The word blockchain is rapidly taking hold in the modern vocabulary, particularly in a business setting. The average person, if they do not particularly know the meaning, will at least recognise the term from the many headlines on a variety of news sites. The meaning of the word, however, should become common knowledge for the average citizen, not just a recognisable word.

Blockchain constitutes a valuable advancement of technology that could become indispensable in the business world, particularly in the method of transactions, in the coming years. The property industry is no exception to this wave of blockchain. Indeed, a handful of national governments have begun taking steps to implement blockchain in their operations. Given the rising popularity of blockchain, it is important to understand the basics.

Blockchain basics

To put it simply, a blockchain is a database that is spread out through several different servers or computers and is comprised of multiple sets of blocks. These are secured by cryptography within the chain, hence the name blockchain. Each block is preserved as a new block is added, making a permanent and unchangeable set of data. This helps to secure transactions and prevent manipulation. This also creates an easy-to-verify public database to create full transparency. The encryption process involved in blockchain makes it difficult to add incorrect documents or information; implementing a cryptographic key to add a new block

This idea dates back to 1976, at which time it was proposed in a research paper. However, few took the idea seriously at the time. It was then thought of as far too complicated and entirely insecure. In 2008, though, a change took place, setting the stage for the introduction of cryptocurrency via Bitcoin. The implementation of blockchain in this new concept showcased the security and effectiveness of the idea. In the area of cryptocurrency, blockchain has been essential to the growth of the industry and its overall success.

Why use it on property?

The use of blockchain gives the property industry a method to increase both the speed and efficiency of the transaction process. The transaction takes place in an open-source, peer-to-peer network across numerous servers. Validation is done by the network, and a block is immutably attached to the chain. This eliminates fraud, as all information is fixed in the network.

Making fraudulent transactions nearly impossible now eliminates any possibility of record manipulation. This would go a long way towards taking out a massive estimated mortgage fraud of around $1 billion a year.

The sort of security blockchain would offer would all but eliminate any need to worry about the lender being cheated or manipulated. Furthermore, the current process is often extremely complicated and lengthy, creating a daunting task for all those involved. With blockchain, however, the entire process could be entirely reduced to a mere matter of seconds or less, rather than hours or days.

With the outdated state of the many systems in the property industry, a transparent upgrade like blockchain would be a massive breath of fresh air. Not only that, but the implementation of blockchain would also create an allowance for greater accountability and even greater social impact. Furthermore, transactions are incredibly simple to trace in blockchain, requiring one to only trace the ledger to find the transaction. Blockchain also takes out any requirement for a third party for security. The encryption component of blockchain allows a variety of parties to agree on certain rules and facts. The system then easily allows anyone to check and ensure the accuracy of the rules in the database. Thus, the danger of false statements being made or previous statements being altered is eliminated.

Blockchain is an exciting new system of technology that is growing in popularity. Many industries are already seeing the value of such technology and implementing it as soon as possible. The property industry should act quickly so as not to be left in the dust with an archaic system of transactions and verification.

If you have a million pounds to devote to repurposing a property, then you can do amazing things. These properties that are spread across the world are perfect for the people who live in them. Here are four multi-million pound house conversions.

Scottish Isle of Coll castle becomes a mansion

The mansion on the Scottish Isle of Coll was abandoned for over 150 years before a mansion was built between its crumbling walls. The new home features floor-to-ceiling windows, allowing those living in the home to enjoy awesome views of the breaking waters hitting cliffs located just outside the door. Entertaining is easy in the large open living room, while there are plenty of secluded spots to have a quiet conversation or some solitude. This Hebridean island home has been revitalised with all the latest technology and security while retaining much of its original history.

Budapest weapons factory becomes an art studio and home

A former weapons factory originally constructed between 1913 and 1915 and located in the south part of Budapest is now a home and gallery. The bottom level of the four-story home is a designated workspace and has a guest bedroom, while the second floor contains bedrooms and bathrooms. A short trip up to the next level reveals an open living space with room to relax and a spacious cooking area. The top floor contains an elaborate fitness area, sauna, and pool with easy access to a rooftop terrace. Known as Loft 19, this property maintains much of its concrete and industrial vibe throughout.

Salvation army barracks in Australia

The first Salvation Army barracks in Australia lay deserted for many years before it was repurposed into a mansion. While it costs many pounds to do the transformation, the building is one that anyone would proudly call home. Since the building featured 28-foot-tall ceilings, a menagerie level was added to serve as the bedrooms and bathrooms. While this home has many modern features, tribute was paid to the building’s original purpose by leaving the original walls and signs throughout the home. One reason that this home cost over a million pounds to convert is that the floor is made of a single slab of yellow sandstone imported directly from Portugal.

The old ambulance station becomes a minimalist home

Sitting within a walled compound, a St. John’s Rye, England, four-story home was once an ambulance garage for two ambulances. The home features a minimalistic design, and its current owners love the large open space for entertaining guests. While the owners intend to use it as a summer home, the main feature of the open living space is a double-sided wood burner. Exposed timbers throughout the home help maintain its minimalistic appearance.

If you had a million pounds, then you could do a lot to restore a property. Consider these possibilities before starting on your own project.

As typical bank loans become more difficult to assess, bridging loans are increasingly becoming the go-to option for not just people but also businesses that are in quick need of cash.

Initially, a bridging loan was simply a temporary or short-term loan used by homeowners to get quick cash to facilitate the purchase of a new home. The loan operated by “bridging the gap” between a homebuyer’s new mortgage and the sale price of a new home in the event the homebuyer hasn’t yet raised funds by selling his or her current home. Such a bridging loan would be secured on the buyer’s current and yet unsold home, while the loaned sum is used as a down payment on the new home. But over the years and due to its increasing popularity, bridging loans have evolved into a more versatile financing option.

As of 2018, individuals and businesses alike have found other ways to make the most of bridging loans. Below, we’ll be looking at the top five ways individuals and companies will use bridging loans in 2018.

How individuals are using bridging loans in 2018:

1. To avoid repossession: For homeowners who lack the financial capability to stave off a repossession, bridging loans have become a saving grace that can be accessed quickly and used to settle debts. If debts are piling up and there is no immediate cash source available, a bridging loan can be used to quickly settle a portion of the debt for the short term and thus delay a repossession.
2. To buy a property at auction: If a wonderful property at a great price is suddenly made available at an auction, instead of letting the opportunity pass by, a bridging loan can be used to finance the purchase of the auctioned property. It can also be used to snatch a repossession and grab a bargain.
3. Property development purchases: If you need to renovate or upgrade your property and you require quick cash, a typical bank loan might take a long time to get approved or might not even be approved at all. A bridging loan, on the other hand, can be applied for quickly and received within a few days. The loaned sum can then be used to convert your home, refurbish it, or even extend it.
4. To buy time to seek a longer-term loan provider: If you need money fast for a pressing matter, you can use a bridging loan to finance yourself for the time being until you are able to get a longer-term loan provider. This move can be an expensive one, especially in light of the cost of bridging loans, but it can also be a fast and effective solution to a pressing financial need.
5. For capturing an investment opportunity: Opportunities are unpredictable and can pop up at any moment, including moments when you lack the financial capability to grab the opportunity and make the best of it. But instead of letting the opportunity pass you by due to a lack of funds, you can grab a bridging loan and use it to seize the investment opportunity. This tactic can be used to change the financial fortune of anyone who is presented with an especially favourable investment opportunity.

These are just some of the ways people are currently making the best of bridging loans.

How businesses are using bridging loans in 2018

It’s not just individuals that are making the best of bridging loans, as businesses have also found ways to use the fast and easy option to their benefit.

Some of the ways companies are presently utilising bridging loans include:

1. For grabbing business opportunities: In the world of business, time is of the essence, and the ability to make split-second financial decisions can make the difference between a huge profit and a great opportunity lost. Rather than being restricted in investment opportunities due to a shortage of funds, bridging loans provide an avenue for businesses to get loans fast and make financial commitments to sudden and exciting new opportunities. A bridging loan can be used to finance the buying or starting of a new venture or to acquire another business in a strategic corporate move. This is possible thanks to the fact that a bridging loan can be accessed within a few days instead of the lengthy time periods required for approval of traditional loans.
2. For enlarging commercial operations: A business that’s looking to expand its operations into new locations or diversify its business can use the finances from a bridging loan to accomplish this quickly. Such a loan can also be used to purchase new equipment and serve as regular funding to accomplish new business objectives.
3. For refurbishments: An office refurbishment might be long overdue, but a company is unable to carry it out due to financial constraints. A bridging loan can take away such constraints by offering some quick financing to fix up either the office area or give the retail space a facelift. A benefit of this is that the loan can be repaid when the business premises are remortgaged after the refurbishment has boosted the value of the premises.
4. Refinancing owed debt: In the event there is a short-term cash flow crisis that leads to debt, a bridging loan can help pay it off or buy more time until the business can get its affairs in order. Also, refinancing can aid in consolidating existing debts into a single entity, which is much easier to manage. The loaned sum can be used to pay off lenders or settle outstanding payments to key providers and suppliers.
5. For relocation: If your business is looking to move to a better location in 2018 that will expose it to greater opportunities, bridging finance can help facilitate the relocation by providing the cash you need to purchase a new business space. It’ll also make available cash for expenses such as purchasing new furniture, setting up a new IT infrastructure, removals, and much more.

So rather than restrict yourself to the arduous process of applying for a traditional loan, try out a bridging loan for faster access to needed funds as well as a less strenuous loan application process.

Now more than ever, borrowers and financial service providers alike are exploring the possibilities alternative lending brings to the table. As businesses and the public in general continue to shun conventional banks and lenders for more convenient and accessible alternatives, those with an eye for opportunity are refusing to allow this unique shift to pass them by.

Jason Oakley, former managing director of commercial banking and mortgages at Metro Bank, is preparing to launch a new specialist lending service as an alternative to mainstream banks and conventional lending channels. Owned and operated by City of London Group (COLG), the new lender is scheduled to begin operating by the end of 2019 and is awaiting the issue of its banking licence.

Taking a sizeable step away from conventional lending, the new company is set to focus primarily on commercial lending, SME, bridging, and development finance sectors.

The former MD of commercial banking at Alliance & Leicester/Santander, Bryce Glover, has joined forces with Mr. Oakley on the venture, the pair having invested £50,000 and £400,000, respectively, in the new business.

At the same time, Credit Asset Management Limited (CAML) has taken its first steps towards the establishment of a new business line known as Property & Funding Solutions (PFS), which is being created to provide commercial development and bridging finance, along with secured lending for current clients of CAML.

“I am delighted that our banking licence application will shortly be under way,” commented chief executive officer Michael Goldstein.

“We are also in the process of establishing our new business line in property bridging funding under the existing CAML business, and our re-launch of the Milton Holmes equity release business may be achieved more quickly than originally envisaged.”

“Overall, the future is looking bright with a strong leadership team in place to deliver on all our strategic objectives.”

While optimism within the group remains high, external critics have suggested that entering the bridging loan market as it exists today may prove difficult. The reason being that, on the back of unprecedented demand for such products among commercial and private borrowers alike, the market has become extremely congested with alternative and independent lenders of every shape and size. It’s been argued that entering such a crowded market could represent an inadvisable decision, unless the lender in question has something specific and unique to offer in terms of value.

Given the ongoing performance and financial stability of COLG, it’s entirely possible that the new bridging business will have every capacity to bring its own unique value proposition to the table for commercial borrowers across the UK.

Delays and difficulties associated with conventional mortgages and business loans are driving borrowers away from alternative lenders in growing numbers. With alternative options available, borrowers are no longer willing to jump through hoops and accept extraordinary delays, simply to get their hands on the finances they need.

The market may be crowded, but in terms of overall demand and relevance, there’s technically never been a better time to explore the unique possibilities presented by intelligent financial service provision.

It’s usually not until you make the decision to apply for a bridging loan that you discover just how many different types of bridging loans there are. Commercial loans, residential loans, second-charge bridging loans, and so on. Not to mention the often misunderstood concept of “open” and “closed” bridging loans.

Nevertheless, it is important to understand the key differences between the two if you are looking to take out a bridging loan for absolutely any purpose.

Closed bridge

In the simplest of terms, a closed bridging loan indicates a transaction where the borrower establishes a planned and defined exit strategy before the loan has even been taken out. Or, to put it another way, the borrower knows exactly when and how the funds will become available to repay the balance of the loan, in accordance with the requirements established during the application. In most instances, bridging lenders insist on knowing exactly when and how the balance of the loan will be repaid; hence, most bridging loans are considered closed bridges.

Open bridge

By contrast, some lenders are happy to offer somewhat more accommodating loans in the form of open-bridging loans. In this instance, the borrower is not able to provide a concrete repayment roadmap, usually because the funds are in very short supply. As such, they may have had insufficient time to think carefully about the specifics of the repayment aspect.

In terms of when open bridging loans are provided, it could be that the borrower already has some kind of strong working relationship with the lender or that their track record, in general, is one of flawless reliability. It could also be that the borrower has every intention of paying back the bridging loan when the property being financed is subsequently sold. They cannot provide an exact date or comprehensive overview of their repayment plans, but they nonetheless have a viable exit strategy. If the lender is confident that the borrower can repay the loan successfully, they may be willing to offer an open bridging loan.

Alternative bridging options

If bridging loans in general don’t represent an appealing or viable option, there are alternatives available. Examples include short-term asset finance, standard overdraft facilities, and so on.

In the case of short-term asset finance, it’s essentially a case of arranging secured loans by providing the required collateral. From jewellery to luxury cars to paintings to property to business assets and so on, just as long as you have assets to the required loan value, it is relatively easy to gain access to the funding you require. The application process can be comparatively simple, and interest rates and borrowing costs are typically flexible, depending on the lender you go to.

As for overdrafts and the use of general personal credit facilities, it isn’t generally recommended to fund major projects or purchases this way. The reason is that, as they’re not specifically designed for these kinds of purposes, they have a tendency to be both restrictive and expensive.

If you’re looking to explore the various options available to you, it’s advisable to speak to an independent broker with a wide-reaching network of mainstream and independent lenders.

For more information on any aspect of conventional or alternative financial products, get in touch with the BridgingLoans.co.uk customer support team today.

Earlier this year, the introduction of new anti-money laundering legislation made it a legal requirement for estate agents to keep an eye out for the use of ‘dirty money’ by clients looking to purchase properties. However, the legislation was rushed in to such an extent that many estate agents are still entirely unsure as to what they should be doing and how they should be doing it.

The Fourth EU Anti-Money Laundering Directive came into effect on June 26 with relatively little fanfare. The idea being that the EU wanted estate agents to play a more active role in the detection and prevention of money laundering activities taking place across the UK property industry. But for reasons that haven’t been (and perhaps never will be) explained, the usual 21-day window prior to the legislation being implemented didn’t happen. Instead, estate agents were given just 24 hours to get on-board with the legislation.
Which was, suffice to say, nowhere near long enough.

As it’s an EU-wide measure, it’s been a case of individual governments ironing out their own policies to ensure compliance. And as the UK remains a member of the EU for the time being at least, it’s now a fully enforced UK law too.

The problem being that many estate agents have, quite understandably, interpreted the whole thing as a huge burden and additional responsibility they may struggle to cope with. In reality, economists and experts have stated outright that there’s no reason for panic whatsoever. And nor do most estate agents need to take any kind of drastic action, or even alter their typical operating methods to a significant degree.

Instead, the new legislation is being pushed as an opportunity for estate agents to take their overall compliance and diligence to a higher level – predominantly through common sense and logic. The only real difference being that estate agents will now be required to ask a series of more probing and intrusive questions than before, to identify any signs of suspicious behaviour or potentially illegal financial activity.

Which for the time being may come across as awkward and difficult, though will eventually become second nature. A standard part of the process for thousands of estate agents all over the country. Questions will need to be asked regarding savings and debts, financial commitments, salary/income and so on. Just as banks are required to both note and report any signs of suspicious activity, it’s simply the same being brought over to estate agents. With such vast sums of dirty money already being tied up and laundered in the UK property market, the time has apparently come to clamp down on its prevalence.

Not just here, but across the UK in general.

Whether the legislation sticks or remains in its current form when the UK leaves the EU in a few years remains to be seen. For the time being though, estate agents have little choice but to get on-board with the new rules.

For more information on alternative, intelligent financial solutions for property purchases and investments, get in touch with the UK Property Finance team today.

The wholesale loan industry is a subject that raises quite a lot of controversy in the finance sector, with many brokers and lending facilities taking a completely opposite stance to one another whenever the issue is raised. This is particularly true where the actual value of wholesale lending is concerned. Nonetheless, the sale of such products has a number of rather unique advantages on offer, both for the lenders themselves and for those seeking to borrow.

What are wholesale loans?

Broken down to the simplest level, a wholesale loan is an affordable, modern-day lending product that allows the consumer to borrow money at specially adjusted wholesale rates. However, this is only the general theory, as the actual interest rates that are charged will vary considerably from one lender to the next.

To understand how the wholesale lending sector works, we need to consider a working example. In a typical scenario, a wholesale loan broker will acquire funds from a principal lender at wholesale rates and then pass those funds on to a consumer at their own interest rates while applying any additional fees that are required to cover the costs of handling and processing the finances in question. When the consumer repays the loan, the wholesale lender is then responsible for paying the capital back to the investor who provided the funds at the beginning, along with any accrued interest.

Why is wholesale lending becoming such an attractive option?

There are basically two driving forces behind the popularity of wholesale loans, which need to be clarified before the layperson can fully understand precisely why these products look set to stay. In the initial instance, the main investor has a lot to gain from the practice of wholesale lending, as the returns are typically much better than other investment options with similarly low risks. Although these returns may vary considerably from one deal to the next, the rewards are reliable and usually quite profitable.

Secondly, as briefly mentioned in the first point, wholesale lending is comparatively risk-free. This is because wholesale loans are generally packaged as secured borrowing products. By offering wholesale lending products as secured loans, the investor can relax in the knowledge that their funds are safe, as the wholesale lender can always retrieve any unpaid funds by means of selling the borrower’s assets should they default on the borrowing agreement.

Owing to the fact that wholesale loans are secured, they can even be offered to those with less-than-desirable credit histories and those in other potentially high-risk categories, such as the self-employed or commercial loan applicants who are unable to demonstrate a suitable level of financial performance. As a result, this ensures that demand for this particular loan type remains high.

If you would like to find out more about secured loan products, from wholesale borrowing options and commercial loans to mortgages and bridging loans, then please contact UK Property Finance today.