Lenders step in to fill liquidity gap, says MTF chief Aboody

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Tomer Aboody, director of short-term finance lender MT Finance (MTF), says specialist lenders are stepping in to meet the needs of borrowers and fill the liquidity gap.

The MTF chief made his observation after it was revealed that property investors are choosing to seek alternative finance after finding it increasingly difficult to obtain buy-to-let mortgages.

It comes after the disclosure of the findings from the latest property investor survey conducted by MTF.

Details that emerged from the survey showed that some 57 per cent of 84 property investors quizzed struggled to land a BTL mortgage in the past 12 months.

And it also showed that 62 per cent pin-pointed affordability criteria as the biggest hurdle to overcome when it came to mainstream funding. This was followed by age restrictions at 20 per cent and inadequate deposit capital at 18 per cent.

That said, some 43 per cent polled said that they filled the gap in funding with other methods of obtaining liquidity, as 40 per cent of those chose for secured loans and 30 per cent pursued – and indeed – raised bridging finance.

When those who took part in the survey were quizzed about what mainstream BTL lenders could do to surpass the current levels of service and options, some 57 per cent highlighted the need for a more flexible approach to lending. 

Further, some 29 per cent said a reduction of processing times would be the best improvement, while 14 per cent said offering more competitive rates would be a huge benefit.

Mr Aboody said: "The results from our Q1 property investor survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding. However, specialist lenders are stepping in to meet the needs of borrowers and fill the liquidity gap.

“Bridging volume has peaked to its highest level as the product becomes an increasingly mainstream financial tool. This is good news for borrowers that are able to access fast and vast pools of capital to fulfil their short-term funding needs as well as a growing number of investors attracted to the space.”

MTF hit the headlines last year when they agreed to sell £125million of the business's bridging loan assets to an undisclosed global institutional investment manager with an option to sell a further £125million.

At the time of the development, Mr Aboody said it was "an exciting day in MTF’s history and starts a new chapter of growth". He added: "We look forward to continuing to engage with our highly valued client and broker relationships. We move forward with significant optimism for the future.”

Carl Eldridge is a journalist with more than 25 years’ experience working on local and then national newspapers, including a spell on the City Desk at the Daily Express, before switching from print media to the internet.

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