Catalyst Property Finance extends bridging LTVs to 70%
Chris Fairfax

Catalyst Property Finance extends bridging LTVs to 70%

Catalyst Property Finance has reintroduced its 70% LTV bridging product.

Previously, the specialist lender launched a temporary restricted product range capped at 60% LTV, in response to the uncertainty caused by the coronavirus pandemic.

The interim bridging products offered loans for residential properties in major towns and cities with a maximum loan size of £5m.

“Recently, I stated our risk would be closely monitored and updated as soon as we felt it prudent to do so,” said Chris Fairfax, CEO at Catalyst Property Finance (pictured above).

“Having undertaken a credit review, and in liaison with our valuer panel, we are now in a position to bring back our 70% LTV bridging product.  

“What’s underpinned this decision is understanding that the immediate and anticipated longer-lasting impacts of Covid-19 on the residential property market are now being risk-factored into valuations; so it is only fair to our brokers and borrowers that we move quickly to provide improved LTVs.”

In addition, Catalyst is now accepting AVM, desktop and drive-by valuations, subject to meeting criteria.

In an exclusive interview with B&C, Chris said that its continued activity throughout the Covid-19 crisis was thanks to a combination of diversified capital and the “nimbleness of operations”.

“We are the perfect size to continue lending remotely as our existing loan portfolio is manageable, while we still have good capacity to write new business,” he added.

“The credit process has changed, but we do have access to valuers who continue to safely inspect and report internally, subject to RICS and HM Government guidelines; and our solicitors have made our signing and legal advice process more flexible to accommodate the current situation.”

Prior to the coronavirus outbreak, Catalyst was preparing to enter the development finance market, but this has been placed on hold.

He explained that the lender planned to offer a stretched senior product to support small to medium schemes, initially from £250,000 to £2m in loan size.

Chris hopes to launch the offering later this year, but will “closely monitor risk and operational factors” to make sure its timing is right.

When asked about the impact Covid-19 could have on the specialist finance market, Chris did not expect a sharp ‘V’ recovery.

“The financial repercussions of Covid-19 will be felt for many years to come.

“Demand for property is likely to fall due to increased income uncertainty, and this might last for 18 months or more.”

He predicted that many property assets were going to fall in value as a consequence of higher unemployment, increased business insolvency, and a large reduction in GDP.

“We could see residential property lose anything up to 20% in value and, certain commercial sectors particularly affected by Covid-19, even higher.”

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