While the decision of the UK electorate is now confirmed, a period of further uncertainty is unavoidable as businesses, the financial markets and the political establishment in the UK, Europe and globally come to terms with what this means.
Proplend is a UK based and focused company, thus we do not expect any direct and immediate impact on our business. Right now we will continue to focus on working with credit worthy borrowers and offer investors attractive rates of asset backed fixed income returns.
Whilst there will be certain sectors of the property market that will be directly affected, (Central London residential and European Commercial HQ’s) we do not anticipate a replay of 2008 proportions across the wider industry. In the capital markets, as a result of weakening sterling it is likely there will be opportunistic buying by private investors, but we believe that institutional investors will hesitate to commit to either purchase or sale decisions until the effects of BREXIT become clearer.
We look at each transaction on a case by case basis and our credit team will continue to diligently monitor the quality of borrowers and the loan security. Our underwriting and credit policy has always aimed to generate positive returns for investors throughout the economic and property cycles. Our current average Loan to Value (LTV) across the whole loan book is 64% LTV, which we believe provides a sufficient buffer to account for any short term underlying property price fluctuations. We continue to monitor the existing loan book on an ongoing basis.
Whilst we are therefore entering a period of unprecedented change as markets and sectors adapt, what is clear is that in any scenario there will always be opportunities and those will become clear in the weeks and months ahead.
In summary, we expect to see continuation of the attractive interest rates offered via the Proplend platform and a widening of the gap with bank savings account interest rates.
