Mayfair - the 'One Day Loan' Wonder

Mayfair - the 'One Day Loan' Wonder


Bridging finance specialist Mayfair Bridging, whose slogan is ‘a clear approach to bridging finance’, has caused uproar within the industry this week as a result of their recent winter bridging campaign, which included a headline rate of 0.5 per cent and free gifts.

In a recent e-shot, entitled ‘Winter Wonderland: Bridging Loan Giveaway’, the company in question advertised that their bridging products range from 0.5 per cent with up to 70 per cent LTV and that there will be a ‘free gift with any completed bridging loan this winter’.

Last month, Mayfair Bridging became FSA regulated and Director Yasin Patel was quoted as saying: “Introducers should engage in business with a regulated lender. There are many unregulated lenders out there with scrupulous business practices therefore brokers would be treating their customers fairly by advising on products from a regulated lender.”

A number of brokers said that the promotion was extremely unclear and the message and headline rate was very ambiguous. With a number of people confused and complaining that the rate needed to be clarified, and was being used as an inducement, Mayfair Bridging subsequently retracted their statement and issued a press release to clarify that the 0.5 per cent headline rate used was in relation to their One Day Loan product.

Yasin Patel, Director at Mayfair Bridging, said: “After the e-shot was sent out we received a number of enquiries from brokers who said that the message needed to be clarified. There was no malice in the promotion and the One Day Loan rate is viable and is a product that we offer. We’re not withdrawing the product and the rate will be 0.5 per cent for these types of deals. If there is any broker who wants a one day bridge then we’ll certainly cover it.”

The use of a One Day Loan rate as a headline rate has caused uneasiness in the sector, especially as One Day Loans are not really used as regularly these days. The ‘misleading’ use of the near non-existent one day loan bridge as a headline rate was criticised also by a number of lenders.

Richard Deacon, Sales & Marketing Manager at Masthaven, said: “What a great headline (but how many one day loans have they completed in the last 12 months?). It is misleading to the broker who may not read round the whole story.”

Cheval’s Finance Director, Gavin Diamond, said: “We don't advertise teaser rates that are only achievable in limited circumstances. We believe that transparency is the best way to maintain our brand and strengthen our relationships. Introducers that do business with us understand our market offering and how we operate. Our products and advertised rates are easy to understand and don't change from deal to deal.”

Alan Cleary, Managing Director at Precise Mortgages, told us: “Lenders cannot advertise a rate that they never actually end up doing - that is a breach of ASA rules. Adverts should be fair, clear and not misleading. I don't see anyone using a One Day Loan. What's the point?”

Allan Kay, Director of Cheval, admitted that: “It is a long time since we have seen a same day bridge - the take outs no longer exist.” He added: “I am not in favour of advertising teaser rates. At Cheval we try to ensure we are as transparent as possible.”

When asked how many One Day Loan products that they have completed in the last 12 months, Yasin Patel, stated: “Not many in the last 12 months, but we do receive a number of enquiries in regards to it.” Bridging & Commercial dug deeper and found out that Mayfair Bridging has “offered on at least three One Day Loans this year but that they were not completed.”

Speaking about One Day Loans Terry Markham, Managing Director at the Funding Operation, explained: “One day bridges have been on the decline over the past couple of years, due to the fact that exits are extremely difficult to arrange. Having said that there are two very large lenders who do not adhere to the six month ruling and so we have been successful in exiting these bridging deals.”

Mayfair’s clarified press release stated: “Mayfair accepts the product is very limited as isn’t that [sic] many lenders out there at the moment who will take out a bridge on day 1. However it can be used when flipping properties to cash buyers. Usual criteria is 0.5 per cent for Day 1 Bridging. 1 per cent per month for 40 per cent or less LTV and 1.55 per cent for >40 per cent <70 per cent LTV.”

Terry Markham spoke to us about his views about using a 0.5 per cent One Day Loan as a headline rate. “It appears to be the ‘in thing’ with most lenders today, in this war of who offers the lowest headline rate. However, if Mayfair do offer deals at 0.5 per cent then I cannot see the harm in that. At TFO we have had the benefit of receiving terms from Mayfair for 0.5 per cent for daylight bridges. The fact that other lenders may offer 0.75 per cent "headline rates" appears to be fine but do they then clarify that by saying, for example, that this is for LTVs up to 60 per cent? The answer to that is no as the "headline" is just a snapshot of what the lender can offer.”

The promotion also announced that Mayfair will be offering introducers one of four fantastic free prizes for any completed bridging deal, with a new free gift revealed every fortnight in the build up to the New Year. Currently on offer is a free 16GB Apple iPad 2.

Bridging & Commercial wanted to find out the rules and legality about giving gifts away with completed bridging loans and sought the advice of an expert to clarify.

Ray Cohen, Compliance expert and MD of Jackson Cohen, answered the issue about prize giveaways: “As long as it is officially stated that a lender pays ‘x’ amount of commission and ‘y’ amount for goods and services then it is legal. In this case, as long as the lender has declared it on the application then it’s perfectly fine.”

Alan Cleary stated: “Give-aways are Ok as long as they are proportionate to the deal. For example giving away a car would be disproportionate but giving away an extra £100 would probably be Ok. Every company has to interpret the rules for themselves and be happy that what they are doing is fair.”

Allan Kay believes: “I don’t think there is anything wrong with offering this sort of give-away. The problem arises in how to declare this to the borrower as effectively the gift is a Proc fee.”

Terry Markham added: “All lenders have a thirst for quality new business and are constantly looking at new ways of attracting this business. I think that offering gifts for every completion is absolutely fine as long as this is transparent and made clear to the borrower. For instance, payments to introducers and brokers have to be detailed on a KFI and so I do not see why the value of the gift cannot be clarified in the same way. This is not the first time a lender has offered giveaway's for completed cases and I doubt very much if it will be the last.”

In the clarified press release Yasin Patel also explained: “The Ipad2 giveaway is for all cases submitted by 22nd November but can complete within 2 months of submission. And with all e-shots it is for use with intermediaries only not to be used with clients.”

On November 4th Mayfair Bridging posted on Twitter: “If a bridging company has let you down call Mayfair Bridging”. The debate that has arisen in the industry as a result of their ‘Winter Wonderland: Bridging Loan Giveaway’ has caused unrest, with some saying they have felt let down by the unclear message, but Mayfair Bridging clarified their headline rate very quickly and in their follow up press release Yasin Patel said: “We hope this clarifies any issues and queries anyone may have had as Mayfair would like to stay and be known as “the Clear approach to Bridging Finance”.

What are your views on this and do you think it is wrong for one day loan rates to be used as a headline rate?

By Jason McGee-Abe


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    Yasin Patel

    Jonathan Bassey - Attention seeking. we have always offered this product no idea where you get this nonsense from. Read the article you will come to know that we have done 1 day bridging loans.

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    Jonathan Bassey

    I contacted Mayfair Bridging approx 6 months ago with a one day bridging enquiry for my client. I spoke with Shoaib Bux, Director alongside Yasin Patel who advised me that they no longer offer this product ?? This may explain why they haven't done any day one bridges in the last 12 months ??

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    Allen K

    Simon I think you will find Tiuta did actually give a car away. so the lenders offers do exist. Im sure mayfair do loans at 0.5% if it meets the criteria is it headline grabbing yes it is but if they have a product that does offer at 0.5% they should be free to advertise that. like the article said they very quickly clarified the situation. the other article where loan is offered at 0.6% per month also exists but does it say for first 3 months only in their marketing hmm not too sure not seen the ad

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    Simon Allen

    I'll set up a lender and we will offer loans at 0.25% only within the M60 corridor.Subject to the funds being repaid within the hour and the clients great great aunt guaranteeing the facility. First completion gets a car of their choice and will be entered into a raffle to win Greece. Your sanity is at risk if you believe lenders adverts

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