Big Interview: Jack Coombs, Director, Aspen Bridging

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Jack Coombs Aspen Bridging new (1)

BLD asks the leaders in the bridging sector to look back at 2021 and look forward to 2022. What opportunities and challenges lie in store this year?

Aspen Bridging has set its sights on scaling new peaks this year after its focus on the buoyant UK residential market helped it rack up record numbers in 2021.

Co-founder and director Jack Coombs told BLD that the lender, which offers bridging and light development loans of up to £10million to UK and foreign clients, is hoping for a 40% uptick in new deal volumes this year.

That would follow an 80% growth in year-over-year completions in 2021 compared with 2020, which itself was a best-ever year for the group launched by Coombs and managing director Ed Ahrens in 2017.

It is a clear ladder of progression.

“We really are growing at a rapid rate,” says Coombs, looking ahead to its fifth-year anniversary. “We are very ambitious for 2022 and have an excellent pipeline of work ahead of us.”

The pandemic has conversely been a spur for the group whose staff numbers have grown from 13 before the crisis to 21 today.

It has benefited from a strong residential market in the last 18 months or so with continued demand from property professionals and also from foreign investors particularly in China and Africa.

“The vast majority of our work is residential supporting property professionals with purchases, refinances and capital raising on investment properties with an LTV up to 75%,” he explains.

“A lot of the demand from abroad is coming for new build properties at present. We have adapted our processes and procedures and stepped up to the mark to offer UK & foreign clients a seamless due diligence approach.”

The group has also seen strong demand for its enhanced refurbishment product, which was refreshed in November last year, covering conversion schemes, Finish & Exits, structural works and extensions all at up to 75% LTV plus 100% cost of works.

“These small to medium sized projects might involve a change of use. This can be a very flexible product for those people buying a property, taking drawdown funds to convert or refurbish and then either selling or refinancing,” he explains.

Its No Valuation product has also proven very popular in the last 12 months. It enables, through the use of this innovative product, genuinely urgent transactions at up to 70% LTV at initial quote and is guaranteed in under 10 working days.

“It’s for people who need money swiftly and it has worked very well,” Coombs explains. “It’s mainly used by clients either looking for capital raising or refinancing.”

The group has also ‘improved our offering’ during the last year shifting down the rates to as low as 0.64% on its residential flat rate products and its stepped rates to 0.39% right up to the highest LTV’s.

“These levels of rates make a significant difference to how we perform in the market,” Coombs states.

Aspen’s status as a 100% subsidiary of S&U Plc, a majority family-owned FTSE listed speciality lender with around £300million in listed equity plus secure additional funding lines, has also helped it cope with the pandemic.

“We are unique in that we are equity funded,” Coombs says. “That gives us an edge as we are able to lend without having to refer to a funding line.

It has given extra confidence and certainty to brokers and clients during the pandemic. It provides a certainty of delivery and an understanding that they can form long-term relationships with us. We are here to stay.”

Indeed, longevity and heritage are key Aspen strengths given that S&U, run by 3 generations of Coombs since its foundation in 1938 by Clifford Coombs, has lent through every financial cycle since then.

That may not have included global pandemics but has taken in the stresses and strains of wars and economic crises.

Coombs is utilising some of that experience by being measured about its commercial offering. Around 15% of its deals are in the sector mainly in Class E such as retail, warehouses and offices.

“We are probably more bullish about our market leading position in residential but in the right areas we remain fans of commercial,” he explains.

“There are a few factors in our thinking. You have the re-introduction of businesses rates, which will affect the commercial market. In addition, whenever there is a serious shake-up in the economy and in how things work and how people operate it takes a while for the dust to settle.”

So, it is in residential where it will see further innovations in 2022. This includes a new Bridge to Let product – one year bridge followed by a one year buy-to-let – which is likely to go live in February. “Its rates will be from 4.49% per annum. It is a good proposition, and it fills a gap,” Coombs says.

“We’ve done a soft launch but will be sharing more details soon.”

This year the group also hopes to refine its development exit offering. It has recently moved to no minimum terms to take advantage of “developments flying off the shelves”.

Coombs explains: “We want to attract more developers given this level of demand and it does not seem reasonable to charge several months interest for a single month’s use.

Traditionally people weren’t worried about a three-month minimum bridging term because it was rare for a borrower to exit within that period.

But when you have high level developers achieving good sales then you do expect earlier exits. We have removed that barrier for them.”

In order to cope with the expected workload from its new products and offerings Aspen is hoping to further increase staff numbers this year.

“We are likely to add several more,” Coombs says. “We are looking forward positively and with confidence. There may be pressure on interest rates over the course of the year, but we are well capitalised and well positioned.

Covid is still a concern but even if there were further lockdowns the overall resilience of the property market is such that it is unlikely to suffer a major setback.”

The Coombs success story in property lending continues to march on.