrs       May’s general       ineptitude       I       nonetheless pointed   out   that   it’s   tough   to   negotiate a   good   discount   on   a   new   sofa   if   the rest    of    the    folks    back    home    have    let DFS    know    in    advance    that    she    will definitely    be    buying    one!    My    friends mildly    amusing    picture    was    in    fact    a sad     indictment     not     only     our     Prime Minister   but   of   the   vast   majority   of   our MPs. As   if   wasn’t   bad   enough   watching   the government   failing   to   properly   prepare for   a   ‘no   deal’   and   making   a   complete hash    of    the    negotiations    we’ve    then had     to     watch     as     parliament     finally handed    the    initiative    lock,    stock    and barrel   to   Brussels   by   failing   to   agree   on pretty   much   anything   other   than   ruling out        a        ‘no        deal’        under        any circumstances!       Monsieur’s       Barnier, Junckers   and   Tusk   could   barely   contain their glee!
“THERESA MAY - FIRST PERSON EVER TO PAY FULL PRICE FOR A SOFA AT DFS.”
BARGAIN HUNT - UNCERTAINTY GIVES RISE TO OPPORTUNITY Last       month       this       column       drew inspiration   from   the   long   running   BBC television    show,    Homes    Under    the Hammer,     to     explain     how     property related    programmes    have    played    an important   role   inspiring   a   generation of   property   investors   and   developers. In     what     may     develop     into     a     ‘TV inspired’      trend      this      latest      article unashamedly   steals   its   headline   from another    popular    BBC    show,    Bargain Hunt! In    February,    Sonal    Thakrar,    partner and    Head    of    Residential    Property    at leading   London   law   firm   Mishcon   de Reya    stated    that;    “Brexit    is    creating huge     uncertainty,     but     it’s     also     a fantastic    chance    for    those    who    are savvy     and     brave     enough     to     buy something   to   keep.”   She   was   talking about     a     steady     flow     of     high-end London     property     transactions     that Mishcon    are    handling    where    buyers are        securing        very        substantial discounts on the original asking price. Long    before    the    term    Brexit    came into    the    public’s    consciousness,    the London                    market                    was disproportionately    impacted    by    the stamp    duty    changes    introduced    by then     Chancellor     of     the     Exchequer, George   Osbourne   in   December   2014. He   followed   these   up   by   introducing   a raft     of     additional     property     taxes culminating,    in    early    2016,    with    an additional   three   per   cent   levy   on   top of      stamp      duty      charges      for      the purchase   of   second   homes.   In   doing so      he      further      compounded      the downward      momentum      in      prime London house prices.
BARGIN HUNT - UNCERTAINTY GIVES RISE TO OPPORTUNITY - Brian West, Director, Central Bridging
FORMING A POPULAR FRONT As   we   move   into   a   new   year   it’s   fair   to say    that    bridging    has    never    been    so popular.    Those    that    predicted    2018, with     all     its     economic     and     political uncertainty,       would       see       the       UK specialist     lending     market     in     decline have   proved   to   be   somewhat   wide   of the    mark.    Indeed,    from    beginning    to end   the   year   saw   a   steady   flow   of   new short-term lenders being launched. With      interest      rates      remaining      at historically     low     levels     new     entrants were   propelled   to   market   on   a   wave   of cash   by   capital   holders   seeking   a   more attractive   return   on   their   money.   Third Party   funders   in   the   shape   of   private investors     and     family     offices,     hedge funds,   challenger   banks   and   even   the average   man   in   the   street   through   peer to    peer    lending    platforms    all    fuelled the    continued    growth    of    the    market both     in     terms     of     the     volumes     of business   being   written   and   the   sheer number and diversity of lenders. By        the        years        end        increased competition   had   driven   rates   down   to levels   that   were   unthinkable   just   three or   four   years   ago   whilst   loan   to   value limits      had      increased      despite      the backdrop   of   a   very   subdued   and   even in pockets declining property market.
FORMING A POPULAR FRONT
KYC,   AML,   DD…   Has   the   world gone acronym mad? Steadily      increasing      loan      to      values despite   a   static   and   in   places   declining property    market,    a    seemingly    endless rate    war    squeezing    margins,    a    dearth of   experienced   industry   personnel   and a   relaxation   of   underwriting   standards begin      presented      as      service      level enhancements.            With            Industry standards      coming      under      pressure against    a    backdrop    of    Brexit    induced political       paralysis,       macro-economic uncertainly      and      of      course      recent specialist     lender     collapses     is     it     any wonder    that    some    commentators    are now   questioning   whether   the   resilience of    the    short    -term    lending    market    is perhaps being pushed a little to far? There    are    certainly    many    challenges facing   the   owners   of   both   established lending    platforms    and    newcomers    to the    market    but    perhaps    the    biggest single    worry,    the    one    that's    still    most likely   to   cause   sleepless   nights,   is   the perennial   threat   summed   up   in   a   single five   letter   word,   that   of   'fraud'.   It's   not hard    to    see    why    an    industry    that    is predicated    on    speed    of    turnaround, where    lenders    regularly    trumpet    the fact   that   they've   completed   a   complex deal in a matter of days.
Getting   the   best   legal   advice and why you should take it! Despite   a   backdrop   of   serious   macro- economic    concerns    and    huge    political uncertainty,      the      specialist      lending sector        continues        to        defy        all expectations    and    grow    apace.    Short- term     lending     is     no     exception,     with interest   rates   remaining   at   historically low   levels   and   a   continuous   stream   of new   entrants   being   propelled   to   market on   a   wave   of   cash,   as   investors   seek   a more attractive return on their money. Increased   competition   has   driven   rates down    to    levels    that    were    unthinkable just   three   or   four   years   ago,   whilst   loan to   value   limits   have   increased,   despite a    subdued    and    in    pockets    declining property   market.   Another   indicator   of   a maturing    and    some    would    say    over- crowded     market,     is     the     increasingly complex   nature   of   products   and   criteria being    developed.    As    lenders    innovate to   try   and   build   market   share,   maintain margins   and   appeal   to   a   more   diverse client   base,   the   importance   of   working with   a   great   legal   team   has   never   been greater. The   short-term   lending   sector   is   a   fast paced    and    highly    specialised    market and    although    similar    in    principle    to longer   term   lending,   it   clearly   requires a     different     set     of     skills     and     expert knowledge.    The    best    lawyers    have    a genuinely   commercial   outlook,   are   alive to     their     lender     client’s     needs,     can provide    creative    solutions    to    facilitate complex    transactions    and    often    work to extremely tight deadlines.
If   rumours   are   to   be   believed the    ASTL    is    on    the    cusp    of announcing its new CEO. Whoever   steps   into   the   shoes   of   Benson Hersch    there    can    be    little    doubt    that they   face   a   uniquely   challenging   position to    maintain    the    relevance    of    a    trade body   that   in   recent   years   has   struggled to     match     the     dynamism,     innovation, growth     and     added     value     offered     by membership    of    both    the    NACFB    and FIBA. As    we    move    into    ever    more    uncertain macro-economic   and   political   times   the cost   of   maintaining   ASTL   membership   is not   insignificant   and   it   seems   likely   that both   patron   lenders   and   associates   will, in    increasing    numbers,    be    asking    the question     as     to     what     value     they     are getting for their sizable annual outlay? For   a   slightly   higher   annual   membership fee   NACFB   Patrons   and   members   receive an    extensive    list    of    benefits    including collaborative    events,    induction    courses for      new      members,      compliance      and regulatory       support,       discounted       PI insurance,    free    leads,    audit    visits,    data reports,      documentation,      daily      news briefings,   a   monthly   magazine,   a   market leading expo and so much more besides.
K    N    I    G    H    T    S    B    R    I    D    G    E    REVERBERATES   TO   THE   SOUND OF   ARAB-OWNED   SUPERCARS... IT MUST BE THE SEASON! As    the    days    get    shorter,    the    air    gets chillier   and   Strictly   Coming   Dancing   gets into     full     swing     we     know     the     noisy “Supercar     Season”     will     inevitably     give way   to   quieter   Autumn   nights!   The   late summer        sights        and        sounds        of Knightsbridge      and      Mayfair      are      fast becoming   a   home   away   from   home   for millionaire   Arab   playboys.   In   a   little   over two   decades,   and   at   a   growing   pace   in the     last     ten     years,     the     district     has evolved    rapidly,    swapping    many    native residents for international newcomers. The   change   has   been   so   marked   and   the popularity   with   Gulf   Arabs   so   strong   that Knightsbridge   is   now   commonly   referred to   by   some   as   “Little   Arabia.”   Of   course, the    district    has    always    had    a    luxury ambiance       thanks       to       its       high-end department   stores,   boutique   shops   and fine   dining   but   where   it   was   once   almost exclusively    the    preserve    of    upper-class English    Socialites    it    is    now    extremely international. This   fact   is   reflected   by   the   raft   of   Arabic cafes,   shops   and   restaurants,   that   have opened    in    recent    years,    ensuring    that the   sight   of   shisha   smoking   in   the   West End is now incredibly familiar.
Valuing our valuers... Private     investors     and     family     offices, hedge   funds,   challenger   banks   and   even the    average    man    in    the    street    through peer   to   peer   platforms   have   all   fuelled the     rapid     growth     of     the     short-term lending   market   in   recent   years.   A   glut   of liquidity   and   increased   competition   has seen    rates    driven    down    to    levels    that were   unthinkable   only   a   couple   of   years ago     and     loan     to     value     (LTV)     limits increased,    despite    the    backdrop    of    a subdued      and,      in      places,      declining property market. Now     another     trend     is     emerging     that brings   back   memories   of   2006/07,   that   of streamlined   underwriting.   Welcomed   by brokers   but   less   so   by   funders,   we   are now   starting   to   see   the   first   mainstream lenders      eschewing      the      need      for      a valuation,   particularly   on   selected   lower loan to value cases. Prior   to   the   Credit   Crunch   and   recession many      lenders      placed      an      increased reliance      upon      automated      valuation models   (AVMs).   This   trend   started   at   the lower   end   of   the   risk   curve,   typically   on low      LTV      re-mortgages      and      further advances   and   undoubtedly   helped   ease delays   caused   by   a   shortage   of   valuers. In   specifically   selected   cases   where   there was    enough    comparative    data    to    yield robust   results   AVMs   worked   well   but   as is   typically,   the   case,   reliance   upon   and the    use    of    this    new    technology    quickly exceeded its limitations.
£75M QUOTED IN TEN DAYS... Central    Bridging    has    quoted    £75M    of loans   in   just   over   a   week,   including   a £28M     loan     on     a     £60M     residential property   in   Mayfair.   With   the   valuation completed     and     the     overseas     client having    already    flown    into    London    for legal       advice,       completion       of       this particular deal is imminent. Central’s    expertise    and    reputation    for completing    and    managing    large    and complex    cases    has    allowed    them    to access    funding    lines    dedicated    to    the provision   of   some   of   the   sectors   largest ever loans. Ideally   suited   to   both   UK   and   Overseas investors,   these   loans   can   be   secured against          both          residential          and commercial      property      and      with      no maximum     property     value     they     are generating    considerable    interest    from both    offshore    companies    and    trusts that remain keen to invest in London.  Further   loans   quoted   in   the   last   week include   a   £22M   loan   on   a   commercial property      in      Canary      Wharf,      £14M against    two    Knightsbridge    residential properties      and      £7M      on      another residential    investment    property    in    St Johns Wood. 
IT’S      TIME      TO      SEIZE      THE INITIATIVE… THE      SHORT-TERM      LENDING MARKET               NEEDS               A FOUNDATION QUALIFICATION As   we   gear   up   for   a   General   Election which   will   pitch   the   slogans   “Let’s   Get Brexit   Done”   against   “For   the   Many   Not The      Few”      it’s      perhaps      timely      to remember   another   political   rallying   cry that    first    emerged    in    the    mid    1990’s, one   that   was   adopted   enthusiastically by New Labour. Of       course,       this       was       “Education, Education,   Education”   and   by   the   late 1990’s   it   was   a   slogan   that   was   being repeated   ad-nauseum!   In   truth   the   first Blair    government    was    less    radical    in education          than          other          areas, maintaining   many   of   the   Conservative changes   after   they   came   to   power   in 1997.      Never   ones   to   let   the   truth   get in   the   way   of   a   good   slogan   however, this   phrase   attained   almost   trademark status! Now,    nearly    20    years    on,    it’s    a    good time   to   resurrect   this   slogan   and   apply it    directly    to    the    short-term    lending industry,     an     industry     that’s     grown massively     in     recent     years.     Lenders, packagers   and   brokers   have   all   worked hard   to   raise   standards   and   in   doing   so made   the   sector   accessible   to   literally tens   of   thousands   of   new   customers. Having   said   this,   short-term   loans   have their         own         considerations         and complexities    and    there    can    be    little doubt    that    an    industry    qualification would   raise   awareness   even   further   of the    many    and    varied    uses    for    short- term loans.
CENTRAL        BRIDGING        WIN AWARD           FOR           BUSINESS EXCELLENCE   FROM   THE   INDO- EUROPEAN BUSINESS FORUM Monday    evening    saw    the    prestigious House   of   Lords   complex   at   the   Houses of    Parliament    play    host    to    the    Indo- European       Business       Forum       (IEBF) Annual Summit. Central   Bridging,   with   their   close   links to     India,     were     among     a     group     of achievers       to       be       recognised       for excellence   in   their   respective   fields   and were    honoured    to    collect    an    award from     former     Indian     Cricket     Captain, Kapil    Dev    and    House    of    Lords    peer Baroness Sandy Verma. Other   winners   included   Manish   Tiwari, the   founder   of   UK-based   ethnic   media agency    ‘Here    and    Now    365’    for    his contribution   to   the   media   industry   and the   top   Indian   Film   Star,   Sunil   Shetty, who      flew      in      from      Baku,      to      be recognised     for     his     contribution     to Indian Art & Culture. The   event   also   marked   the   launch   of   a report   entitled   “India:   A   5   Trillion   Dollar Economy   by   2024-25”   complied   by   IEBF India    lead,    Sunil    Gupta.    Gupta    stated that   despite   the   recent   trend   of   global slowdown    India    is    “moving    forwards towards   achieving   its   dream   target   with the help of various factors.
CORBYN IS A UNIFYING FORCE... - THE WHOLE BRIDGING INDUSTRY IS AGAINST HIM! Admittedly   that’s   a   sweeping   statement to    make    but    it’s    based    upon    my    own extensive    “public    bar”    canvassing    of industry   opinion   since   the   Election   was announced!   I’ve   yet   to   speak   to   a   single person   who   has   said   they   will   be   voting Labour on the 12th December. Given   the   entrepreneurial   nature   of   our industry   it   would   be   a   surprise   if   the Conservatives     weren’t     the     party     of choice   for   many   but   the   lack   of   even   a single   voice   in   favour   of   Labour   shows just   how   far   they   have   abrogated   the middle      ground      of      British      politics. Today’s     Labour     Party     is     even     more extreme    than    that    of    Michael    Foot    in the   early   1980’s,   a   fact   most   eloquently reflected    by    their    105    page    wish    list, otherwise known as a manifesto. It’s   manifestly   obvious   that   a   document as   rammed   with   expensive   freebies   as this   isn’t   the   programme   of   a   party   that believes   it   will   ever   have   to   implement this     programme     in     government.     By contrast   the   Labour   manifesto   in   1997 made       modest       promises       precisely because   Tony   Blair   expected   to   win   and therefore    to    have    to    deliver    on    these promises.
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