BestAdvice fires the questions at Marios Theophanous
BestAdvice fires the questions at Marios Theophanous, Credit Manager at London Credit.
BestAdvice (BA): The bridging finance sector is a crowded market. As a lender, how do you try and stand out from the crowd?
Marios Theophanous (MT): You’re right, there are certainly a lot of lenders operating in the bridging market at the present time! However, at London Credit, we have been lending for nearly 15 years and as a consequence, have become a trusted brand – one which has consistent and reliable funding and one that will always deliver on its promises. This is not the case for many of our competitors.
As long as brokers submit applications on behalf of their clients that are well thought out and have a robust exit strategy, we will be interested in doing business.
Of course, we don’t rest on our laurels and are always looking at ways of improving our products and service; no one has a right to continually receive applications from brokers.
BA: Earlier in the year you launched ‘Best 4 U’ promotion. How does it work and what was the thinking behind it?
MT: Put simply, it allows brokers to choose between one of three offers that would best suit their clients. They can choose between a 100% refund on legal or valuation fees up to a maximum amount of £5,000 per loan, or a 10% discount on the interest rate.
When we launched the offer it was available on residential loans up to 70% LTV and a maximum loan size of £2m, where the legal undertaking is paid by 1st June 2024.
It was very well received and so we subsequently extended it across our commercial and semi-commercial loans.
Our thinking was that it could help ease the financial burden on borrowers and provide brokers with the flexibility to structure the most suitable solution for their clients. By being able to choose a promotion on either legal fees, valuation fees or rate, brokers are empowered to pick the most beneficial offer based on the specifics of the loan and the client’s individual circumstances.
BA: You mentioned a desire to improve products. Have you implemented any changes so far this year?
MT: Yes. We made a significant change to our residential bridging proposition in early April when we increased our maximum loan to value (LTV) from 70% to 75%. This means we can provide property investors with the ability to achieve greater leverage.
The 75% LTV is available on properties in London, where the borrower has access to additional assets.
BA: Of course, if you make changes which will increase demand for your products, you need to make sure you can maintain service levels. Are you confident you can do so?
MT: Absolutely, because we have made great strides over recent months to reduce turnaround times. We have taken a hands-on approach to making the process smoother for brokers and their clients, as well as investing in staff and restructuring teams to make everything more efficient.
BA: What other trends are you seeing in the market at present?
MT: Due to the tough economic conditions, a significant number of both investors/landlords and tenants are acting differently to how they did 18-24 months ago. Many of those who rent have reacted to the cost of living crisis by moving to cheaper accommodation. This could mean relocating to a cheaper area of town (or further afield) or, alternatively, downsizing.
As a result, we are continuing to see rising tenant demand for Houses in Multiple Occupation (HMOs), which in turn is driving property investors to either buy existing HMOs or convert houses into HMOs.
This highlights the wider shift in investor priorities; namely, a drive to find better yields. HMOs can often generate better returns, as landlords receive income per room rather than for the whole property. Of course, when monthly earnings from an HMO could be up to three times as much as from a ‘vanilla’ buy-to-let, such properties command a significant premium for investors. As a result, we’ve seen increased demand for short-term finance for conversions to HMOs.
Similarly, advisers are more frequently submitting applications for their clients who are looking for funding the purchase of semi-commercial properties and Multi Unit Freehold Blocks (MUFBs) – both areas of (potentially) better yields than ‘standard’ buy-to-let properties.
*As published on BestAdvice: https://bestadvice.co.uk/qa-marios-theophanous-london-credit/
