**2021 in Property Finance**

Well, as 2021 is drawing to a close… (yes, I do realise it is only November!). I thought I would write down my view on what 2021 has taught me about property finance.

So, I think one of the most interesting things I have seen is all time low residential mortgage rates. IF you had of told me 12 months ago, I would be doing 5-year fixed mortgages at just over 1% I would have laughed in your face. However, I have had the pleasure of supporting some great customer buying or remortgaging their dream homes at record beating fixed rates!

Granted, we are now seeing a reversal, but the rates are still incredibly low!

The second thing is property prices., now I will caveat this with I am not, and nor do I profess to be a valuer or a property valuation expert. However, I have plenty of clients that are. When we have been looking at auction finance or buy to let mortgages for purchases. The prices have gone bonkers… properties are going way over guide prices meaning landlords are finding it more difficult to make the much-needed profits on the ‘Buy, Refurbish & Refinance’ property strategy. So, we have been working with them to reduce the costs of things like bridging for auction finance.

Some of the ways we have been helping clients is buy reducing costs across most lines:

-??????Use of AVM (Desktop Valuation) where possible. This is usually 10 – 15 times cheaper than a short form residential valuation. It also speeds up the transaction times dramatically.

-??????Using lenders who can have the client’s solicitor’s dual represent both client and lender. This reduces the cost of the legal process typically by around ￡700 - ￡800.

-??????We have negotiated market leading rates with lenders, meaning our clients not only get better rates, but they also get lower set up fees and some have waived their exit fees too.

-??????Exiting the bridge at the soonest possible time. So, there is a saying in the property community about the ‘6-month rule’. Well, I just want to say B*LL*H*T!! There is a rule for SOME lenders. However, there are other lenders that will happily do a day1 remortgage. Meaning we can exit you from your bridge sooner saving you months in interest! This could equate to thousands of pounds in savings on your deal. Now, it is true I have more options at 6 months of ownership or post refurbishment but… it is also true that it is not your job to make my life easy. If the right thing for you is to exit the facility early saving you ￡￡￡’s. Then we will do the exercise and look at the difference in interest and cost.

The last thing that 2021 has taught me in property, is expect the unexpected. With every transaction, something new or creative comes along for me to structure.

Whether this be:

-??????Deferred consideration.

-??????Inventive tax strategies put in place by some world class accountants, then finding a lender who will support the strategy.

-??????The good old fashioned NMD deal (No money down). A good friend of mine explains these as ‘He now has no money, and he’s down’. They are never truly No money down. Its correct it can be none of your own money but, it comes to finding a strategy to make these work with lenders.

-??????Unpicking a transaction an inexperienced broker has tried to put together, and we’ve had to come in at the 11th hour to rescue the deal. This is all too common, when any of the above 3 reasons are put into the mix and the deal falls over in the legal process. Thankfully, we have some amazing lenders on panel that can help me, help a client rescue their deal.

Now these are just the thoughts of an over caffeinated broker on a cold November morning but, one thing is certain. 2021 has been a great year! Very challenging for all the obvious reasons and exciting with the expansion of our broker team and the launch of our regulated residential mortgage business ‘Advanced Mortgage Solutions North East Limited’. We launched this business to further support our clients in the residential mortgage and protection space.

Our business grows by referrals, and we have each of you to thank for putting us forward to support you and your contacts, it is appreciated.

Another year down, many many more to go!

Kindest Regards,

Chris Adlam