Bridging Finance News

Capital Bridging welcome Masthaven’s move into Scotland

January 11th, 2013

In the wake of the Cheval departure from the sector Keith Aldridge, Principal at Capital Bridging Finance is delighted Masthaven have filled the gap in the Scottish market.

In 2012 Scotland accounted for 11% of the short term bridging lenders business and their plans are for that to double in 2013.

Commenting on the recent Masthaven announcement Aldridge said:

“Some people may say it is strange to compliment the competition on entering a market that you had a strong presence in but in this case I think it is good news for Capital Bridging Finance. We lend in all the major conurbations in Scotland but have felt for some time that the potential was not being realised by brokers and so the more quality lenders that highlight the potential and are prepared to educate the broker market the better for the sector.

“Don’t get me wrong – I do not want the market flooded, but competition and choice has to be good and we see the incursion of Masthaven as very positive as we turn up the heat on our plans for Scotland. North of the border we have found the level of professional competence amongst our solicitor and valuation partners to be outstanding and are very excited about our plans for the region in 2013.”

Masthaven moves into Scotland

January 7th, 2013

Masthaven is pleased to announce that, with immediate effect, it is extending the reach of its products and service into Scotland for both of its business units, Masthaven Bridging Finance and Masthaven Secured Loans.

Masthaven Bridging Finance will lend up to 70% LTV on a first charge basis for both regulated and non regulated bridging loans in the larger cities of the country.

Masthaven Secured Loans will extend its current product offering on the same terms and criteria already available in England and Wales.

Richard Deacon, Sales and Marketing Director said of the announcement, “This is great news for Masthaven and a fantastic way to start the New Year. Masthaven has identified a potential area of growth that is very much under the radar of the majority of other lenders and can give our business levels a real boost. For some time now we have had a number of very high quality Scottish introducers giving us business in England and Wales, but also wanting to use us to place their Scottish business. Now they can. It is a huge opportunity and one that I am relishing to build new relationships in.”

Stuart Aitken, Chief Operating Officer of Masthaven Secured Loans also commented, “We are delighted to be able to offer our products in Scotland so soon after our initial launch, and look forward to growing a substantial market presence throughout the UK.”

2013, the year of the monster !

January 4th, 2013

Before we start hypothesising about what 2013 will actually be like for the bridging market let’s look back on 2012 and the highlights as well as the lowlights.

Chelsea’s champions league success and Olympics aside, 2012 was a very successful year for bridging finance. Both media and introducer alike finally “got” bridging finance and embraced it with record levels of business being done if the NACFB and AOBP figures are anything to go by. There were successful Mortgage Expo’s in Manchester and London which had several numbers of bridging lenders there exhibiting, which again showed the strength in depth of the industry.

There were numerous new entrants to the bridging market which showed above all else that investors see the market as a buoyant one, and one that can give a safe and secure return on investment. However it wasn’t all beer and roses though as the industry lost 2 of its biggest players in the shape of Tiuta and Cheval. It’s not for me to go into the why’s and wherefores of their demise, sufficed to say that bridging is like a child…you need to take care over it and watch it like a hawk!

So what does the new year hold in store for bridging finance?

I think it’s a safe bet to say that 2013 will be another growth year for bridging finance. I can only go on Masthaven’s figures of course, but 2012 was a very successful year and our predictions of 2013 indicate that it is due to be another record breaker. There is an awful lot of flannel spoken about how much is actually written by bridging firms within the industry as some people quote from ASTL figures, whilst others quote from AOBP figures. Both have their merits, but neither is an exact replication of what is achieved in our industry, and many years ago I decided to give up “keeping with the Jones’s” and concentrate on doing the best job I could with the tools I have been provided with. 3 separate awards from 3 separate awards ceremonies in 2012 indicates we seem to be doing a half decent job!

There has been speculation that LTV’s will rise and rates will drop this year. I’m not sure whether that is a prediction or whether it is a brokers wish list! I can certainly see tweaks in both of the above, but I am not sure it will be wholesale changes. What I can’t abide, like most brokers, is false advertising of ultra high LTV’s or ultra low rates that aren’t achievable. I am aware that the very odd deal goes through at the advertised values or else the adverts couldn’t go out, but I do get bombarded with calls from introducers asking if they can use us to get the job done as XYZ lender has not come up with the goods.

If 2012 is anything to go by there will be another influx of new money to the arena. This is a good thing as a whole, but must always be looked at with caution from the borrower’s perspective. What track record does the lender have? What regulatory bodies are they signed up to? Have they the collective knowledge to provide you with the best product to fit your requirements? All these questions and more must be asked before you commit to any financial product, certainly one like a bridging loan.

Will more lenders fall by the wayside? Well, if you’re a stats man, then yes, they will. 2 major lenders and one or two smaller lenders shut up shop last year, and in 2011, so the trend is that 2013 will follow suit won’t it? As Masthaven enters its 30th year of lending, myself and the fellow directors think we have seen most things in financial services, but it is always wise to keep an open mind and look at all the different components when it comes to assessing the risk profile of a deal, as this is the bottom line of all lending decisions.

2013 is the Chinese year of the snake which for the bridging industry is really something to sink its teeth into.

ASTL bridging figures revealed

December 19th, 2012

The figures are collated from ASTL members on a quarterly basis.

In the last quarter up until the end of September, applications were received for £1.064bn, while members lent £265million worth of loans.

The loan book at end of period was worth £974million.

Figures for the quarter ended September 2012 reveal that applications were down on the previous quarter, but there is a steady upward trend in the value of loans written and the size of loan books.

Benson Hersch, chief executive of the ASTL, said: “There is a growing need for bridging and short term loans of 12 months and under as mainstream lending becomes harder to access. The first, complete quarterly statistics from astl members reveals that while bridging makes up just a small proportion of overall lending, the amounts lent are significant.”

“The quarter up until the year end has seen increased demand and I expect the next quarter’s figures to show an increase in both demand and loan values.”

The ASTL short term lending figures, representing the lending of all of its members, will now be produced and published quarterly.

You’ve been scammed

December 14th, 2012

Loan Applications – The do’s and don’ts

December 13th, 2012

Whether it’s a breakdown in communication, a lack of due diligence or a failure to recognise fraudulent applications, there are numerous reasons why bridging cases can experience difficulties. B&C spoke to Claire Wasbrough, Underwriting and Operations Manager at Masthaven Bridging Finance, to highlight recent problematic cases from which brokers can take note…

I’m often asked to highlight areas in cases where we frequently experience problems and, although each case is different and has its own difficulties, I’ve tried to narrow down a few common problem areas and ways of resolving them. 


One key area which leads to delays is when clients use solicitors who are not familiar with bridging. The legal work for a bridge is very similar to a standard conveyancing transaction; the speed, however, is not. I have lost count of the number of cases where clients’ solicitors have sat on the legal pack and taken several weeks, if not longer, to actually work through the items requested and get their clients into their office to sign paperwork.

Using a solicitor who is familiar with bridging would without a doubt speed things up and eliminate a large number of problems.

Legal factors

I am working on a case at the moment which has been delayed due to a number of legal factors.

The first problem arose due to the fact that the property being offered as security is not registered with Land Registry. Masthaven’s solicitor, in this instance, needs to review all the documents relating to the title of the property and be satisfied that Land Registry will accept the application and not raise any questions. In this particular case, the client’s solicitor is sending the documents over in dribs and drabs which is not helping the situation. My advice for clients in similar situations is either to ensure that their solicitor deals with the registration prior to taking out the loan, or to ensure that their solicitor obtains all of the deeds and associated documents to send over in one pack to the lenders solicitor, enabling them to easily review everything simultaneously.

A second problem in the case has arisen from the fact that the other property being offered as security is on a large title deed, though the client only wants to offer part of the title. In these situations, the lender has to be satisfied that they are getting the area they think they’re getting, so a plan is crucial. The initial plan that was provided in this case was shown to the valuer, who wasn’t happy that it correctly depicted what he had valued. In addition to this, our solicitors had to ensure that the plan being provided would be accepted by Land Registry, so it had to be to the correct scale and so on. In this case, there was a delay while the correct plan was obtained, but had the clients solicitor ensured a correct plan was available initially these delays could easily have been avoided.

ID and proof of address

Moving away from the legal aspects, another area where there are problems is in obtaining correct ID and proof of address. All lenders will need to comply with their own ‘know your customer’ and AML requirements. For the majority of borrowers this won’t present a problem. Some clients who don’t have standard forms of ID, however, may struggle to provide something that is acceptable. There are ways that this can be satisfied if the usual passport and driving license are not available; if you know your client doesn’t have the standard items, check the lender’s specific requirements up front to avoid any delays.

The same goes for proof of address. Masthaven’s standard requirement is for two recent bank statements or utility bills registered to the borrower at their home address. If a borrower has recently moved house, then ensure that they change their address on their accounts as soon as possible so they will have the correct documents to provide. If this is not possible, make the lender aware upfront so that an alternative solution can be found.

I was recently working on a non-regulated case where a borrower was using bridging to complete the purchase of a property, which we had been informed they were going to be letting out and refinancing. During the initial conversation with the client, it transpired that in actual fact the client was planning on moving in to the property, therefore requiring the loan to be regulated. The broker was authorised to give advice so that the loan could proceed, but unnecessary delays were caused because we were not made aware of this upfront.

A number of brokers are under the impression that if a borrower does not live in a property during the course of the loan then the deal is not FSA-regulated. The FSA handbook does state, however, that a mortgage contract is regulated if there is the “intention” to live in the property, which may be during the course of the loan or after redemption. Ensuring that the lender is aware of this upfront will ensure delays do not occur.

In all the above examples, communication between the client, broker and lender is key to ensuring delays are minimised and problems are overcome efficiently.

How Masthaven cracked the £1.5m ‘fake sheikh’ mortgage fraud

December 12th, 2012

The fraud, featured on the BBC’s You’ve Been Scammed programme which ran this morning, began at the start of 2010 when bridging loan firm Masthaven was contacted about a potential £1.5m loan by mortgage adviser Jonathan Flynn.

The broker said that he had two clients from the Middle East who owned a £5m property in Bayswater, London. Flynn said the pair of sheikhs were seeking a £1.5m loan on the property and then provided fake passports and proof of ownership to the lender.

The pair of ‘investors’ were Ahmed Ali, 47, and Shakil Ahmed  36, and the house was actually owned by a family from the Middle East.

The family was not living in the property at the time and had put the house up for sale. The scammers had used the Land Registry to acquire the deeds to the property to find their details.

Masthaven, unaware of the scam, sent a surveyor to the property to confirm its value. The fraudsters were able to gain access to the home by arranging a viewing with the estate agent and pretending that they were representatives of an Arabian princess who required a detailed viewing to see if her furniture would fit into the property.

However the scam soon began to unravel because Masthaven policy dictates that a face-to-face meeting must be held with all clients who wish to take a loan of over £1m. When the lender contacted the borrowers, they quickly changed the loan required to £925,000.

This caught the attention of Andrew Bloom, managing director at Masthaven. He told the programme that such big alterations made him doubtful about the case.

“When we asked then why they needed £1.5m in such a rush they were very flakey with their answers,” he told the programme.

“We contacted them and a day later the loan dropped to £925,000 and that made us suspicious.”

Bloom contacted the City of London police who began to track the case and he decided to recheck the original documents provided. He looked to verify a utility bill by contacting the energy company who were said to have provided it, they said it did not match the address they had on file.

The police became confident that the case represented a fraud, but were unable to track down the criminals as every address provided was false.

But the criminals were caught when a sting operation was launched. This saw a meeting take place with Masthaven and the fake sheikhs to catch the crooks in the act.

Ali and Ahmed were arrested at the scene and later sentenced to 30 months in prison. Mobile phones seized from the pair proved that broker Flynn was the mastermind behind the scheme and he was sentenced to four years and six months behind bars.

Bloom said he was pleased that the criminals were handed lengthy sentences.

“I was delighted that people were given a significant amount of time behind bars. Mortgage fraud is not a victimless crime. It increases the payments of me and every other consumer out there.”

The police later discovered that the passports belonged to a child that had passed away and had been altered to include a different photograph, name and address. A fourth man, Shane Martin, was also implicated in the crime but remains on the run.

Mortgage Strategy Awards 2013

December 12th, 2012

We are delighted to announce that Masthaven Bridging Finance have been selected as a Mortgage Strategy Awards 2013 finalist.

We have been shortlisted in the following categories:

4. Best Short-term/Bridging Lender

The shortlists were compiled from online nominations and, where applicable, also from nominations submitted to the CML or AMI by selected lenders and brokers. The top companies that received the most nominations in each category were put forward to be discussed at the judging day; given the rigorous judging process it is a great achievement to have reached this stage.

The results will be announced at a glittering awards ceremony and gala dinner on Wednesday 13th February 2013 in the Great Room at the Grosvenor House Hotel, Park Lane.

Fingers crossed!!!

Director admits guilt in £1m property fraud

December 11th, 2012

A director has admitted that he carried out an extensive property fraud, involving faked emails and a fictional real estate investment and totalling £250,000, The York Press reports.

However, former property firm director Guy Brudenell still denies two further frauds involving potential property investments worth £1 million.

The bankrupt businessman, who racked up debts of £21 million in 2009, admits committing fraud between the 23rd and 25th March 2009 by falsely claiming that a £240,000 investment would be put into property.

Brudenell has also admitted sending fraudulent emails in other people’s names on 23rd March, 2nd April, 15th April and 8th July in the same year.

He also admitted making an article for use in fraud by opening a NatWest bank account in 2009 which was used to hold some of the money involved.

The outstanding charges against Brudenell detail two instances where the North Yorkshire businessman deceived would-be investors into giving him six-figure sums, claiming that the money would be used for property deals.

In November 2008 he allegedly claimed £600,000 from one potential backer and, between December 2008 and January 2009, £400,000 from another.

The charges against Brudenell also maintain that he sent email messages connected to the fraud between January and September 2009.

Brudenell once had commercial interests both in the UK and abroad, including stakes in aviation, hotels, restaurants and property companies, but was declared bankrupt in 2009 after amassing debts of £21 million.

The entrepreneur was previously a director at New Bond Street-based property companies Feversham Developments and the Helmsley Property Trading Company.

His property investment portfolio included shares in two Helmsley luxury hotels, the Feversham Arms and the Black Swan.

Brudenell will now appear before Teesside Crown Court to answer for all outstanding charges against at a date to be determined.

Deal-focused group brings funders to investors

December 11th, 2012

Last week, the London Property Professionals (LPP) Meet the Money event took place in London and was a great success, setting a strong foundation for future funding forums.

LPP is London’s recently-launched, deal-focused property networking group and is part of the fast-growing UK Property Professionals (UKPP) network.

UKPP, an Edinburgh-based company, specialises in the development of city-specific property networking groups to increase communication and collaboration between all property professionals throughout the UK.

GVA, the main sponsors of the last week’s forum, hosted the event at its offices in Mayfair, London, on Wednesday 28th November 2012, with around 60 people in attendance.

The forum was an exclusive platform for developers and agents to meet the Funding Panel, share opportunities and nurture relationships.

The Funding Panel

(From left to right: James Bloom, Regentsmead Limited; Daniel Norman,Davon Ltd; Steven McColl, Soho Corporate; Noel Meredith, United Trust Bank; Andrew Bloom, Masthaven Bridging Finance; Elliot Hyames, Dragonfly Property Finance; Mark Antscherl, UK Property Professionals)

Opening the session Mark Antscherl, Founder and Chief Executive of UKPP,described how the group started as a modest group of likeminded individuals in Edinburgh which has since rapidly grown to include Glasgow, Aberdeen and London, with plans to launch in a further five cities.

He explained that as development funding continues to be a key area of frustration and concern for developers working in London’s commercial and residential property sectors, the unique Expert Forum was set up to bring together a selection of active funders and investors looking for opportunities.

After Mark’s introduction, each member of the Funding Panel presented a brief introduction to their respective businesses along with a recent case study. After the presentations, there was a networking opportunity which gave the audience the chance to engage and talk directly with the Funding Panel members. Guests discussed their funding requirements, enquiring about development funding and JV development partnerships.

Mark Antscherl told B&C: “We differentiate ourselves by being the only networking and deal-focused property group covering the UK. Membership of a city group not only offers the benefit of networking events and expert forums in the selected city, but also gives access to other city groups and the extended network of members.

“Since launching in April 2010, we have attracted well over 300 subscribed members from over 250 leading companies. We have run over 80 successful and extremely well attended events and have over 8,500 online members, making us the fastest-growing property network in the UK.

“The most important element of our activities is that individuals and companies are connecting and doing business, which is extremely positive and the ultimate gauge of any networking initiative. Launched at an extremely difficult time, UKPP is relevant and beneficial, reflected in the encouraging membership support and sponsorship support.”

Members are invited to all future events. Previous London events have included an evening with serial entrepreneur James Caan, with an insight into his investment plans within the real estate sector, expert forums and ‘Property Question Time’ with leading professionals about areas such as the London residential property market, private and institutional investments, commercial property, senior debt and property fund management.

To find out more about UK Property Professionals, the different cities linked to the network, its membership and future events, click here.