Bridging lenders capitalise on market situation

London based real estate bridging financier Montello has issued its latest quarterly investor report for the Montello Income Fund (for the period ending July 31).

The report shows that while global markets remain volatile, the conditions in the current UK mortgage market are allowing established bridging lenders to capitalise on the market situation.

The report points to the recent woes throughout the Eurozone, the US debt ceiling crisis, and the IMF’s outlook on the UK economy, and contrasts this with signs that the UK mortgage market is ‘stabilising’.

Furthermore, the core geographical focus area for the Fund (being the London residential property market) remains very strong.

The huge volume of potential deal-flow that Montello is seeing has allowed them to construct a very conservative short term bridging loan portfolio for the Fund.

The report reveals some of its current statistics as follows:

- Return to investors of 8.5% per annum;

- Average LTV across the Fund’s portfolio at a very conservative 51%;

- 82% of the Fund is lent against property located in London;

- 81% of the Fund is lent against residential property.

Christian Faes, Managing Director at Montello, comments that:

“The current market situation, has meant that we continue to see a huge volume of borrowers that are being let down by the high street banks. As a result bridging finance has moved to the mainstream.

"This has allowed us to lend to very high quality borrower against prime property in London, providing investors with a superior risk adjusted return.”