Cover story
in short-term lending is particularly attractive. “Competition is healthy and we
welcome it,” says Nicholas. “All it does is make us more focused on the market. Bring it on. “A lot of new entrants are
competing on price. We have to make sure we can compete with those lenders, many of which are very keen on taking market share.” Lewis adds that increasing
numbers of lenders is a good thing if they’re focused on the market long term. “You don’t want to see lenders
coming into the market to make a quick buck,” he says. “That’s going to have a negative impact on the sector. “We want to see lenders
interested in the market for a longer period of time. obviously we welcome those sorts of lenders in because they’re going to invest a lot of time and effort in improving the sector.” The focus on cheap loans is often
used as evidence of “fly by night” lenders trying to grab deals quickly. “It’s not actually about rate in
this market,” says Lewis. “You have to think more broadly about whether you’re doing the right kind of deal, about common sense underwriting.” Nicholas agrees that bigger and
more professional lenders coming in is a good thing for the market as it can help change people’s perceptions about bridging more widely. But Tiuta is not necessarily keen
to join the rate wars that some other lenders are engaging in. “I can understand the logic of a
new lender coming into the market and competing on price but we are confident enough in our client base that we wouldn’t do that,” says Nicholas. “I don’t think it will drag rates
down across the market either. We can’t talk for other lenders but there’s no strain on us at this moment to enter into a lower rate.” Typically Tiuta’s rates are 1.25%
to 1.5% with a 1% arrangement fee on a first charge product. Second charge rates are a bit higher in line with other lenders. As a general rule, Lewis says they will charge
“Competition is healthy and we welcome it. All it does is make us more focused on the market. Bring it on. A lot of new entrants are competing on price. We have to make sure we can compete with those lenders, many of which are very keen on taking market share”
30 BrIDGING INTroDuCer september 2011
the client 2% on the deal, keep 1% and pay away the other 1% to the broker. “The market seems to have
settled at that rate for years and we have no intention of increasing the rate or reducing it either,” adds Nicholas. Lewis adds that lower rates can
be a ploy and are not delivered in reality. “What you have to be aware of is
new entrants coming to the market and saying they’ll do rates of 0.75% at sub 50% loan to value - how many of those deals are there? “If you were to average out all
the loans done over time you’ll find the LTV average is much nearer the top end. It has a nice positive marketing spin on it. It’s called a headline rate for a reason.” rather Tiuta is about service,
products that serve customer need and being easy and friendly to deal with. “openness and an ability to be
available at all times of the day is what we’re about,” he explains. “We want to keep our market share and we think service is the way to do that.” Nicholas says this strategy
is deliberate. “We looked at diversifying into other products but there is so much business for us in bridging – it’s what we like, what we know and what we plan to keep doing.” Bridging is one of those monikers
that can cover a range of things though and Nicholas acknowledges Tiuta is “heavily into development finance”. Some other pure bridgers shy
away from this scale of finance but it’s been Tiuta’s business from day one. Lewis explains. “We fill a gap
for investors and developers that maybe don’t have the serial, large scale experience of commercial developments but do know what they’re doing.” Deals range from the conversion
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