Houses sell for more during the school holidays!

A recent survey by online estate agent eMoov has uncovered an interesting trend in house prices identifying that houses sell for more during the school holidays! With an increase in prices of more than £12,000 on average! Their data uncovered that average selling prices for properties during term time were £296,100 and £308,150 during the holidays.

Russell Quirk, founder and chief executive of eMoov.co.uk, said: “As we wave goodbye to summer and finally see the kids return to school many will pause for a breath and a well-deserved cup of tea.”

The autumn half term is the best time to sell, as most customers want their transactions completed in good time before Christmas.

In other news, re-mortgage activity was strong in June of 2017, whilst the housing market growth has slowed down nationally, and there are a reduced number of new purchases taking place with a reported £20bn of lending taking place in July, against a £21.5bn in June 2017.

Remortgages were up to £7.3bn up from £6.6bn of remortgages in June 2017.

This may be a sign that house owners are locking in on low interest rates now, as opposed to sticking on variable rates.

The view from the market is that things are not growing as quickly as previously, but the market has not yet stalled, indicating that there is still a further period of growth in select areas before the market drips off.

Hertfordshire Business Funding specialise in Buy-to-Let, Commercial mortgages, bridging finance, development finance and mezzanine funding contact us today to discuss your funding requirements.

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/houses-sell-for-more-during-the-school-holidays/
via https://www.hertfordshirebusinessfunding.com

What Is Mezzanine Finance?

Mezzanine Finance for property is a type of funding which will typically sit behind the senior debt or first charge lender as it is often called. The mezzanine funding will enable a property developer to complete a development opportunity whilst having to put in less of his own money than would be required without the mezzanine financing. Here we will discuss What Is Mezzanine Finance?

Mezzanine finance enables a developer to complete  development, albeit the costs associated with mezzanine finance are typically more expensive than normal senior debt.

Terms Available for Mezzanine Finance

Mezzanine finance lenders will offer a variety of different terms depending on the experience of the developer, the margin on cost which the development opportunity has inbuilt and the area which the development is due to take place.

Most mezz lenders will offer a second charge facility behind the first charge and rates are available from 0.75%-2% per month from different lenders.

In terms of loan to cost (LTC) on the development, again this will vary depending on the lender, but Hertfordshire Business Funding have got facilities agreed at up to 90% loan to value (LTV) and 100% of loan to cost (LTC).

Most developers will look at mezzanine financing costs in conjunction with their senior debt, and will normally consider these facilities as a “blended” rate of finance.

For example if the senior debt facilities were priced at 4.5%, for 60% LTV, and the mezz was priced at 12% for 35% LTV and 100% LTC, then the blended rate may be between 7-9% depending on the proportionate sizes of the facilities.

Mezzanine Funding Underwriting

There are an increasing number of development finance funding organisations with increasing competition for facilities. The underwriting process is normally quite straightforwards with the lender evaluating the developer and also the project, making sure that there is suitable headroom in the opportunity.

Typically Mezzanine Finance will be available on a phased release basis, and so will be available once the developer and his team have achieved certain milestones as part of the development process.

Hertfordshire Business Funding specialise in complex and technical funding with a particular focus on property development funding. If you are seeking funding for your current development projects it would be an absolute pleasure to assist you with your funding requirements. Contact us today and we would be pleased to assist.

 

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/what-is-mezzanine-finance/
via https://www.hertfordshirebusinessfunding.com

Loans To Buy Land

Hertfordshire Business Funding specialise in providing a combination of debt and equity to companies. Here we will discuss the potential options for loans to buy land.

There are a number of different financing options available for property developers who are seeking to buy land, these include:

Bridging Loans – these are short term loans which can be used to buy land and other buildings. There are an increasing number of lenders in this marketplace and loan to values’ are becoming increasingly competitive. Therefore you may be able to achieve up to 75/80% loan to value. The benefits of bridging lending is that they are normally pretty quick, and can often get facilities completed within 7 days. The negatives are that bridging facilities can be expensive, with rates starting at circa 0.4% per month, up to 2% per month. Bridging loans start at 3 months duration and it is possible to get an extended term to around 24 months. The bridging lender will want a clearly identified exit strategy to ensure that they are going to get repaid. Bridging loans are available from £250k .

Commercial Mortgages – are longer term facilities which are available from both high street and challenger banks. These will typically have a longer term facility with a minimum of 12 months, up to 30 years. The application and approval process for a commercial mortgage facility will normally take 2 weeks plus, more realistically 1 month to get implemented. Rates for commercial mortgages are normally on a variable basis and it is possible to achieve 3.5% above LIBOR (London Interbank Offered Rate). Commercial mortgages will typically have lower LTV’s than bridging loans, and will normally offer up to 65% LTV.

Development Finance – In some instances it is possible to get one lender to provide a multiple facility loan. This will typically start off as a bridging loan, once planning consent has been achieved then the lender may in some instances then provide a development finance facility on top, to enable a developer to build out a scheme. Each element of the loan will be underwritten by the lender on it’s merits, and will have variable interest rates.

If you are interested in securing a loan to buy land, Hertfordshire Business Funding would be delighted to assist. We work with a number of the UK’s leading property funding houses, development finance and bridging finance facilities. Contact us today for a free no obligation initial consultation.

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/loans-to-buy-land/
via https://www.hertfordshirebusinessfunding.com

What Is Property Development Finance?

Hertfordshire Business Funding are a funding broker with strong relationships with a wide range of lenders across the UK and overseas. Here we will be discussing; What Is Property Development Finance?

Property Development Finance is a type of funding typically for larger scale projects with funds available for both new builds and rennovations. Hertfordshire Business Funding work with a wide range of development finance providers and in particular can provide property development finance facilities for residential developments, commercial developments and mixed-use developments.

Property Development Finance is normally available for medium and larger schemes, with typically facilities available from £250k upwards. For smaller renovation projects, renovation financing is available, along with bridging finance. If you are interested in this area please contact us via our website.

How Much Can I Borrow With Development Finance?

There are a wide range of different funders which provide development finance. Each lender will have different terms, and a general rule of thumb is that the more that you borrow, the higher the cost.

Hertfordshire Business Funding specialise in securing funding facilities for more complex, and higher Loan To Value (LTV) development finance. We are able to achieve up to 75% LTV and 100% Loan To Cost (LTC) in certain circumstances for experienced developers with sites which have high margins (30% margin on cost ).

Property Development Finance Facilities are typically available from £250k , up to £30m or above in certain circumstances.

Development Finance is normally drawn down in phases, so there will be an initial phase which will pay for ground-works, then phases when other agreed milestones are completed. Typically a surveyor will be appointed to confirm that the milestones have been achieved.

Property Development Finance Terms

Property Development finance is typically available from 6-24 months.

If you are interested in securing property development finance in Hertfordshire for a property development that you are working on, please feel free to contact a member of our team today. We would be very pleased to assist.

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/what-is-property-development-finance/
via https://www.hertfordshirebusinessfunding.com

What Is Bridging Finance?

Hertfordshire Business Funding provide advice and information on a wide range of financial products and services, here we discuss What Is Bridging Finance?

Bridging finance is typically a short term financial product which is used to solve a short term finance issue and is often used to acquire buildings or land.

Most borrowers will not want to use bridging finance for the medium or long term as the rates tend to be more expensive than commercial mortgages, with a typical rate of between 0.45-1.5% per month, combined with a 1% entry and exit fee.

Bridging finance is often used by property developers when they need to move quickly to secure a property.

Loan to values (the percentage of purchase costs) which bridging lenders will provide do vary, but will typically be between 65-75% Loan To Value (LTV).

Bridging Finance has significantly increased in popularity in the past few years, with a significant number of challenger banks and peer-to-peer lending platforms entering the marketplace. This could be good for the property markets in a downturn as private capital may potentially be more resilient than institutional money where banks will change their underwriting quite quickly.

Default penalties with bridging finance can be significant, therefore it is extremely important to understand how you are going to exit the bridging facility.

Underwriting for Bridging Lending

The underwriting for bridging facilities is normally relatively straightforwards, the lender will want to understand the purchase price and proposed loan to value, then they will instruct a valuation if the loan to value meets their lending requirements.

Most importantly as described above the lender will want the borrower to have a pre-identified exit strategy, so this will normally be a refinance from a high street or challenger lender.

If you are looking for bridging finance in Hertfordshire, or have any questions we would be very pleased to assist. Please contact us using our details on the website. We have a broad panel of bridging lenders and are able to achieve high LTV’s.

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/what-is-bridging-finance/
via https://www.hertfordshirebusinessfunding.com

Buy To Let Yields Shrink

Buy-to-let yields shrink according to the latest Your-Move index. There are a number of factors which are impacting returns to buy-to-let investors including increased stamp duty tax on the purchase of second properties, increased taxation on property related income and lack of rental growth against generally increased housing prices.

MortgageIntroducer reports:

Typical yields now stand at 4.9%, with the best being in the North East, (5.2%) North West (5.0%) and Wales (4.7%) and the worst in London, (3.2%) the South West (3.3%) and the South East (3.4%).

This is despite UK rents rising year-on-year – as they increased by 4.3% in Wales, 3.6% in the South East and 3.3% in the East of England.

Original article available here: http://www.mortgageintroducer.com/buy-let-yields-shrink-year-year/#.WakefNOGNo4

In addition to the above reasons, lenders are taking an increasingly firm line on buy-to-let with most high street banks increasing their interest cover to 145% from traditionally 125%, further signs that lenders are bracing themselves for increased pressure from the sector, and potentially a further indicator that the market believes that there will be a price adjustment in the next 12-18 months.

There are encouraging signs for buy-to-let investors in the North-West of the UK, and the North-East, however, the areas which have traditionally been dominant in terms of leading the growth have remained fairly stagnant or are experiencing reductions.

Buy-to-let investors have increasingly found themselves under pressure, with less availability of debt facilities from the cheaper high street banks and more restrictive terms when lending is agreed.

Matt Lenzie Director at Hertfordshire Business Funding said; “The government has attacked buy-to-let investors from a number of angles, unfortunately these attacks are beginning to impact returns which investors are experiencing.

The tax changes to the treatment of interest charges being deductible against income will inevitably begin to bite with investors with low yields being impacted first. This will lead to some investors finding themselves with negative yields.”

Hertfordshire Business Funding specialise in Buy-To-Let mortgages, we work with a wide range of commercial mortgage providers, and are a specialist commercial mortgage broker, contact us today to book a free initial consultation with a member of our team.

 

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/buy-to-let-yields-shrink/
via https://www.hertfordshirebusinessfunding.com