As confidence increases in the commercial property market, our brokers are reporting a growing desire amongst clients to expand their portfolios, or consolidate their position in the market by renovating and upgrading their property.
It seems that more and more tempting opportunities are presenting themselves to investors throughout the UK – clearly good news after the challenging years of late. However, exploiting new investment prospects is not as straightforward as it has been. Some of the most exciting opportunities are no longer simple mainstream buy-to-let (BTL) arrangements. Brokers are instead seeing demand from investors looking at HMOs, multi-units and mixed used commercial expansion.
Whilst the more complicated nature of these properties will not deter experienced clients, they can face a significant challenge when it comes to securing the funding required. Each week we hear from brokers whose clients are still struggling to obtain finance for properties that are considered more complex, or which don’t meet the strict BTL criteria. Some investors believe they have hit a brick wall or exhausted all options when they reach the limit of the number of properties they can lend against.
Fortunately, options do exist. New specialists like Shawbrook have been quick to recognise the need for lenders that take the more tailored approach needed for complex cases. Indeed, when we launched Shawbrook we made a very conscious decision to develop a lending proposition for the property investor market that would embrace professional investors with large property portfolios or those with non-standard properties, including multi-units.
So are specialist lenders the answer for brokers working on more complex cases? We believe the answer lies in two essential elements of a lender’s offer.
The first is very human approach to underwriting and decision making. It’s critical for a lender to understand the specific requirements of each client, and to look at applications on a case-by-case basis. Lenders like Shawbrook have specialist teams that underwrite each application on its individual merits. Vanilla BTL lenders, which are great for very straightforward cases, tend to use an online rules-based, ‘tick-box’ system which will discount anything that is more complex.
The second point is about flexibility – a critical factor in any complex case. We offer a breadth of lending options which covers HMOs, student lets, multi units and portfolios. We welcome individuals, LLPs and UK and Offshore Ltd Companies. Shawbrook will never limit the number of properties lenders can secure finance against.
Indeed, we provide funding solutions on both commercial and semi-commercial property, and offer loans sizes from £75k to £5m, up to a 75% LTV.
The market is growing and there are some exciting – and unusual – opportunities out there for brokers. Here’s to specialist lenders who can provide brokers with the means to take advantage of them.
Karen Bennett is sales and marketing director, commercial mortgages, at Shawbrook Bank