Intro 0:01
Welcome to the London Property podcast, your go to source for navigating the complex and ever changing London real estate market. Our digital marketplace provides informative and educational content from industry leaders through podcasts and videos. We cover various aspects of the real estate experience, including buying & selling, finance, law, tax, construction, design and more. Join us as we delve into the latest trends and developments in the market and gain valuable insights from our panel of experts.
Farnaz Fazaipour 0:41
Hello, and welcome to the London Property podcast, the home of super prime. I am your host Farnaz Fazaipour and today we are in conversation with Haim Eida. Welcome to the show.
Haim Eida 0:53
Thank you!
Farnaz Fazaipour 0:54
Haim is a property finance expert with nearly two decades of experience in the industry. He co-founded his own business in 2004, specialising in providing customised finance solutions for a wide range of property sectors. With a strong network of both institutional and private lenders, Haim brings a wealth of knowledge and experience to the table. You also hold a law degree Haim and an LLM from Southampton University. So let's dive into the world of property finance with your time. And I'm going to start with the fact that you never say no and you always find a solution. So let's go with our first question here, which is what is the difference between mortgages and bespoke finance?
Haim Eida 1:40
In principle, the difference between the two is as follows. I could summarise in two words is the analysis of how the banks look at the deal, and the flexibility. And what do I mean by that? In my word, we deal with specialist property teams within the banks where the focus is on the deal. And not at the boy as much as well as get a better picture of what the boy is like, his background, experience, but it is not personal financial position, and our salaries and the lack of these information that any other mortgage or BTL lender would look for, therefore, the scope of doing things is different than the standard. BTL providers, when I say flexibility that would come with fixed products. And in one word, there is no product, you could do everything depending on the deal, depending on the borrower, and you can restructure things to suit it's all bespoke finance at the end of the day. And you could have the same deal, different borrowers, different needs, and different finances for the same property, same cash flow, all depending on the borrower's needs, and where he sits on the financial circle.
Farnaz Fazaipour 3:10
So would it be fair to say that the borrowers tend to be property professionals?
Haim Eida 3:16
Most cases yes, in most cases, yes. They know exactly what they're looking for. And they know what they want to achieve. And we tailor the finance to suit their needs.
Farnaz Fazaipour 3:25
So when we say that you you look at all types of property financing, that means commercial, residential, warehousing, whatever it is, as you say, you we'll look at the business proposition and see how that makes sense. Okay, so we've been in a world of interest rises, which you know, for many years, we've had really, really low interest interest payments to have to think about in this market. Where do you think the market is heading with that?
Haim Eida 4:00
Well, it's not really what I think it's what we're here. It's difficult to predict, if you listen to economists have been attending some chief economists presentations, and it's only by predictions. The problem this particular time, is that the predictions are based on unknown factors, mainly political. So it's very difficult to predict what's going to happen. But the word in the market is simple. We're nearing the peak, and we believe there will be maybe another hike. And then from there on, it's the curve is going to change. And it's going to go downwards. From what I understand. It's not going to go back to what it was where we started, but it's heading down. And as we look, as we say at the moment, we're talking about mild recession. So we know in the big.
Farnaz Fazaipour 5:01
And from where you're sitting, how do you think that's impacted the property market?
Haim Eida 5:06
Well, again, in my case, it is less in influential, if I can put it this way, because I deal with investors that adapt themselves to what the market is. So if interest rates go up, usually it would be a offset by price reductions, they tend to get properties, change them change the use, and make a different value. So it doesn't really, it doesn't really impact. It's not again, some back to the BTL and mortgage. It's not, it doesn't have the same impact. Don't forget, before the financial crisis 2008 base rate was 5%. And it was booming. There's always something to do in England, in London, England.
Farnaz Fazaipour 5:52
Couldn't agree more. I always say it's not. It's not about where is the market at? It's about what opportunities in the market?
Haim Eida 6:00
If you're an investor, you would know what you're doing.
Farnaz Fazaipour 6:04
And if you were to advise clients now about how to navigate the market, you know, because people are, presumably considering should I refinance? Should I go to fix? Should I stay on variable? You know, what would be your advice to people at this point?
Haim Eida 6:18
Well, again, it's a tricky question to ask because I can't advise anyone. I'm not regulated. And in order to advise someone, you need to know the entire financial position of your client. I'm not in that business. I procure finance, my clients know exactly what they're doing, they know exactly what they want to achieve. And they need the money, that's it, go and find me the money. So it's not for me to advise anyone, my real advice would be just just follow the, you know, market comments, the news, and make your own decision of where things are going to go by listening to economists, reading articles. Again, each deal is different, each client is different, the financial needs are different. And for one client to sitting on a lot of cash, for example, if rates went up a bit, you know, even by 2%, big deal, there's no point to fix. Whereas others, if they tight, they might consider fixing. So it doesn't really affect again, in my business, I wouldn't advise, I can't advise and wouldn't advise anyone what to do. It's really up to them, they can ask me what the indications in the market are. And I could come back with indications. But otherwise, it's entirely up to the client.
Farnaz Fazaipour 7:38
Okay. So would you say that the finances that you seek being so bespoke are not really set products, or you start with set products?
Haim Eida 7:53
There are no products.
Farnaz Fazaipour 7:54
There's no product?
Haim Eida 7:55
Right. All right, products, usual mortgages, details that go, each lender comes up with three, four products, and it's fixed, it's rigid, this what it is, that's what we can do. If you fall into the Rubik then fine. If not sorry, we can't help you. Whereas like it's all different.
Farnaz Fazaipour 8:18
And then is there a big difference in what is available when it comes to onshore and offshore?
Haim Eida 8:27
Again, in my world, you could play with onshore and offshore, that is not a stumbling block, although across the board compliances is quite difficult today. And if someone has a structure, a has to justify himself, you know, the need for that structure was it's worth it. Because the compliance and the account opening procedure would be quite difficult or lengthy. So but otherwise, that doesn't impact the deal. The finance, if I could put it this way, where the deal is onshore offshore, doesn't really impact the deal. It's only to get the finance that may take longer period, because of the complexity of the of, you know, the structure, but otherwise, it shouldn't make any impact on the actual finance.
Farnaz Fazaipour 9:21
And I guess, you know, depending, as you say, on on people structures. For some people, it's probably a tax decision whether they are onshore,offshore.
Haim Eida 9:29
In most cases today. Yeah, if you could, if you could hide behind it a few years ago, you can't anymore. So from what I can say, it's only tax, in essence, inheritance tax, if that trust in place for the family, so it's mainly inheritance tax now, otherwise, doesn't justify the cost. And the Via de la Rosa's, one has to go on to get finance.
Farnaz Fazaipour 9:55
And you obviously have a very strong network of lenders institutional and private lenders, so for our listeners, that just so that they can understand the sorts of things you can help them with. Just give us a glimpse of what does that look like from, you know, bridging loans to development loans to, you know, just just just a little bit.
Haim Eida 10:19
We cover, we cover all the financing across the board, it could be, as you said, it could be bridging. I've got bridges I work with, with a very commercial way of thinking. And as bridges, you really have to be very flexible.
Farnaz Fazaipour 10:35
And understand the market.
Haim Eida 10:37
Obviously understand the market because we've got to take views on many, many things, many aspects. And in recent years have been a lot of preaching companies coming up. But the more institutionalised and I'm trying to target those who are more a family offices, people can take a view on the stand property and be act fast and act fast. Everyone has to have to work that's bridging. But you've got you've got to be you've got to have a wider angle, the way you approach deals, but yeah, we've got that, obviously, investments. development loans will tell finance, we restructure. I've got clients for example, that built up a portfolio within the years and they've got BTL and as for each property, there's another BTL lender, and you just stick the everything and consolidate into one pack with a commercial lender. It could be high street, it could be anything good insurance company could be a building society, private bank.
Farnaz Fazaipour 11:45
And do you think that to get a more competitive deal, it's all about matching the investor profile to the lender, having a lot of experience and reach within that sector?
Haim Eida 12:00
Is very important. So just start it's matching the lender to the investor means that it's the attitude as well of the of the of the Bora, some Bora can be missing. And I wouldn't, I wouldn't take them to a certain lender, because I know that down the line, there may be problems, clashes, clashes, therefore, it's very important to look at the type of the investor know him as well understand how you operate, and then try to bring in a lender a that obviously, would, we could tell it the derivative ones, but be that the both parties would match. Very important people, people don't pay that to that attention. But I make sure that I look I tried to look ahead, understand the client most most of my clients I know anyway, I know what could be missing or is very particular with scrapers. And this way I can match the parties and avoid any potential clashes, because things could go difficult, especially if it is development, finance, then everything can come up in duration during the term of the loan with a short loan. But even in, in, you know, long term, it can happen as one, when a client wants to change something or missed a payment usually doesn't happen. I haven't come across that for a long time. But things may change. And don't forget that clients have to have a duty to report on annual basis on the business or on the property. And it got to a particular with the with the papers and some of them you have to chase and you have to go after the lenders fundamental to understand that and can take the time say okay, fine, no problem, give me the give you the time and then you go and get the information. A lot of them you'll find a lot of the investors, you'll find that they understand investments, but when it comes to paperwork, you've got to sit on them.
Farnaz Fazaipour 14:09
The human element is really can't be underestimated. In real estate, it is hugely important. It is very important. So when would you say is a good time for borrowers to start thinking about reviewing how close to the end of their term? Let's say they should start reviewing their situation and looking for alternatives and you know, what are the steps they should be taking? So if somebody's listening to us now and they're thinking okay, when should I you know, start poking?
Haim Eida 14:39
I tend to speak to clients to you before expiry for two reasons, a give them some time to think the people think well we use a long time but it is not time flies very quickly. It does take time today. It If you were to move to another lender, it does take time the procedure, especially first dealing with, with a new lender takes time, things can come up. And even if you offer overshoot the expiry date, you don't overshoot it by, you know, so long that, you know, it could irritate the bank was waiting for, you know, to be repaid for the redemption. But it does take time, things change all the time. And it is important to start engaging the year before already talking about what the clients would like to do. In most cases, if the client are happy, and the banks are happy, it's no big deal. We don't have to move if the other other good deals around. Just renew the deal with the bank with the existing lender. That's easier, cheaper, quicker.
Farnaz Fazaipour 15:53
And before we thank you so much for your time and say goodbye to you. There is one other thing that I wanted to talk to you about, which is obviously when you're coming to a point of getting a new new boring in place, you're dealing with valuations. And, you know, there was a time where we, as agents always expected these values to be 10% off. Is that relationship, something that has changed over time. So what I'm trying to ask is, how close is the market to bank valuations? Is it is it adipower or is the bank valuation always going to be more conservative?
Haim Eida 16:36
I don't think there is a tendency to lower valuations because it's a bank valuation. Don't forget again that the difference between BTL,I went back to first question, BTL and bespoke finance. Here. We do have a conversation with a with a valuer. We tend to banks tend to give us the opportunity to choose any value on the panel than we did choose. Evaluate the a the court is good, and we know him as brokers know him, and we can have a conversation. So if there are any surprises a would not before devolution hits the you know, the banks, the desk, and we could have a conversation. Whereas in BTS, you don't get to speak you can you don't get to see the value. I don't even know this value valuation teams, I come across names that I've never heard of when it comes to BTS. So to say that the tendency is to lower valuations, I wouldn't say so. Usually, they come come roughly with the, you know, with the value, unless the client thinks that it comes up with a figure that doesn't make any sense to me, for whatever reason, but otherwise, a set of rules that you know, its income, its yields in the market, we'll know what they are. So we could come up with an idea of what the value could be. And then it's a discussion with the value of subject to what he sees in the papers that go it goes through at the end of the day.
Farnaz Fazaipour 18:16
So from housekeeping point of view, you would say to our listeners to get their three years of accounts up to date before they hit the road of finding finance, what are the things that you would advise someone to get prepared before ahead of time?
Haim Eida 18:31
First of all, I would ask a client whether it was good any adverse publicity or any things of the background that I should know about? If there is nothing such client is claimed no problem, then just you know, built up of your papers that shows that you know what you're talking about. It gives its inject it injects more more confidence when it when a bank comes across such a client. So it's very important that client's on top of the on top of papers, otherwise...
Farnaz Fazaipour 19:06
Well the banks are investing in you, aren't they? So you've got to make sure that you're a good investment. Okay, well, thank you so much for for sharing some of your insight with us.
Haim Eida 19:15
Thank you very much for inviting me.
Farnaz Fazaipour 19:16
And for any of our listeners who want to talk to Haim, you'll be able to find his details in our experts directory.
Haim Eida 19:23
Thank you. Thank you.
Outro 19:29
Thanks for tuning into our latest episode of the London Property podcast. Head over to our website where you can browse our exclusive network of top experts driving the market. As a member, you'll have direct access to our experts and their networks. Our award-winning content will help you choose the right professionals for your needs, and make informed decisions about your investments. Personal recommendations are a powerful tool in connecting with trusted professionals. Let us introduce you to the right people to help you achieve your real estate goals. Contact us now to learn more about becoming a member and gaining access to these valuable resources or joining our directory of experts.
.jpg)