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People are often surprised to find that High Net Worth (HNW) and affluent clients struggle to access credit. Between ten and twenty percent of HNW in the United Kingdom struggle with access to loans. The main drivers behind this are irregular income, lack of credit, and bank regulations. Wealth often comes from assets and businesses, not income, which is often the main measure used by high street banks. For this reason, traditional lending and fast lending like Property Bridging, is often not available to HNW and affluent clients. On top of this, as clients, they expect high levels of service so dedicated lenders and brokers have emerged to meet the bridging needs of the wealthy.
Starting at the beginning, with the brokers, in order to work with their clients, many maintain offices in desirable locations such as Mayfair, City of London, Oxford. They also maintain staff with experience and a focus on providing high levels of customer service. This is not simply a matter of responding quickly to emails or always having a phone handy but a broker must be able to understand their client’s complex portfolio not only of properties, but also how to truly measure their wealth. Most property lending requires affordability checks, and is often up to the broker to demonstrate a client has the means to repay a loan. While this is standard for all bridging loans, in cases where a client keeps most of their money in a stock portfolio or reinvests it in their business, it is often difficult to clearly demonstrate liquid wealth. The broker must be able to explain to the lender both their client’s needs and their ability to repay the money they borrow.
The lender, like the brokers, must be able to understand similar structures. For instance, if a client holds their wealth in a private company, then a lender must be able to get comfort with this structure in order not to hold up the process overall. One of the key ways this can be done, is by offering direct access between the underwriting team and brokers. This enables the lender to understand a client’s needs and financial profile quickly, and get any questions answered as soon as possible to keep thing moving. Once a lender has established comfort with the client and their property, then the lending offer must also fit the client’s needs.
HNW and affluent clients often require larger loan amounts than average loans – the average mortgage size for properties valued between £1,000,000 and £2,000,000 is over £400,000 – compared with a UK average of £85,000. This means that the lender needs to be able fund large loan amounts quickly and frequently. Borro has seen many cases where a lender decides at the last minute that they are uncomfortable with the size of loan requested and the client’s financial profile. Providing high loan amounts to clients with irregular credit simply isn’t for everyone.
Finally, a lender needs to be able to provide flexibility even if their initial solution is not enough for the client. This is where Borro comes into its element. Our luxury asset bridging loans make it simple for clients to top up borrowing, especially for HNW and affluent clients, who may hold sizeable amounts of wealth in luxury assets and property. We allow clients who are unable to get all the money they need from their property to borrow against another asset in their portfolio. This ensures clients have the smoothest experience possible and allows Borro to provide a solution even in the most complex cases.
It’s that time of year again. The sun is coming out after months of hibernation. And even though this article is far more suited to the States than it is the British Isles I call home, I’ll play ball just for the sake of it.
So how does the spike in temperature affect the selection of which watch to wear? Summer fashions are obviously far more casual than your winter wardrobe, and so the choice will almost certainly reflect that, but there a few more practical things that I would suggest you look for.
Image supplied, courtesy of Omega
This one is obvious, so I won’t spend too long discussing it. Despite the summer months being the driest of the year, you are never more likely to be suddenly doused by a bucket of water, or pushed into a swimming pool. Nor is it common for people to dive into the med in mid-November. It makes sense that you’d choose a watch with at least 100m water resistance. Anything less is really not worth looking at. Remember, if a watch is going to leak, it is more likely to leak in the first few inches of submersion, when the external pressure is not great enough to compact the case components (which closes the tiny gaps between the gaskets and the metal). Additionally, watches leak more in hot weather due to material expansion (again, those gaps between the metal and the gaskets increase), so pick something with some deep sea credibility if you want to be on time when autumn rolls around.
Image supplied, courtesy of Bell & Ross
This is one that I imagine will raise a few eyebrows, but bear with me here. In the summer months you are likely to wear shorter sleeves and less jewellery. This places the emphasis on the case material, or, more pertinently, case colour coordinating with your skin tone, rather than your cuff links, shirt studs, belt buckle, or tie pin. If you are a proficient tanner, you might want to stay away from warmer case colours like rose gold or bronze. Steel looks great against bronzed skin, and is a far sportier choice, but it has one significant drawback – it is very heavy. For that reason, you might find a brushed titanium case being the best choice for these more active months. Failing that, you might even invest in a plastic or polymer housing if you’re too scared to wear a luxury piece on the beach or by the pool. And that leads me to my next point.
Image supplied, courtesy of Richard Mille
That exclamation point is there for a reason: Summer is when we’re all allowed to go a little crazy (blame it on the heatstroke). While plastic is not exactly a luxury option, it does know how to make use of wild and wacky colours. But vibrant greens, shocking yellows, and eye-blitzing blues need not be the reserve of low-end watches. Just look at Richard Mille or Hublot for examples of how a luxury watchmaking company can exploit colour to its advantage! Hublot is the butt of many a joke, but I find it hard to deny the presence and pop of a Big Bang Unico, dangling on the wrist of some tight t-shirt wearing Adonis as he strolls about the deck of his yacht. When you consider the price tag, it suddenly makes sense why Hublot make their watches so big (it’s so you can see them from the shore as you lust over that yacht).
Image supplied courtesy of Perlon
Strap Material and Style
Steel bracelets are way too weighty for the summer months; the lifespan of leather is greatly reduced when forced to contend with a perennially perspiring wrist. I’m a huge fan of rubber straps at the best of times, but my actual pick for the summer is a thin, nylon NATO. These straps are affordable, colourful, absorbent, and prevent any metal from coming into contact with the skin. You have loads of vogue options for temporary summer straps (such as Perlon), and it’s never been more acceptable to wear your Rolex Explorer (a great summer watch when chosen with the white dial to balance that tan) with a stripy NATO. Nylon dries pretty quickly too, and straps like the Perlon can be incrementally adjusted to fit any wrist thanks to their ‘punch-it-through’ buckle. Perfect for this time of year when heat expansion must be considered.
About the Author
Rob Nudds is a WOSTEP qualified watchmaker, working as a consultant in the UK market. You can read more of his work on aBlogtoWatch.com.
6:30 Early Start for £200k Art Enquiry
My day starts with a gym session at 6.30am. I train for an hour and get into the office around 8.30am. Coffee, then my day begins. Last night I received a call from a brokerage asking whether £200,000 could be raised against a collection of Contemporary artworks within two days, so we are already exchanging e-mails getting the ball rolling on that.
9:00 Strategising with Marketing
I check e-mails, answer urgent enquires and I have a quick catch up with our marketing team. We have a white label email going to a packager’s database this week so we need to finalise the copy. I find marketing through partners’ databases is a great way promote our services to brokers and intermediaries, so I wanted to sort this one out first thing.
10:30 Discussing Acquisition Financing in Mayfair
I have a 10.30 am in Mayfair. First stop is an Art Advisory at you guessed it, the Arts Club. We arranged a meeting a couple of weeks ago to discuss helping their clients finance purchases during Frieze London.
11:20 Meeting with Brokerage About Art Enquiry
I head into Bond Street to meet the brokerage whose client requires funding. With a focus on HNW and non-dom clients, the firm’s clients often find themselves unable to get funding from traditional sources in the UK, and so rely on their investments in property and luxury assets to provide liquidity. The collection consists of three contemporary pieces kept at their home just outside London, we arrange to meet the client that afternoon.
12:15 Beginning Art Loan Estimation
By 12:15 I was back at the office working with our Head of Sales, Claire, and Valuation Director, Sam, to arrange the fastest and simplest way to get an offer to the end client. The brokers had been able to provide good details on the collection, so while our Valuation department worked on estimating the loan we began initial conversations with the client.
13:00 Journey to Surrey for Client Meeting
On the train and on our way to Surrey by 1pm. We have had provenance through on the art from the client and our external expert in the field is awaiting photos from Borro to begin analysing the collection.
14:00 In-Home Valuation
We arrive at the client’s home just after 2pm. Sam begins examining the works while the client and I discuss the process and answer any questions the client has. We always prefer being able to speak to the client face to face makes them feel more comfortable with our services.
16:00 Provisional Values Received
Back in London, our specialists had come back with provisional values. Based on the descriptions the client provided we could offer between £500,000 and £600,000. The range was based on the condition of the pieces in the collection. Personally seeing the collection and having the documentation on hand was key to the speed of valuation.
16:15 Making Logistical Plans
We liaise with the client, and arrange for logistics to collect the items the next day. Our specialists arrange for a third party expert to visit the pieces just before collection and triple check authenticity and to give the green light. At the same time, our logistics team were ensuring our storage providers were ready for arrival.
18:00 Finalising Lending Contracts
Our team prepares the clients application and ready lending contracts. The underwriting team have worked really well to get things ready so quickly. We worked a little later than usual to ensure was ready for collection tomorrow. By 6.45 I am out the office and having a well-earned shandy!
This first edition of Tales of Terror published in 1899 brings together a series of supernatural fiction stories by Dick Donovan. At the PBFA’s London International Book Fair at the ILEC Conference Centre in SW6 on May 27-28 it is priced at £1750 by Jonathan Kearns Rare Books of London.
Back in 1958 when 28 members of the British Antiquarian Booksellers’ Association (ABA) were fudged together for a specialist fair in London, few anticipated what would soon follow. The ‘international’ rare book fair was born and equivalent events would soon follow in New York, California, Boston plus others in Europe – all destined to become annual fixtures on the book collecting calendar.
Canadian dealer Bernhard Lauser of Voyager Press Books will bring this archive of 77 propaganda documents to the ABA’s Olympia fair. Priced at £1570, the documents from 20 different counties mainly promote political and war ideologies, including communism and fascism, but also endorse and initiate women’s liberation, gender equality and peace campaigns from the 1940s to 1960s.
This year – when bibliographic anniversaries including the death of William Shakespeare abound – the London International Antiquarian Book Fair runs for the 59th time at the National Hall, Olympia from May 26-29. For the first time it comes under the marketing umbrella Rare Books London, a joint initiative with the Provincial Booksellers’ Fair Association (PBFA) whose own flagship event, the London International Book Fair is held concurrently at the ILEC Conference Centre in SW6 on May 27-28. The two events (united by a dedicated shuttle service) have a mood and a price point of their own but together they showcase just under 300 dealers in west London across three days.
Illuminated manuscripts owned by Belgian industrialist and collector Maurice Burrus (1882-1959) will be offered by Christie’s King Street on May 25. The undisputed highlight is this copy of the works of the French poet Alain Chartier (c.1386-c.1430) decorated in early 15th century Paris by the Dunois Master. It is expected to bring £1.5m-2.5m.
Nearby in the Olympia Suite of the Olympia Hilton hotel, new book and works on paper auctioneer Forum Auctions, launched only this month by key former members of London’s Bloomsbury Auctioneers, will introduce their brand and show items from forthcoming sales, while on May 25 Christie’s will conduct the sale of illuminated manuscripts from the collection of Belgian industrialist and politician Maurice Burrus (1882-1959).
Their whereabouts unknown for many years, these medieval survivors include a stellar copy of the works of French poet Alain Chartier (c.1386-c.1430) embellished by the Dunois Master, the leading painter of miniatures in Paris in the early 15th century. It is expected to bring £1.5m-2.5m.
There’s no doubt the book trade is changing. Launched in 1996 with the listings of just four bookstores, the giant online portal Antiquarian Book Exchange (AbeBooks now owned by Amazon) is 20 years old this year. Millions of out-of-print books are now available to click and collect.
The use of the internet to sell rare and collectable books has, in a matter of two decades, created a marketplace that would be scarcely recognisable to those 28 post-war London pioneers.
Well-suited to the search term, the trade in centuries of written thought and literature is arguably more customer-focused than ever before. However, even in the age of ‘Abe’ and Kindle, when dusty second-hand book stores are disappearing from British and American high streets, it is still predominantly at the fair and in the shop where dealers meet clients and establish the brand loyalty that can so often be lost when just another trader on a portal site.
The momentum surrounding Rare Books London underlines that new technology will not replace all the old ways.
About the Author
Roland Arkell (LinkedIn) is the Deputy Editor at ATG Media. For almost two decades, Roland has been writing about the British and international art and antiques market for Antiques Trade Gazette, the leading publication for serious buyers and sellers of art and antiques.
Founded in 1781 in Mitcham, Surrey, as a silk printing business by William Asprey, Asprey soon supplied goods to royal families and as of 2013 held a Royal Warrant of appointment from the Prince of Wales.
Asprey moved into their current location on New Bond Street in 1847. The company won its own royal warrant on the basis of its prize winning work at London’s International Exhibition, but lost out to its rivals, H.J. Cave & Sons in 1867.
Asprey creates luxury goods varying from jewellery to leather goods, silver and trophies. Diamond cutter Gabi Tolkowsky created the Asprey cut, incorporating the Asprey “A” inscription around the edges of the stone. The diamonds then have 61 facets and maximize light refraction within the stone.
In 1998 Asprey merged with Garrard but this partnership ended in 2002. In March 2006, Sciens Capital Management, the US private equity firm, bought Asprey. “This is a historic luxury brand, and that is part of our reason for acquiring it,” said chairman John Rigas.
With its Royal patronage, Asprey has gained international recognition and is known across the world for creating bespoke luxury items, from a pearl necklace for Queen Mary to five trunks commissioned by Maharajah of Patiala. Asprey, who designed the Heart of the Ocean in the film Titanic, is also featured in films such as Sherlock Homes, Match Point, My Week with Marilyn and many more.
Their master jewellers use only the finest and rarest precious stones. The Windsor collection features a distinct pattern in 18ct white gold and includes pavé diamonds and precious stones.
Estimated Value: Up to £20,000
Borro offers secure and flexible financing solutions for jewellery.
In the biggest shake-up of the mortgage market for years, mortgages on residential and semi commercial property to unincorporated entities may now be caught by regulation. The regulations stem from the EU Mortgage Credit Directive (MCD) and the new rules came into force in the UK on the 21st of March 2016.
Key changes include:
- Definition of a regulated loan no longer refers to a first charge on property
- For non-bridging mortgages, there is no longer a requirement for the borrower or a related person to occupy the property
- It is possible for a loan secured on less than 40% residential property to be regulated if it is not predominantly for business purposes
At first glance it sounds like the majority of lending will become regulated. However there are two key exceptions:
- Investment properties – where the funds are predominantly for business purpose and the site is occupied less than 40% by the borrower or a related person
- Buy To Let properties – a subset of investment property where the property is let but cannot be occupied at any time by the borrower or a related person, so long as it does not qualify as a Consumer Buy To Let.
A Consumer Buy To Let, a new term brought in for MCD, is where the borrower or related person has occupied the property at any time (since purchase if the property was bought by the borrower as opposed to inherited) and doesn’t have another Buy To Let. This captures the so called ‘accidental landlord’ – those who inherit or don’t sell when buying their next property.
All the complexity means that lenders will need to ask more questions and make sure they get the right declarations to avoid being caught out – you can only write loans covered by MCD regulation with specific permission from the FCA.
One of the reasons for this is that MCD loans must follow a very specific process. For instance, the Key Facts Illustration (KFI) has now been replaced by the European Standardised Information Sheet (ESIS). The ESIS means that now across the EU, all mortgage information documents will be presented in the same format. This will make it much simpler for Britons purchasing properties overseas to understand any loans they take out to finance the purchase.
After the ESIS, lenders issue a Binding Offer with a mandatory 7 day reflection period during which the offer can only be withdrawn in very limited circumstances. More importantly, the lender may not contact the borroBulkPresswer during the cooling off period. Fortunately, the borrower may waive their cooling-off period so it needn’t hold up completion.
As with any kind of regulatory change, it will be hard to assess the true impact of MCD until well after its implementation. Borrowers, brokers, and lenders have been focused on aligning their processes with the new rules. It is only once these new processes have been tested that we can assess whether MCD is a success.
Buy to lets have come into focus in the press a lot recently, is there anything special about them from a lending perspective?
Because a Buy to Let property provides a source of income, it’s a natural way to check that the buyer can afford to meet their monthly payments and pay back their loan. If the property does not provide enough rental income to support the amount the borrower needs then there is a problem. But in general, it can be seen as a great lending proposition which in turn creates a win / win situation for the client and lender alike.
That sounds very safe, are there any risks?
Of course, if the borrower does not actually have tenants in the property, then there is always the danger that they overestimate how much rental income the property can generate and personal income they will be able to earn. Although the rental market is very strong in the UK overall, it is important that we understand the borrower’s experience as a landlord and that they are aware of any associated risks such as void periods or health and safety.
What are some mistakes a new landlord might make?
Well a lot of it comes down to understanding legislations around tenants. If there is not a formal tenancy agreement in place this may cause problems if the property were to be repossessed. It may also be necessary for the landlord to check the UK residency rights of their tenant. A first time landlord may not have considered the recent cut in tax relief and stamp duty increase and may not be aware of the rental income cover of up to 145% of the monthly mortgage payment calculated by some lenders. Also, landlords must be registered appropriately, if they are not then there can be serious consequences for the property. There are various checks the council will want to carry out, such as fire safety, health and safety including a Housing Health and Safety Rating System, and ensuring the property meets HMO licence requirements, where appropriate.
What about an experienced landlord?
Probably the biggest issue a property can have is health and safety. If it is deemed that the landlord has not maintained the property adequately or if there is a specific issue like damp, then as a lender we would need to assess this carefully to consider whether the property is deemed suitable investment security and we may not want to be involved.
So overall, regulations are a big factor?
Yes, and with MCD, we now have to consider if they are an ‘Accidental Landlord.’ For instance, if they inherited the property and wish to rent out to provide an income, and in fact, if they have ever lived in it, then the loan will be regulated and must be written under MCD rules with FCA permission.
Do you have any advice for Buy to Let landlords considering bridging?
It’s all about the exit and it is imperative to ensure a solid AST agreement is in place and that the rental income is sufficient to cover any mortgage payment so that refinance can be arranged for a longer term loan or if exit is sale that realistically this can be achieved within the term.
Gumball 3000 is the ultimate car rally, run every May by its founder Maximillion Cooper. Since 1999 Maximillion has brought together celebrities, royalty, sports stars and racing drivers to take part in the real life ‘Whacky Races’. Except, there is no racing, there is no prize for coming first. But, there is the grand prize of ‘Spirit of the Gumball’ awarded to the team who have entered most into the true spirit of the event.
There have been many imitations since its inception, but today Gumball 3000 is the only rally you should consider doing. Yes it is expensive, £35,000 this year unless you have been a previous entrant, then it’s £30,000. But the Gumball experience is unrivalled and last weekend I headed over to Dublin to be a part of it.
Think of a car and it will have been on the rally at some point. The competition has gotten so fierce between the regulars that they build bespoke cars for the event. Team Galalg – the crowd favourites – entered a custom built Batman Tumbler based on a Lamborghini Gallardo and a recreation of an AMG GT3 called the TG3! Team Wolfpack leader Josh Cartu had been building a unique Ferrari for the rally but sadly it wasn’t ready in time so he brought along his Ferrari TDF – one of two on the event.
DJ Afrojack arrived with a Bentley Bentayga and a Lamborghini Aventador and our personal favourite on the grid was a classic Mercedes powered by a modern C63 AMG engine! Maximillion arrived in a style in a new Aston Martin Vanquish which he shared with his wife Eve.
Other notable cars included two Porsche 918s, a Ruf CTR3, Jaguar Project 7 and two Yugos imported from Slovakia just for a laugh!
David Hasselhoff is now a Gumball regular and the crowds absolutely love him. Afrojack was also drawing huge cheers and played sets to the crowds at some of the parties along the route. Maximillion’s wife Eve is a true hip hop star and Grammy award winner. At the London party at Tape we were treated to a live performance. Rap legend Bun B is another regular and has really embraced Gumball life as a true ambassador of the event. F1 star David Coulthard, Le Mans star Oliver Webb and YouTube sensations Shmee 150 and Cal Freezy also starred.
One thing you aren’t prepared for are the crowds. The Dublin crowd was huge, lining several streets beyond the start line, all along the motorway and all the bridges on the road to Belfast. In London the crowds were even bigger, Regent Street was closed off and the crowds went wild as their favourite cars rolled though the finish line.
This was nothing though, as the rally rolled into Eastern Europe the Gumballers were overwhelmed by the huge crowds and high spirited fans desperate to catch a glimpse of the cars. At the finish line in Bucharest hundreds of thousands of fans came out to see the cars parked outside the beautiful Palace of the Parliament.
Along the way Team Galag threw t-shirts into the crowd, stopped to meet fans and let them sit in the Batman Tumbler, most people expected them to win the prized ‘Spirit of the Gumball’ award for the second time but in the end it went to Afrojack. ‘Best Team’ went to Team Wolfpack, their light up jackets were very cool to be fair. Team Galag member Tomas Cabrerizo won most ‘Rock and Roll’ Gumballer and of course ‘Best Car’ went to the Batman Tumbler.
Established in 2013 the Gumball Foundation was launched to benefit disadvantaged youth. So far beneficiaries have included The Tony Hawk Foundation, When You Wish Upon A Star, The Sir Simon Milton Foundation, The Nelson Mandela Children’s Fund UK and The Westway Trust and Laureus Sport for Good Foundation. Money is raised by entrants bidding for their grid position. Pole position went for a remarkable $47,499 and over $270,000 was raised.
At the final dinner the 2017 route was announced, next year they travel from Riga to Mykonos. The crowds will again be huge, see you there?
About the Author
Tim Hutton has been involved in the automotive industry for 17 years, creating ideas and content for premium brands. When not writing about cars, you will find him driving them all around the world. Having learned to drive at seven in a racing car, petrol is very much in his veins.
Building on a recent post on vintage guitars, I thought it would be fun to compare two similar markets: classic cars and guitars. The two go hand in hand, both markets are often driven by the Baby Boomer generation that has found itself with significant disposable income. Despite this similarity, the growth of the two markets is staggeringly different. Based on the 42 Guitar Index, the last 10 years have been relatively stagnant in terms of growth. This compares with 400% growth for Haggerty’s Blue Chip group of cars over the same period.
The biggest difference between the two markets is sheer size. Classic cars regularly sell for over $1m and Bonham’s estimated in 2015, that there were over 5,000 cars for a combined $1.2bn. The market for vintage guitars is much more difficult to estimate, as many trade hands not at auction houses like Bonham’s, but through private channels, and websites like eBay and Craigslist. The more public nature of car sales can only increase interest in the market.
There will be over 30 auctions of classic cars across Europe and the US in 2016, including sales by Bonham’s, RM Sotheby’s, and Gooding & Co. These sales will make headlines – in 2015, 225 cars sold for over $1m. By contrast, the number of guitars that have sold for over $1m can be counted on one hand, and this number includes private sales! Overall, there will likely only be a handful of guitar auctions in 2016, including sales by Heritage Auctions, and a major sale already held in February by Guernsey’s.
One of the biggest reasons for this is simply the available supply of guitars vs classic cars. Most guitar auctions will only feature a handful of guitars that could be said to be ‘blue chip.’ There are simply more classic cars to sell than there are vintage guitars. Vintage guitars were often produced in the hundreds or low thousands a year – though records are dubious – whereas twenty thousand C2 Corvettes were produced in 1963, a number that stayed relatively constant through the 1960’s.
Not only are there more cars than guitars, there are also more drivers than guitarists! Although you don’t have to be a world class guitarist to enjoy a 1954 Stratocaster, it definitely helps. Furthermore, restoring guitars back to pristine condition can be detrimental to their value, so there is a limit to the aesthetic value of vintage guitars. Keith Richards uses his 3,000+ guitars, even though a 1953 Telecaster can command up to $25,000. A classic car however, will be enjoyed, not used. Guitars simply aren’t collected in the same way that cars are. There were only two notable non-playing guitar collectors. Scott Chinery, who envisioned his guitars kept in a museum, but still played by masters, and Akira Tsurama, who sold many of his instruments while in financial distress. Cars are very different, kept in offsite dedicated storage facilities, and maintained in pristine condition for concours d’elegance.
Although both vintage guitars, and classic cars can commend exorbitant prices, the market for classic cars is significantly larger. The size and public nature of the classic car market makes it more enticing for enthusiasts who aren’t experts. Demand in the guitar market is dominated by a subset of musicians who have become collectors, coupled with a limited supply of ‘blue chip’ guitars, naturally limits the market’s growth. However, the common thread in both markets is a core of collectors who are truly passionate about their collections.