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Islay Robinson, Hugh Wade-Jones and Toby Johncox chat about finance and debt in the first half of 2022, including key trends and their insights on what products will be in demand in H2. Islay is Enness’ CEO and Hugh is Managing Director, they co-founded Enness in 2007. Toby is Head of Sales and regularly works on super-prime property finance and high-value, complex deals.
Hugh: Building momentum nicely!
Toby: My three words would be: challenging, time-sensitive, successful.
Islay: A different take: very, very slow. We're seeing lenders, surveyors, lawyers and every other part of the mortgage market buckling under pressure. We're brokering a lot of different types of finance at the moment, but mortgages are taking longer to complete due to delays in other parts of the supply chain.
Islay: We had a case in progress for about 14 months which we completed. It was a high-value, huge loan-to-value deal with a complex structure, an overseas borrower, some currency issues and some valuation issues – you name a problem, and this deal had it. But we got it done!
Toby: Mine was a loan I organised for a UK national living in France against a country home in the UK valued at £9.3 million. The client had no income – only liquid assets. We were able to organise a loan at 70% LTV – just over £6.5 million. I arranged the loan in four weeks to meet a tight exchange deadline, allowing my client to secure the property at a great price given the country home market, which is exploding at the moment. The rate was 2%+BBR. I was able to instruct friendly solicitors and valuers who I knew would move quickly to make sure we had a successful outcome for the client.
Islay: Long-term fixed rates are now very popular mortgage products. Rates have increased significantly since the start of the year, but there are still some great options. The best time to get a fixed-rate mortgage was six months ago, and the next best time is now! We're also very busy on single stock lending as clients seek to take advantage of the equities market. Business finance continues to be popular as companies raise finance to take hold of opportunities and restructure their debt.
Toby: We have also been busy with mortgages, particularly prime and super-prime residential purchases for UHNW international clients. We've also worked with clients who have income from non-conventional industries such as crypto and gambling.
Hugh: It has to be bridging finance in terms of where we’re seeing more demand. As lenders become more selective, we're seeing a lot more enquiries for bridging, especially for specialist and more complex deals.
Toby: As rates increased, it was challenging to move mortgages through to completion. The prime market is still very buoyant, and clients are scrambling to secure attractive long-term fixed rates. At the same time, vendors are demanding short timelines to exchange. We've had to be incredibly responsive to get deals completed at record speed, leaning on our partner relationships to ensure our clients have the right professional teams in place.
Islay: I'd agree that execution has been our primary added value in Q1 and Q2. Lenders are lending, but it's taking a long time to get through the process – all parts of the transaction chain are slow or delayed. Time kills deals, so we are doing everything possible to push transactions through to completion as quickly as possible.
Hugh: I think we've also had to manage client expectations because some clients want rates which are now out of line with what lenders will offer as interest rates have increased. It will be interesting to see how clients and lenders react in a rising interest rate market. I think we may see a few casualties in the bridging lender space, and a few specialist lenders in the mainstream space will take their foot off the gas.
Hugh: With COVID behind us, we have been hard on the marketing and business development trail again, and we have made some new hires to build the teams in all the offices.
Islay: The continued expansion of our offer includes a wide range of debt solutions from an enormous panel of lenders and we can execute international deals. We can do anything from mortgages to crypto finance and everything in between.
Toby: We've also been improving our internal processes, product offering and expanding our international presence.
Islay: We have a major update to our introducer and partner services which we have worked on for a few months. We also have a few great new additions to the team coming in.
Toby: They can continue to expect fantastic responsiveness, solution-based advice, and the best possible outcomes for their needs. We will continue to improve our feedback loop and develop our product lines, including securities-backed lending and corporate finance.
Hugh: I think it's pretty obvious we'll continue to see rising interest rates, sliding markets and high inflation. It could make for a scary cocktail, but there will be plenty of opportunities, too.
Toby: We will continue to see high demand for Prime London and European properties. We will also see an influx of international buyers returning to London over the summer. I've been meeting clients in the UAE, Qatar and the rest of the Gulf – everyone is looking forward to escaping the heat and coming to London. Many are looking to invest in property whilst they are here.
Islay: I'm not forecasting anything at the moment – the world looks a little choppy!
Toby: We will see demand for bridging. Here clients will be looking to take advantage of potential opportunities and equity release especially as purse strings tighten, interest rates increase, and the cost of living continues to rise. I think we will see clients look to their homes for liquidity.
Hugh: Agreed – bridging finance all the way! I think we'll see incredible demand for that.
Islay: I think there will be demand for higher loan-to-value mortgages as well as remortgages and other equity plugs like mezzanine, second charges, secured lending and bridging finance.