January 2020
By Harry Tuke, Solicitor at Elite Law Solicitors
At Elite Law’s Hove office we are genuinely excited about the year ahead. We focus on transactional property matters, from everyday conveyancing to more specialist secured finance, with a particular interest in bridging loans. At Elite Law, we have seen an increase in market activity since the General Election. By the middle of January we were already approaching and overtaking November’s and December’s file opening numbers respectively, and I wouldn’t disagree with the many recent references to ‘pent up’ demand coming to the fore.
Although this is excellent news for the conveyancing market, it is also good news for secured loans. Whilst it is possible for short term lenders to benefit a little from an uncertain market, when property owners might choose to delay selling, wait until the next increase in value, and perhaps turn to short term loans, I suspect this is far outweighed by the increase in the number of loans taken out during an upward spiral. As supply and demand grows, the number of BTL landlords, developers and buyers at auction who occasionally turn to bridging loans will boost the overall volume of loans and keep the market competitive.
This year we will also be able to put behind us the valuation difficulties we encountered in the second half of 2019. Whilst I appreciate the sensitivities involved in a professional valuation, and especially those required for bridging and development loans, I was disappointed to see that some of my clients were unable to refinance from the year before due (in one particular case, which I understand was not uncommon) to a 15% reduction in value specifically attributed to Brexit uncertainty. Thankfully the valuation process should be a lot less painful this year.
And so, with an improved market and an increasing amount of work to compete for, we hope to grow and diversify our team. We are hoping to announce some new recruits soon! In the meantime we will continue to improve our internal processes with a view to optimising client service levels- from speed of service and draw down of funds, to thoroughness of our reports in plain English for clients to easily understand and consider. Whilst each client has different motivations and sensitives, almost all clients- especially bridging clients- appreciate a swift and thorough service and that is what I am motivated by.
I also hope that the industry will take some time to reflect on itself and continue to improve its offering. From my point of view, the legal due diligence process can be improved upon. For example, the requirements for KYC and AML checks are cumbersome at best when most bills and statements are sent online. Video conferencing has also been slow on the uptake and lenders should review this. Abortive fees is another area that could be reviewed, and I would welcome an agreed way forward on this, perhaps by way of some industry regulations, to keep the market fair and uniform.
There are all sorts of opportunities ahead, and I look forward to working with FIBA and its Members to help grow and hopefully improve the industry, whilst all the while completing on as many deals as possible on behalf of our borrower clients.