Announcing the changes, Shawbrook Bank said it had recognised the demand for short-term finance in the property investment market, where many sophisticated investors are looking to add value or yield.
The STL products are designed to act as a solution to support tactical property investments made by limited companies, LLPs and individuals.
In summary, the bank has consolidated the range from nine products down to five, with sweeping pricing reductions across the board of up to 0.23 per cent a month.
Changes have been made to products such as STL1, designed for residential security on a property that requires no work or a light refurbishment. This comes with a maximum 75 per cent loan-to-value (LTV), with rates from 0.43 per cent a month.
Shawbrook Commercial’s STL2 product, designed for semi-commercial property where no work or a light refurbishment is required, is now available at up to 75 per cent LTV with rates from 0.75 per cent a month.
The lender’s STL3 loan, relevant for commercial property where no work is required, comes with a max 70 per cent LTV and rates starting from 0.83 per cent a month.
The final two of the five streamlined products include HR1, relevant for residential properties where heavy refurbishment is required. This is available at up to 75 per cent LTV with rates from 0.60 per cent a month.
HR2, which completes the simplified range, is for semi-commercial and commercial properties where heavy refurbishment is required. The max LTV here is 70 per cent, with rates from 0.83 per cent a month.
Shawbrook said its commercial team has also made improvements to criteria and will now look at applications for borrowers with no previous property experience. Commercial to commercial refurbishments and lending on vacant commercial property will now also be considered.
One of the benefits for ‘bridge to let’ investors is a £0 arrangement fee, where they are looking to refinance to a term mortgage.
Reactions
Provider view
Emma Cox, sales director at Shawbrook Commercial Mortgages, said: “These improvements have been a long time coming and I am delighted to be able to announce them to kick off the summer months. The STL range has always been a top performer for Shawbrook, and we are confident that these changes will resonate with our broker partners and their clients.
“All the great benefits of the old range are still in place, with a 0.25 per cent discount available for repeat borrowers and no minimum interest periods or ERCs. We are also pleased to continue to deliver for ‘bridge to let’ investors, where the borrower looks to refinance the STL onto a mortgage with no arrangement fee.
“The offerings’ innate flexibility has also been retained with the maximum 24-month term providing flexibility to borrowers and time to refinance or sell.
“We will have more product innovation to the Shawbrook STL offering coming over the summer.”
Charges
Standard 1.95 per cent fee, no exit fees and no minimum term.
Adviser view
Stuart Phillips, a director at Aalto Mortgages, said: "These changes are extremely welcome. My clients are keen to explore more adventurous property development strategies, but a lack of lenders supporting new investors has been prohibitive.
"Shawbrook’s willingness to consider most property types has always been a strength, but high costs have often eaten into margins."
Verdict
Shawbrook’s changes may attract attention largely for the simplified choice and the price reductions. Perhaps to a lesser extent, brokers might be eyeing up the widening of criteria, particularly the fact that borrowers coming to property investment for the first time will be considered. The true litmus test will be whether the streamlined range matches the popularity of its previous incarnation.
Marcel Le Gouais is a freelance journalist
