This is why
Heightened LTVs, scrapping of 90 day forced sale valuations and removal of personal recourse for lowly geared deals to impact the lending sector
In response to the real estate demand for flexibility in short term financing, Reditum Capital has today announced disruptive new deal terms for its bridging services. Reacting to post Brexit reverberations, the looming 8 June general election, and subsequent consumer demand, the new terms are now effective immediately.
Included in these measures, the company will now offer LTVs up to 80 per cent for selected quality assets, up from its historic 70 per cent LTV, and a reliance on 180 days as opposed to 90 day forced sale valuations.
These introductions come in parallel with the lender remaining at the coal face of the industry by removing personal recourse as an overhaul of its approach to lending on deals below 60 per cent LTV.
With timescales remaining crucial for effective bridging finance, Reditum Capital has also introduced a 5 working day guaranteed timescale for the completion of transactions. Once standard documentation has been received, borrowers can benefit from having a fixed timescale to ensure the close of projects.
The global mezzanine and bridging finance company has introduced the changes to address the arising challenges in the commercial and residential markets, responding to recent geopolitical and market shifts.
At a time where conventional senior debt lenders may take longer to conclude deals and to act with caution, the launch offers borrowers a way to access agile finance.
Tim Mycock, business development director at Reditum Capital said: “These moves are disruptive but show that we understand the pressures facing our clients in getting deals completed. We are prepared to be fleet of foot in order to meet demands in an industry facing challenges.
“The real estate sector enjoys stability, but with the potential for a short term delay in market strength in the lead up to the General Election on 8 June, those trying to process new deals during this period may feel a hit.
He continued: “And that’s why we have opted to utilise 180 day RICS valuations instead of 90 day forced sale valuations and higher LTV’s for quality assets is a massive benefit for our customers. We are addressing a significant gap in the bridging finance market, which means borrowers can put less cash into the transaction, leverage the deals that need to be snapped up urgently and therefore, see a solid return on investment in the long run.”
Since its inception in 2013, Reditum Capital has arranged over £350m of funding for real estate and asset-backed transactions across the UK, Europe and the rest of the world.