Borro pause property lending
Borro has paused its second charge lending until September following the EU referendum last month.
Borro CEO Paul Aitken said the firm was worried about uncertainty amongst other lenders and an increase in the number of re-bridges it is seeing.
However despite the pause Aitken said Borro would be happy to add new loans on a one to one basis.
He said: “Since the Brexit vote a couple of weeks ago I have become concerned at dramatic increase in the levels of re-bridges we have been asked to look at. Many of these are good quality which demonstrates a level of uncertainty amongst other bridge lenders that I was not expecting.
“As a consequence I have decided to pause expanding our property loan book until the early part of September while we monitor what is going on, and the potential impacts on valuations. To be clear, as loans redeem I am happy to add new loans to the book on a one for one (££) basis, BUT these must be first charge, max 60% LTV, £500K max, and London / South East focused (clearly there are pockets of highly desirable and liquid areas around the country we would also consider).
“I know this will be frustrating for some of you, especially the property-focused business getters, but remember we are in this for the long haul, and I need to ensure that we are doing the right things continually to build a long-term, sustainable loan book. Furthermore one of the real advantages of our business is that we have a broad range of assets we can lend against – you should see this as an opportunity to aggressively chase Luxury Asset deals for which it is very much business as usual.”
Borro are not alone in halting lending. On June 30 LendInvest temporarily stopped second charge lending following the Brexit decision (read more here) and a number of specialist first charge lenders have removed high loan-to-value products from their ranges.