The Truth about Help to Buy?

The Help to Buy (Equity Loan) scheme is a government initiative created to help those who can only raise a small deposit towards buying a new build house or flat.  With Help to Buy, the Government lends you up to 20% of the cost of your newly built home, so you will only need a 5% cash deposit and a 75% mortgage to make up the rest. In London the maximum equity loan amount rises to a maximum of 40% of the property value meaning you only need a 55% mortgage. Since its introduction in 2013, Help to Buy has allowed 145,000 people to buy a new build house or flat.

So how does it work? In return for their loan, the government takes a stake in your property equivalent to the percentage contribution they have made.  The loan is interest free for the first 5 years but is subject to a management fee of £1 a month for the duration of the loan.

On the fifth anniversary of the loan, it is very important to note that your loan becomes eligible for interest payments at 1.75%. At first glance, that may not seem like much but since neither the management fee nor the interest fees are capital repayments, your loan amount does not decrease. Also, your loan amount will most likely have increased as it is linked to the value of your house. Therefore, after five years your loan amount might have increased along with the associated interest payments requiring you to review your finances to cover your loan payments.  

Before you start to worry, you have three ways to repay the loan. The first is simply to sell your property after 5 years, repay both the mortgage and the equity loan from the proceeds and use the remainder to fund the deposit for your next property purchase. The second is to re-mortgage the property and to use the additional funds to repay the loan thus financing the entire property in a traditional way. The final option is to make capital repayments on the loan either before interest fees are due reducing the amount of interest payable or after the 5 year anniversary until the loan is repaid in full.

Whichever method you chose, it is critical you obtain the right advice from your financial consultant before you commit to any mortgage or loan.  Our advisors at Arc & Co. have considerable experience in the Help to Buy scheme and will talk you through your options to make sure you have something in place to clear off the equity loan before you start to pay interest on it.

Let us help you future proof your mortgage.

If you are considering the Help to Buy scheme or would like some advice on your options for a mortgage, please get in touch in touch with Alistair.

Alistair has been in financial services since 2004. He started his career with RBS progressing to Santander then John Charcol before joining Arc & Co.in July 2017. Alistair specialises in complex cases, often involving multiple income streams, unusual properties or nonstandard personal situations. As well as providing quality, individual advice to his clients, Alistair prides himself on his customer service, economic understanding and industry knowledge. Throughout his career Alistair has built up strong relationships with underwriters at a number of smaller, bespoke lenders, allowing him to advise and find solutions for difficult cases.

Tel: +44 (0) 203 205 2129
Mob: +44 (0) 0796 750 9318
Email: alistair@arcandco.com

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Arc & Co.'s guide to buying your first home

Buying your first home can be daunting, especially with news reports about the increasing house prices and the restrictions on finding a mortgage. However, there are now many more ways available to you when buying your first house such as using family help, government schemes or buying with friends. 

Over the next few weeks, Alistair Hargreaves, a financial consultant at Arc & Co., will be writing a series of articles about the different ways that you can buy your first home. He will explain the advantages and disadvantages of the various options. These should help you decide which is the best option for you. The areas that will be covered are:

  1. Help to Buy

  2. Shared Ownership

  3. Joint Borrower/Sole Proprietor

  4. Family Mortgages

  5. Buying with Friends

If you require further information or advice about your situation then please don’t hesitate to contact Alistair on alistair@arcandco.com or +44 (0) 203 205 2129.

Gary Crichlow Joins Arc & Co. To Take Aviation Finance To New Heights

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Arc & Co. strengthen their Private Finance team with the addition of Gary Crichlow who specialises in aviation finance.  Gary holds a degree in Aeronautics & Astronautics from the Massachusetts Institute of Technology and has worked in aviation finance for the past 12 years. Having previously worked as the aviation asset manager at GE Capital and Lombard, Gary has a deep understanding of the aircraft financier world. He has handled numerous aircraft transactions, sitting at the nexus of technical, appraisal, operational, financial, tax and legal expertise to drive deals to completion. 

Andrew Robinson, Arc & Co. CEO, said of the addition ‘it’s a privilege to grow the team with someone who has the vast market experience such as Gary. He has first class aircraft asset knowledge and when combined with Arc & Co.’s financing skills it will provide real substance to our debt advisory platform’.

To get in touch with Gary to discuss a new or on going finance requirement use the contact details below.

Gary Crichlow

Arc & Co.
30 St. George Street, London W1S 2FH
Tel: +44 (0) 20 3205 2128
Mob: +44(0)7795 128041
Email: gary@arcandco.com
www.arcandco.com

The Budget, First Time Buyers and Help To Buy

With Brexit looming the Chancellor didn't have a much room for manoeuvre. However, as widely expected he has extended Help to Buy for a further two years, now ending in 2023. The policy has proved popular with home buyers, with 145,000 new build homes bought with the equity loan option from its inception in 2013 to March 2018. The policy allows a client to buy a new build house with the aid of a five year interest free equity loan. The loan is up to 20% in England and Wales and 40% in London. After five years, interest is charged on the loan.

House builders certainty like the policy and it has been accused of driving up prices. However it has helped a significant number of people to buy when they almost certainty would not be able to afford to.

The key thing to remember, if you plan on buying via Help to Buy, is how you are going to repay the equity loan after the five years; it could become very expensive as interest is charged on a potentially increasing loan amount (the level of loan is based on the current value of your property, not the amount borrowed).

The other key area that Philip Hammond delved into was extending the stamp duty holiday for first-time buyers purchasing shared equity properties up to £500,000. This on its own, I don't think, will encourage someone to buy a first home, but it’s a nice bonus for first time buyers who are scraping together a deposit.

So no new bells and whistles for people buying, but a huge sigh of relief for landlords as no further changes to tax for their portfolios have been announced.

Of course, dependent upon Brexit the above could all change.

 

If you would like to review your current mortgage, or if you are considering buying then please do not hesitate to contact Alistair using the details below.

Alistair Hargreaves
Financial Consultant

Tel: +44 (0) 203 205 2129
Mob: +44 (0) 0796 750 9318
Email: alistair@arcandco.com

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Arc & Co. Set Themselves Apart By Advising Client On Refinancing 18 Property Central London Portfolio.

This situation may not seem out of the ordinary at first glance.  An 18 property portfolio valued in excess of £10m isn’t unusual, but the circumstances around the refinance made this a very complex deal.  Case studies like this demonstrate how advisers at Arc & Co differentiate from their competitors.  Daire Dowling, Managing Director of Arc & Co. Private Finance went well beyond what was expected and explains below why this was such an unusual case.

“The client wished to raise £6.3m against their £10.5m property portfolio in central London. Historic issues with rent, HMO licencing and planning made presenting the file to prospective lenders difficult. I worked closely with the clients tax advisers to switch the portfolio from a partnership to a Ltd company.  This allowed the portfolio to be as efficient as possible. Once the new company was setup a full transfer was carried out with clearance from HMRC, in writing, that a stamp duty exemption would be allowed for the transfer of the assets.  We then presented the client with a sharia compliant loan ,due to historic income being low, on a 5 year fixed rate at 4.3%.”

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To speak to Daire about any finance requirement please use the contact details below:

Daire Dowling
Managing Director
Arc & Co. Private Finance

Tel: +44 (0)20 3205 2196
Mob: +44 (0)79 2936 9175
Email: daire@arcandco.com

ARC & CO. ADVISES ON £2.3M LOAN FOR THE SPECULATIVE OFFICE CONVERSION OF 200-YEAR OLD LISTED BUILDING IN IPSWICH

Mayfair-based specialist finance advisor, Arc & Co. today announced it has advised Pertwee Park Ltd on a £2.3m development loan. This loan allows for the conversion of one of Ipswich’s most well-known landmarks, an early 19th century building most recently used as a nightclub, into upmarket offices. High tech and media companies are likely to be the new tenants.

The Malting’s in Princes Street, is being converted by Pertwee Estates, the Colchester based business park developer run by brothers Mark and Julian Pertwee, who purchased the historic buildings from previous owner Ipswich Borough Council. The former entertainment venue, that previously operated as The Malthouse and before that as Kartouche and Hollywood nightclubs, has been standing empty for years.

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Jeremy Robinson, Asset Finance Adviser at Arc & Co., said:This was an unusual funding requirement in that it was a speculative development of office space outside of London. Without tenants already having committed to the property this adds a level of risk for any potential lenders making it harder to obtain good terms for the client. However, due to both the quality of the scheme and that of the client we were able to place the transaction on attractive terms by working closely with a supportive Lender.

Mark Pertwee, Managing Director at Pertwee Park Ltd, said: Our intention with The Malting’s is to create something new and unique in the area. This is a building with a very individual style and in its restoration we are celebrating its 200-year-old architectural heritage through a contemporary refurbishment. Princes Street, the corridor between the railway station and town centre, is now widely recognised as Ipswich’s prime business district.”  

Adam Bovingdon, Property Development Director, United Trust Bank commented: “We were introduced to Mark Pertwee by Jeremy Robinson of Arc & Co. and asked to provide a development facility. The application presented by Jeremy was professionally put together and was accompanied by a number of impressive CGI’s showcasing how The Malting’s would look both internally and externally once complete.

We quickly arranged a site meeting with Jeremy and Mark who was able to talk us through his commercial development experience. United Trust Bank are very pleased to be able to support the project which, once finished, will provide high quality office accommodation in one of Ipswich’s most iconic buildings.”

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To get in touch with Jeremy please use the contact details below:

Jeremy Robinson
Asset Finance Advisor

Office: +44 (0)20 3205 2199
Mobile: +44 (0)7976 737552
Email: jeremy@arcandco.com

Arc & Co. Advised On Over €28m of Superyacht Finance In Q3.

Last month’s Monaco Yacht Show showed everyone that the Superyacht market is as hot as ever. In Q3, Arc & Co. advised and completed on three remarkable Superyacht deals totalling over €28m. 

Just as both the technology and size of Superyachts continues to progress, so are the ways in which they can be financed.  It is important to understand your options and meet with an experienced marine finance advisor.  Contact our specialist marine finance advisors at Arc & Co. on yachtfinance@arcandco.com to arrange a meeting.

ARC & CO. STRUCTURE £11M DEVELOPMENT EXIT FACILITY ON LUXURY 11-UNIT SCHEME IN SOUTH EAST LONDON

Mayfair-based specialist finance advisor, Arc & Co. along with bridging loan specialist, Octane Capital, today announced it has provided Arc & Co.’s client with an £11m development exit loan. The development exit loan provides the developer with extra time to sell units and additional working capital. 

The loan is against a pre-practical completion luxury scheme in south east London comprising of 11 units, each valued at a minimum £1m. To date, one of the units has sold and two have exchanged. 

The one-year exit facility, at 70% LTV (net), has given the developer enough time to carry out the remaining work on the units and additional funds to boost both working capital and cash flow. 

John Kerrigan, Director, Structured Finance, Arc & Co, added: “The developer is a key client of Arc & Co but this particular scheme, despite strong fundamentals, had a number of complex issues to address that we knew would be beyond the comfort zone or skill set of many lenders. The Octane team have shown their ability in structuring complex loans and were pragmatic and persistent throughout.”

Alex Tyrwhitt, Head of Structured Finance, Octane Capital, commented: “This was a complex loan involving multiple moving parts but the support we received from Arc & Co was second to none and helped us get it across the line ahead of schedule. We look forward to working on many more deals with John and the team in the months ahead. They’re a sophisticated broker that understand the mechanics of even the most complex loan structures.”

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If you have an existing or up coming project you would like some advice on please get in touch with John on the details below:

John Kerrigan
Director
Arc & Co. Structured Finance
Tel: +44 (0) 203 205 2124
Mobile: +44 (0) 750 822 5678
Email: john@arcandco.com

Arc & Co. Advises On Exit Bridge Loan For 200 Year Old Barn Conversions In Cumbria

Clients often turn to Arc & Co. when deals are particularly complicated, time-pressed or when high street lenders are not an option.  All three were the case when David South of Hamilton South Limited, a Cumbrian property developer, approached Sam Le Pard, an Asset Finance Advisor from the Structured Finance team at Arc & Co. to arrange an exit bridge loan following the restoration and conversion of two fantastic 200 year old barns. 

The client was looking for advice and assistance on arranging bridge finance against three stone barns in Cumbria. Two of the three barns had been carefully renovated, with work on the third yet to start.  The original development facility was coming to the end of its term and needed to be re-financed on an exit bridge to allow the client a proper sales period to market the properties. 

There were three factors that made this transaction challenging (and interesting!):

    • The assets themselves, 200-year-old Cumbrian stone barns converted into large family properties for the first time, were unique.

    • The location was particularly rural; and while great for hunting, fishing, golf, wildlife, and hiking (the properties are in view of the Lake District mountains), slightly unknown to certain mainstream lenders.

    • It was a race against time as the existing facility was coming to an end. 

In the end, Arc & Co. worked closely with David South and Jon Salisbury  of Ortus Secured Finance to arrange a £700,000 loan at a rate the client was very happy with. Arc & Co were able to use their knowledge of the finance market to match David South's unique project with Ortus' flexible lending approach to ensure the required funding was obtained.

David South was particularly pleased that Arc & Co took the trouble to visit the barns to get a proper feel for the opportunity in this relatively undiscovered area of North West Cumbria. David has kindly since asked us to act for him in structuring the finance for Phase 2 of his development.  

The properties are currently being marketed by national agent Fine & Country who declared them as 'Awesome' and see a growing market opportunity for high end quality developments across North West Cumbria.

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To get in touch with Sam please use the contact details below:

Sam Le Pard
Asset Advisor
Arc & Co. Structured Finance

Tel: +44 (0)20 3205 2195
Mob: +44 (0)79 1715 4432
Email: sam@arcandco.com