Blog Archives

Richard Butler-Creagh & Henley Finance Ltd

Richard Butler-Creagh has been in the bridging lending business for many years. He became involved with this sector through his experiences in buying and selling his own properties. He soon realized that the most important part of this process was to be able to have the availability of good financing.

 

“This was always the most difficult part of the process. After being frustrated by the high street banks who found it difficult to turn things around quickly, I soon ended up using bridging lenders myself.”

Richard Butler-Creagh, 2017

 

He came to the conclusion that this was a business that he understood and that from a successful few years in buying and renovating buildings with his own team – to building up a rental portfolio of properties in London, he found that, not only could he value the properties very easily, he could also estimate any building works that needed to be carried out. After a lot of consideration, he set out to form his own bridging company.

 

Nowadays this is in the form of Henley Finance Ltd. It provides fast lending facilities and has a proven track record for efficiency in carrying out the due diligence process which is the most important factor from a legal point of view. Once the potential Borrower’s identity is established, not only does Butler-Creagh and his team look over the proposal but have their own experts including, planning consultants, solicitors, surveyors etc. available to ensure that the project that is being financed, runs smoothly. This is monitored throughout the duration of the project.

 

One of the key features that Richard Butler-Creagh has built the company on is the repeat business. At Henley Finance Ltd costs are kept as low as possible in the belief that if their borrowers make money, they return with more projects to fund. As a result, they have never advertised and all business is from word of mouth.

 

Richard Butler-Creagh

My Parallel Universe: Life after the Fawley Court Case

Newspaper articles say that I tried to ‘squeeze’ a £5M fee from the sale of Fawley Court, Henley on Thames. In reality, Aida Hersham, the person at the centre of all this, approached me to purchase the property.

I had never met this woman before. She offered me the £5M fee in return for taking over my contract.   See attached the two emails that she sent me and admitted in court that she sent to me. Attached is also the signed letter that she later denied giving me, even though it was found on her computer and it was found to be printed off. When I was introduced to her, I agreed to let her take over my contract on the basis that she would give me this fee. When she did not keep her word, I started proceedings against her in the High Court.

It is said that I ‘misrepresented’ the sale price, which was, in fact nothing to do with me as I was not selling the property anyway, (the Marian Fathers were the sellers). One month before completion, Savills had valued Fawley Court for mortgage purposes on behalf of Credit Suisse for £24M. The property eventually sold for £13M. I have attached the Savills/Credit Suisse valuation (page 38 for the figures). Yet in court, her expert witness only valued it at £9M and the judge ignored the Savills:Credit Suisse Valuation then he ordered I pay the difference.

The judge said that I told ‘lie after lie’ because in my witness statement I said that I, personally had previously used the Bank of Ireland for development finance, when it was my company that used the bank for development finance. This was my company and I was 100% shareholder. The fact that I said ‘I, personally’ rather than ‘through my company’; the judge found unacceptable.

The whole sixteen months I worked with her, making sure that the sale went through, I took no salary.  I believed that she would keep her end of the bargain with the three bits of correspondence she had given me.  She seemed an astute business woman, after being married to estate agent and TV star Gary Hersham for twenty years, yet she claimed in court that she had not been involved in business and she was ‘just a Jewish mother’ – her words not mine.

Three years since the trial it still feels like I am living in a parallel universe, with no ‘right to be forgotten’ because a high court judge had all this evidence and found that there was no agreement between us.  The money is no longer a concern to me and I would gladly give it straight to a worthy cause, I just would like to make sure that if this story has to be remembered, then it is with my side of it.

Richard Butler Creagh, Henley on Thames, Richard Butler-Creagh

‘Affordable Housing’ update on Gehry’s Guff

Further to the released plans of aesthetically thrilling design of the Phase III of the Battersea Power Station project unveiled by Frank Gehry earlier this year, certain things are clear. Confirmed: it will be a positive addition to London, and contribute more interest to Battersea Power Station by letting it overflow with some of Gehry’s magic. Gehry in collaboration with Foster + Partners has designed the undulating building to the west of The Electric Boulevard called “The Skyline”, which brings together the other half of the planned homes in addition to a medical centre and 160-room hotel.  Two floors of retail front on to the western side of the street, while breaks in the façade allow daylight to reach the public spaces below are bound to wow the architectural crowd and the entire top of the building is laid out as one of London’s largest roof gardens, who could ask for more.  It even includes 103 units of affordable housing. The question is, how many people can afford £800,000 for the smallest apartment though?  What is not so clear is their definition of ‘affordable’ is one that would serve only a small percentage of the population with a one bed apartment starting at £800,000.

Frank Gehry, Founder of Gehry Partners:

“Our goal from the start has been to create a neighbourhood that connects into the historic fabric of the city of London, but one that has its own identity and integrity. We have tried to create humanistic environments that feel good to live in and visit.”

Ed Vaizey, Culture Minister:

“Battersea Power Station is an iconic site and the unveiling of this exciting new design by Frank Gehry and Foster + Partners will ensure the development of this former industrial site will put Battersea on the world stage once again. The plans for a new high street for the capital show that London continues to attract the best in terms of architecture, design and innovation.”

These quotes are from their press release and it is clearthat everyone is in accord that it Phase III is  going to be an aspirational environment, but only for a lucky few.  Unfortunately this is going to happen more and more as the government has recently allowed developers in new build hot-spots like Milton Keynes to renegotiate the number of affordable housing in one case from 63 to zero in an effort to stop the scheme ‘stalling’ as the previous numbers were ‘economically unrealistic’.  Seems like they didn’t have to go to the bother to renegotiate, unless their ‘affordable housing’ was aiming for the people earning more than £200,000 p.a.!

Richard Butler-Creagh

At last planners approve more homes

The number of residential units for which planning has been approved across the UK has jumped by 41% over the last two years, according to data prepared for Knight Frank. Data released by the government shows that more than 48,000 homebuyers have used help to buy to get a leg up on the housing ladder. Some 30,000 have the used  the help to buy equity loan scheme, aimed solely at those buying new homes, while around 18,500 have used the mortgage guarantee, reports the Henley Standard, in an article entitled ‘Planners rush to fill demand for homes’.  Whatever your views on help to buy, and the government’s intervention in the housing market by this scheme, there is no doubt that it is having an impact on development volume.  Redrow is the latest housing builder to show that sale via help to buy have accounted for a notable proportion of transactions over the last year, in this case around 35%. The uncorking of latent demand for housing through help to buy has also helped boost confidence around lifting development volumes.  The latest planning data, which shows the number of private and social homes for which detailed planning as being approved in schemes of 10 units or more, highlights that developers are undertaking more work. This is reflected in record high construction activity, as reported by markit/ CIPS this week. It shows that around 190,000 units receive detailed planning in the year to July, up from 135,000 in the same period two years ago.  The planning  rules are no doubt also playing a part in the surge in planning applications, as under the relatively recently introduced national planning policy framework, the developments can be approved where a local authority cannot prove it has five years worth of housing supply This is the case for many local authorities there is still some way to go however Around 250,000 new homes are needed every year in the UK.  In the last financial year fewer than 140,000 were completed.

I think this is very encouraging as planning has always been the main stopping points for developments going ahead and hopefully this is the start of a complete overhaul of the system.

 

Richard Butler Creagh

Richard Butler-Creagh

Stressing out the housing market, by Richard Butler-Creagh

Savills have just published a well-researched article a bout the new affordability tests introduced by the Bank of England in June. They were designed to ensure financial stability rather than to control the property market and subdue house price growth. However, further to the regulatory changes set up by the mortgage market review, the Bank’s latest set of measures looking increasingly likely to rein in the more bubbly parts of the housing market and curtail the growing number of first-time buyers.

Under the new rules brought in by the Bank’s financial policy committee, lenders are required to assess whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, rates would be three percentage points higher than the rate at origination. Mortgage lenders are also required to limit the proportion of mortgages at 4.5 times income above to no more than 15% of their new mortgages. These latest changes are far more prescriptive than the tighter lending rules introduced by the Mortgage Market Review in April which required a stress test but did not set a rate. Furthermore, the UK banking sector is currently undertaking a particularly stringent collective stress test, which examines the resilience of banks should house prices fall by around 35%. The exercise is to be completed by the end of the year.

I think this is a good article as these factors will and are impacting on the property market as the property market is controlled by the mortgage market: if mortgages are difficult to come by there will be less buyers. This can already be seen in the housing market when mortgages are becoming increasingly difficult to get.

The one sector which is being particularly affected is the market above £2 million, these are the mortgages which are proving difficult to pass the affordability test, as a lot of these people are putting large deposits down and maybe living off investments rather than income and the banks are failing to take this into consideration.

 

Richard Butler Creagh

Right to Buy Demand Soars

The government’s Right to Buy scheme was launched by Margaret Thatcher in 1980 to encourage council tenants to buy their homes. I was researching how it has evolved especially in the light of the rising demand for housing stock. There was an article in the Daily Mail on 27th August and it raises some issues.

The article writes: The number of homes sold through the government’s Right to Buy scheme is up more than a third compared with last year. Figures from the Department for Communities and Local Government show 2845 houses were built through the scheme between April and June this year. That is 31% more than the 2171 bought in the same quarter last year. London was the most popular area, accounting for a third of right to buy purchases. Nationally, councils made a total of £210.8 million from the sales in the past year, with an average £74,000 paid for the property. It is an increase of more than 60% from the amount raised through sales in the same period last year. Since the launch of the Right to Buy, around 2 million properties were sold in the following three decades. In 2012, the scheme was reinvigorated to offer discounts of up to £75,000 on properties to encourage tenants to buy. The discount was increased in March 2013 to £77,000 and to £102,700 for London borough tenants. ‘Council house building starts are now at a 23 year high’, says Brandon Lewis, Housing and Planning Minister.

The thing I find difficult to understand about the Right to Buy scheme is that councils are having difficulty finding homes for new council tenants, and yet then they build new council houses then sell them off. I can see that if tenants are then taking over the responsibility of looking after their houses this then saves the council money as it has less housing stock to maintain. This is a viable solution as long as demand plateaus soon, easing up on the currently escalating demand for new build housing.

Richard Butler Creagh

 

Richard Butler-Creagh

What power Mark Carney?

Gone are the days when the Bank of England was just known for setting interest rates in order to control house prices and inflation.  Now this is not tenable given the number of home-owning families already battling against an ever increasing cost of living, the Mark Carney, the Governor of the Bank of England is looking elsewhere to control house prices rather than simply tweaking interest rates. Read the rest of this entry

Extra Council Tax Band for Properties Over £2M

Booming London house prices are likely to be subject to a new levy soon after the general election, should the Liberal Democrats or Labour get into power, says the Chief Secretary to the Treasury, Danny Alexander in a speech to the city yesterday, writes The Times. Read the rest of this entry

Buy to Let

The buy to let business is a good long term investment if you are prepared to work at it. First you have to find the right location, this a very important part of the business, get it wrong and you will pay dearly.  When I started in this business I use to look in the areas I enjoy going to, it always makes life easier if when you have to go to the property for what ever reason its a place you like to hang out in so its not a chore. The next thing is to make sure its close to pubic transport, in london for instance it can make a lot of difference if it is zone 1 or 2 and so on. This a long term investment so you should look to the future and think what the next up and coming areas are, for instance when I started buying property I bought on the edge of a good area like west hampstead you can go closer to Kilburn which is not quite as good an address as West Hampstead but still popular and when it comes down to buying you get more for your money and as time moves on it becomes more expensive and the difference in rent from a property in the centre of West Hampstead and on the outskirts is not that much so can pay less when buying but get close to the same rent when renting. the next thing is kitting the place out, keep it simple and not cluttered make it so easy so that when the tenants move out it is easy just to freshen up and get ready for the next tenant. Rent, do your home because the tenants will, they will know exactly what the going rate is, if you are to high in price because you paid to much or spent to much on getting the property ready you will be waiting a long time to find a tenant.

Richard Butler-Creagh

Property bubble

One of the largest house-builders in Britain recently dismissed fears of a housing bubble as it reported booming demand for its new homes.  The House builders revenues jumped 21% last year after it sold nearly 12,000 homes and that is with sales 30% higher in the second half than the first. One of the rival companies also have record profits for the six months to the end of December so it seems that the industry is starting the new year in a really bullish mood.  all this came as figures from the mortgage lender, Halifax, showed house prices had dipped 0.6% in December but are still 7.5% higher than a year ago.

The whole of the housing market has had a remarkable recovery after many years of stagnation boosted by increased mortgage lending and assistance from the state-backed schemes such as Help to Buy.  Many people think that the revival has fuelled a housing bubble and this has caused the Bank of England to scale back the funding for lending scheme so it no longer applies to mortgages.

Some of the large house builders say they don’t think there is a bubble, they say they cover the whole of the country and think the pricing is stable across the board.

I think the main thing is that if wages increase inline with house prices there should not be a bubble, but as we know this is not the case so people buying property when interest rates are at record lows, it would not take much of an increase to make things very difficult for a lot of new home owners who are pushing themselves to all time highs in prices. One thing is for sure interest rates can only go one way at the moment, so as I have said in the past it is a good time to fix a good rate with your lender.

Richard Butler-Creagh