Bridging & Commercial held a virtual roundtable in partnership with Lendhub, in which a variety of quirks relating to bridging and development loan facilities were discussed.
The live webinar — which took place on 3rd November and was moderated by Medianett’s managing director, Caron Schreuder — welcomed Lendhub chief commercial officer.
Asim Shirwani, and business development manager Ashley Kendall, as well as brokers Shazad Ahmed, property finance specialist at GPS Financial; Kim McGinley, managing director at VIBE Specialist Finance; and Joe Lane, director at Mortgage Lane. Ben Hubbard, director at asset manager BridgeShield, was also part of the panel.
Ashley provided a rundown of several borrower types with whom Lendhub is doing specialist business, and what their unique requirements are. They include those with non-standard circumstances and income; first- and second-time developers seeking to take on more complex projects; and foreign nationals with no property footprint in the UK. According to Ashley, this latter customer profile is on the rise.
“We are seeing more and more investment from overseas [of this kind],” he explained, highlighting that the process of documentation — including AML and KYC checks — needs to be carefully considered for these borrowers. “Meeting them [virtually] is something that we have started embedding in our process.”
He suggested that having a UK solicitor that can adequately translate and explain the terms of the agreement is also vital.
Joe agreed that foreign nationals without existing property investment in the UK can struggle to buy . He noted that, if the funding is available for a mortgage of this type, it can be “very expensive” for these borrowers. “A bridge can be a great experience vehicle.”
He added that these borrowers frequently have complex investment strategies, such as HMOs, commercial property or serviced accommodation and, initiating these plans with a bridging lender enables the client to establish experience that can later be demonstrated to a mortgage lender for refinancing purposes.
Asim detailed that, regardless of where the borrower is domiciled, Lendhub will underwrite the deal as it usually does, and then pick out the areas that need further attention. “We are seeing very few offshore structures now, compared with five years ago . The regulation and cost involved in setting up an entity of this type outweighs anything you’d get out of it.”
He shares that those structures tend to be much more straightforward now, with the only element outside of the grid being the individual themself.
Picking up on Joe’s point about refinancing prospects, Asim confirms that exits will need to be confirmed at the outset, given that the appetite and costs of an onward facility may be more difficult than for a domestic borrower.