Case Study: Arc & Co. secure buy-to-let mortgage for Kazakhstan client

Contact: 
Nikita Nigai
Asset Finance Advisor
Arc & Co. Private Finance   

T: +44 (0)20 3205 2122   
E: nikita@arcandco.com

Client: Private employed individual from Kazakhstan

Requirement: Arc & Co worked on behalf of this private individual to obtain a buy-to-let mortgage for a new build flat in London with a value of £875,000. This was a complex deal due to the personal circumstances of the individual and him not having clear proof of income.

Solution: A loan of £596,800 was secured and with a loan-to-value ratio of 68%. This was at a rate of 0.9% per month and for a 12-month period. We also negotiated rolled up interest for the first 3 months, with no ERC (after the first 3 months) and the arrangement fee added to the gross loan amount.

News: Arc & Co. complete prime residential finance deals in London

Mayfair-based specialist debt advisor Arc & Co., has recently completed £70 million of loans for the refinancing of 3 prime residential London assets. The loans have a maximum loan-to-value (LTV) ratio of 65% and were all completed in the last month of 2018.

The loans provided refinancing for three development sites in Holland Park, St Johns Wood and Hampstead. The sites comprise a single development unit with a red book value of £50 million, a further single unit with a red book value of £34 million and a multi-unit development site comprising 31 apartments and 4 townhouses, with a red book value of £34 million and aimed at investors and individuals looking to downsize.

The London prime residential property market has been in decline since 2014 with very few lenders supporting the high value market.

To read the full release, please click here

“There has been a slight reverse in funding of prime residential property in the last 6 months, with new funding lines now available to developers. Following years of funding restrictions in the prime residential market, investors are now seeing the relative value and taking a longer-term view.

Over the past 3-4 years, it has been incredibly hard to finance central London development sites and these loans and the LTV ratios achieved, show that there is still liquidity available for the right projects and best sponsors.”

— Edward Horn-Smith, Arc & Co.

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Contact:

Edward Horn-Smith, Managing Director, Structured Finance - Arc & Co.

T: +44 (0) 20 3205 2126 E: edward@arcandco.com

News: Arc & Co. advise on £45 million blended debt facility to secure funding for EREC Estates Ltd 502-bed Purpose Built Student Accommodation development site in Coventry

• Octopus Property’s largest ever development loan of £36 million 

• Third Purpose Built Student Accommodation deal with developer EREC Estates Ltd

• Both Coventry and Warwick universities facing a significant bed shortage

London, 7 February 2019 - Specialist property lender Octopus Property, part of the Octopus Group, has agreed to provide EREC Estates Ltd, an experienced UK developer of student accommodation, with a £36 million senior loan for the development of a major Purpose Built Student Accommodation (“PBSA”) scheme in Coventry. The scheme was brought to Octopus Property by John Kerrigan – Director at Arc & Co., who advised EREC Estates Ltd on the debt structure, which also included a £9.2m mezzanine loan.  This loan represents the largest ever development deal completed by the team within Octopus Property.

Arc & Co.’s John Kerrigan

To read the full release, please click here

Contact:

John Kerrigan, Director, Structured Finance - Arc & Co. T: +44 (0) 20 3205 2124 E: john@arcandco.com

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In the Press:

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Case Study: Arc & Co secure buy-to-let mortgage on complex deal

Contact: 
Nikita Nigai
Asset Finance Advisor
Arc & Co. Private Finance   

T: +44 (0)20 3205 2122   
E: nikita@arcandco.com

Client: Private employed individual from Kazakhstan

Requirement: Arc & Co. worked on behalf of this private individual to obtain a buy-to-let mortgage for a 1-bedroom new build flat in London and with a value of £825,000. This was a complex deal due to the personal circumstances of the individual and him not having clear proof of income.

Solution: A loan of £457,875 was secured and with a loan-to-value ratio of 55%. This was at a total annual rate of 7.49%, with 2% of this deferred and added to the gross loan amount, therefore achieving an annual rate of 5.49% over a 36-month term. Interest is serviced on a monthly basis and the arrangement fee was added to the gross loan amount.

Let to Buy Chain Breaker

We have recently advised on a deal that has allowed a client to retain their current home and take money out of that house, to allow them to purchase a new main residence. In the 2010 – 2012 recession we saw many of these transactions, as people struggled to sell their homes, and now as the market is showing signs of another dip, this solution is more common once again.

So how does this work? In this instance my client’s current was valued at £500,000 and he had a mortgage of £268,000 remaining. We were able to arrange a mortgage of £375,000 (75% LTV) on this property, thereby releasing £107,000. The rent was assessed at £1,750 per month, which was well below the level required. However the lender we approached allowed an element of “top slicing”, whereby we could use the client’s earned income to top up the rent.

This is called a Let to Buy, as the client is letting their current home to purchase a new main residence. This is different to a Buy to Let, where the client is buying a new property with the sole intention of letting it out. Because they are not selling their current home, they would have to pay the stamp surcharge of 3% on their new purchase; but if they sell the let house within three years then they can reclaim this.

The onward purchase price was £700,000, and we arranged a mortgage of £530,000 with a lender who was happy with the Let to Buy in the background. That lender understood that the current house was to be let out, but there was no track history of rental income. They were satisfied with a letter from a local letting agent confirming the level of rent that could be expected.

This allowed the clients to be in control of their chain from day one, which subsequently allowed them to negotiate a better deal on their new home. We arranged a two year fixed on their Let to Buy, so if they decide to sell the let property they can reclaim the extra stamp duty that they have paid; and if they want it keep it then they have increased their wealth and aided their pension planning.

If you are in the above situation then feel free to contact Alistair.

Alistair Hargreaves
Financial Consultant
Arc & Co.
30 St George Street, London, W1S 2FH
Office: +44 (0) 203 205 2129
Mobile: +44 (0) 796 750 9318
Email: alistair@arcandco.com

Arc & Co. Secures Agricultural Mortgage for Land Purchase

Contact: 
Jamie Rigby
Financial Consultant
Arc & Co.   

T: +44 (0) 1295 793 1701
E: jamie@arcandco.com

Client:  Well-respected and successful farming enterprise 

Requirement:  The client approached their long-term agricultural lender to help purchase a neighbouring farm, they needed a quick approval in order to beat competing bidders. Unfortunately, after weeks of deliberation and with only three working days until bidding deadline, the bank informed their loyal client that they would not be able to assist. 

Solution:  Jamie Rigby, Financial Consultant at Arc & Co., was asked to step in and find an alternative within the short time frame. “I met with the clients over the weekend, and quickly established that their business was a sound one with strong financials”, Jamie explains. “The rationale for the purchase was good, and to me made complete sense. With only a few days grace, I knew I had to act quickly to give my client the best chance of a successful bid”. The following Monday, Jamie spoke with alternative lenders and quickly arranged a credit-backed 5-year loan with a reputable challenger bank, allowing the client to be in the strongest position possible to bid on the new farm.

“With a credit-backed bid, the client’s bid was accepted and we completed the purchase a few weeks later. What was equally gratifying”, Jamie says, “is that we managed to improve upon the rate suggested by the client’s long-term lender”. Jamie secured his client with a £2m agricultural loan on an Interest Only basis for a period of 5 years, at a margin of 2% over Bank of England Base Rate.  

Case Study: Arc & Co secure £11.8m real estate loan for non-domicile client

Contact: 
Daire Dowling
Managing Director
Arc & Co. Private Finance   

T: +44 (0)20 3205 2196   
E: daire@arcandco.com

Client:  Non-resident, non-domicile private individual

Requirement:  Our client was looking to refinance 3 London-based properties valued at £9 million, £6 million and £3 million respectively and via a single lender on a dry loan basis and from 2 private banks.  All 3 properties were held via a British Virgin Island ownership structure, but for personal use, so were deemed ‘regulated’

Solution:  This deal presented two challenges. The first challenge was a lease on one of the properties being mixed, due to Grosvenor Estate issuing an amendment, but for just 1 square foot of the property. Also, the client’s income source being overseas and the majority in the family name.  Arc & Co overcame both challenges by paying 1 year’s interest on deposit, signing a High Net Worth Exemption statement and by providing a personal guarantee. This enabled our client to secure a 65% dry loan on a 5-year term with a 1.75% margin on the 3-month libor.

Finalist for 'Best Development Finance Broker of the Year'

We are delighted to be a finalist in the ‘Best Development Finance Broker of the Year ‘ category at the 2019 Business Moneyfacts Awards.

#businessmoneyfacts #developmentfinancing #propertyfinance

Julian King joins the Arc & Co. team

Julian is the latest addition to the structured finance team. Julian began his career in Real Estate after graduating from Oxford Brookes University working for a well known London estate in Knightsbridge. He then moved on to follow his passion into development establishing a successful career as a Land Buyer. Julian purchased sites across multiple asset classes including Residential, Commercial, Retail, Retirement and Student Accommodation. More Recently, Julian has advised National clients on recruiting land personnel to bolster their land teams regionally. Julian Joins Arc & Co. bringing with him Development experience, to advise his clients on achieving the most efficient, tailored finance solutions for them and their businesses.

To connect with Julian, drop him an email at julian@arcandco.com

Arc & Co. Secures Extra Time for Bridging Client

Time was of the essence for Jamie Rigby of Arc & Co. to arrange mortgage funding on several houses for his client in Leicestershire. 

Jamie Rigby’s client had gained planning permission for several houses to be built within the extensive grounds of their current home. The client planned to sell the plots to a local builder, but when the builder pulled out of the deal at the last moment, this left Jamie’s client with a bridging loan that was about to expire.

“My client was concerned that he had to find another buyer within such a short space of time before his bridging finance ran out”, Jamie comments. “We needed to extricate my client from the bridging finance and secure some longer term funding. However, whilst still an active businessman, he was of pensionable age, which can often be a stumbling block to some lenders when looking at a more conventional lend.”  

Well aware that lenders can often be initially keen to do the deal yet change their mind further into the process, Jamie was keen to avoid such a situation given the short time frame before his client’s funding ran out.

“We worked closely with a smaller lender who was able to consider our case and work with the extensive due diligence we had prepared”, Jamie states. “We managed to obtain funding based on the strength of the client, which resulted in an additional 3 year term and at a rate of 2.99%”. The client was relieved, and this now allows the plots to be properly re-marketed for another buyer.

To arrange an appointment with Jamie at Arc & Co.’s Oxfordshire office please find his contact details below:

Jamie Rigby
Arc & Co. Private Client
Financial Consultant
Office: +44 (0) 1295 793170
Mob: +44 (0) 783 394 2392
Email: jamie@arcandco.com 

Arc & Co. quickly secures mortgage for purchase of derelict Cotswold property

Time was of the essence for Jamie Rigby of Arc & Co. to arrange mortgage funding on a complex property in the Cotswolds. Jamie’s client had agreed to purchase a derelict property together with adjoining farmland, and there were pressures upon the client to complete the purchase quickly. 

“Derelict properties are difficult to fund due to a number of the larger mortgage lenders shying away from uninhabitable properties or properties with development risk”, Jamie comments on the scenario. “In this particular situation, the property also included an agricultural element and so was arguably mixed use, which can be another barrier for some lenders. Given the timing pressures in addition it was important to get our approach to a lender right first time, ensuring that all potential concerns were addressed prior to bank presentation”. 

Jamie’s excellent local professional relationships came in to their own. “Understanding the bank processes meant that I had to anticipate the hurdles leading up to a concrete mortgage offer. I worked closely with a local valuer, making a formal inspection of the property ahead of instruction” Jamie explains. “This meant that by the time the bank was able to formally instruct the valuer, a draft report was already prepared, shaving days off the lead time. The choice of Solicitor is paramount when deadlines are tight and so I introduced my client to a Solicitor who I knew would be able to handle the conveyance within the time-frame. All this meant that from the formal application we had a fully credit backed mortgage offer together with completed valuation report within 6 working days. For me, it really highlights the need have the right professionals on the job.”

The client was absolutely delighted with Jamie’s hard work, commenting “all professionals worked hard on our behalf but Jamie really was the driving force here”. 

To arrange an appointment with Jamie at Arc & Co.’s Oxfordshire office please find his contact details below:

Jamie Rigby
Arc & Co. Private Client
Financial Consultant
Office: +44 (0) 1295 793170
Mob: +44 (0) 783 394 2392
Email: jamie@arcandco.com 

Arc & Co. Advise on the Finance of a Bombardier Global 5000

With a heritage dating back to the very first business jet, Bombardier Business Aircraft has at its core a forward looking, innovative spirit that is embodied by its people and the aircraft they have proudly manufactured, sold and supported over the last 50 years. It has been a pleasure to advise our client on the finance of a 10 year old Bombardier 5000. Despite the aircraft’s age, we were still able to arrange an asset only loan with no private bank connection. See below for an overview of the deal.

Client Location: Eastern Europe
Year: 2008
Loan: 10m USD
LTV: 75%
Term: 5 years
Amortisation: 50%
Ownership Structure: Maltese SPV
Rate: 4.25% all in
Deal structure: Asset only no Private bank connection

stock image courtesy of Bombardier

If you require advice on an upcoming purchase please get in touch with Gary Crichlow on the details below:

Tel: +44 (0) 20 3205 2128
Mobile: +44 (0) 77 951 28041
Email: gary@arcandco.com

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

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

Arc & Co.'s Quarterly Report

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%.”

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.

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.”

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.”

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.

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

Case Study – How To Mortgage A £14m Property With No Income

Calculating how much a client could borrow to finance a property used to be very simple.  Lenders would offer between 4 or 5 times their annual salary subject to the loan to value ratio.  Today calculating how much someone can borrow is a little more complicated with many different criteria being used to determine affordability.  At Arc & Co. our clients range from first time buyers through to high net worth individuals whose income is derived from multiple countries and in multiple forms.  A recent client fell into the latter category who was wanting to finance a £14m property in near Hyde Park, a prime central London location whose past residents include Sir Winston Churchill and the Earl of Mansfield.

Daire Dowling, Managing Director of Arc & Co. Private Finance, explains why the deal was so complex; “The client wished to raise £4m on a £14m property near Hyde Park after taking tax advice from their accountant.  The client didn’t have a traditional income stream, so we had to capitalise an investment portfolio in the background and put interest on account.  The main motivation for the client was to cut down on remitted income into the UK from overseas and to generate clean capital within the UK jurisdiction for living expenses and succession planning. We were able to achieve all of this.”

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Finance summary

• Loan: £4m

• Term: 5 year (interest only)

• Rate: 1.75% margin on 3 month libor

• Termination: No early repayment charge should the client decide to sell or pay down the loan for flexibility

If you would like to speak to an advisor about a property purchase or remortgage then please get in touch with the following link.