Search and find what you need faster.

Swift completion of £5.9 Million loan secured over prime residential blocks

Posted on: January 20th, 2025 by Hugh Dineen-Lees

In a recent financial transaction, a £5.9 million loan was secured over three multi-unit residential blocks located in London and Hemel Hempstead. This deal involved multiple linked refinancing transactions of the commercial elements, showcasing the complexity and efficiency of the process.

Anna Christou represented YBS Commercial Mortgages, while Paul Marsh acted for the Borrower. The transaction was completed within an impressive nine working days from the issuance of the Offer, highlighting the dedication and expertise of the teams involved.

A special mention goes to Katie Peck and Amy Bristow, at YBS Commercial Mortgages, whose pivotal role ensured the smooth and timely completion of this significant transaction.

This achievement underscores the importance of collaboration and precision in high-stakes financial dealings, setting a benchmark for future transactions.

Lawrence Stephens prepares source of funds reports for property bought at auction using crypto assets

Posted on: December 16th, 2024 by Natasha Cox

Despite cyptocurrencies becoming more mainstream, recent commentary suggests that investors are still finding it hard to utilise these to purchase property in the UK. A recent Financial Times article highlighted the low appetite for sellers to accept cryptocurrencies. As a result, if purchasers want to use their crypto investments towards a property purchase, this usually involves converting the cryptocurrency into traditional or fiat currency – legal tender established by government regulation.

Much of the reluctance to accept funds derived from  the disposal of cryptocurrency comes from its well-publicised association with criminal activity, in particular money laundering. Law firms have obligations imposed by the SRA in relation to checking sources of wealth and sources of funds for anti-money laundering (AML) purposes. Solicitors have a legal duty to ensure that any, and all, funds used within a property transaction have come from a legitimate source. They must therefore establish the original source of the funds, not the mere availability of funds in a bank account.

Establishing the legitimacy of funds generated through cryptoasset activity requires the instruction of an expert who is able to carry out a full report on the crypto proceeds being used. The content of this report includes documenting and reporting of the cryptoasset activity, including the initial ‘on-ramp’ into crypto (i.e. the exchange of traditional fiat money into cryptoassets), the purchase of cryptoassets, and the subsequent cryptoasset activity to the ultimate liquidation and ‘off-ramp’ from cryptoassets back into traditional fiat money which was then being used to make the purchase. This report can then form the basis on which the conveyancer can make a judgment as to whether it is safe to proceed with the proposed transaction.

There are currently few law firms with the required expertise to produce such reports. Buyers wishing to use crypto assets for property purchases should be especially aware of the need to establish legal source of funds when buying property at auction.

The Lawrence Stephens’ team was recently called in at short notice to assist a client who had purchased a property for £210,000 at auction. He had intended to fund the purchase by utilising proceeds mainly generated through investing and trading on cryptoassets. Our client had instructed solicitors in relation to the purchase. However, just two days before the notice to complete was due to expire, the client was informed that they did not have the necessary expertise and could not provide the required report on the source of funds coming by way of crypto. At this late stage, he was at risk of losing his 10% deposit.

The Lawrence Stephens’ team – comprised of Asim Arshad and Gunduz Misiri – were able to take on the instructions and were able to extend the notice to complete by three days. This gave the team enough time to complete a full crypto source of funds report to verify the funds coming by way of crypto and intended to be utilised for the purchase. We were pleased to effect the completion of the purchase within the agreed upon extended time.

 

Residential Real Estate market update: navigating the current UK housing market

Posted on: August 9th, 2024 by Yvonne Uzoka

The Bank of England (the ‘BoE’) Monetary Policy Committee’s recent decision to cut interest rates to 5% and the anticipated government taxation regime announcement in October 2024 are likely to affect both the wider UK housing and Prime Central London (‘PCL’) markets. In this market update our Residential Real Estate team take a look at the possible effects.

Impact on Swap Rates and the UK housing market

Let’s dive in. The UK housing market continues to show robust price growth. Earlier analysts’ predictions of an expected 1.8% rise in housing prices in July 2024, prices have been surpassed by actual increases of 2.1%. This unexpected growth reflects strong pent-up demand as borrowing conditions improve. In anticipation of the BoE’s interest rate cuts, several mortgage lenders, such as HSBC, NatWest and Nationwide, have recently reduced their mortgage rates boosting approvals to around 60,000 per month.

Following the BoE’s decision, five-year swap rates fell to 3.6%, the lowest since February 2024. This is under the crucial 4% threshold and experts are predicting rates will stabilise around 3.25% above pre-pandemic levels.

Why does this matter? The current trends suggest that lenders expect long-term interest rate reductions, making 5 to 10 year fixed mortgages the most cost-effective options. This indicates that lenders are keen to secure borrowers at these lower rates, which are predicted to drop over the next few years – a positive signal for the housing market.

Overall, there is cautious optimism. While house prices are rising steadily, borrowing conditions are improving and no dramatic drops in rates are expected.

The contrasting trends in PCL: signs of recovery?

In the wake of 20+ months of economic fluctuations and high interest rates, the UK property market has shown a mix of different trends. In the broader market Q2 of 2024 saw a 22% increase over the previous quarter for properties valued between £3-15 million. However, during the same time period, PCL prices were falling, with valuations dipping slightly. The trend of increasing average discounts has continued for the seventh consecutive month after three years of declines. This suggests that PCL may be influenced by other factors and the recent interest rate reductions may have a limited effect.

Despite the ratio of available stock to monthly sales at 25:3 in Q1,2024 to 22:6 in Q2, 2024, supply remains high, with an above long-term average of 20. Consequently, sellers must maintain realistic expectations regarding property prices, especially as the market broadens and buyers are presented with more options.

Key takeaway:

  • Demand is rising, but price drops in PCL are likely to continue as supply remains high.

The Government’s taxation updates and potential impacts

Lastly, we address the central government’s upcoming taxation regime, due to be announced in October, and its potential impact on the housing market. The Labour Government’s mandate is pro-growth, with an expectation of coming into effect by 6 April 2025. However, the practical implementation remains uncertain.

They aim to boost public service investment and stimulate the economy without raising income tax, national insurance, or corporation tax, which constitute about 80% of tax revenue. Proposed changes include:

  • Taxation of non-UK domiciled individuals – individuals with 10 consecutive years of non-residence will be exempt on their foreign income and gains received in the first 4 years of residence in the UK. It is irrelevant whether the income and gains are remitted to the UK;
  • Introduction of VAT on private school fees;
  • Abolition of furnished holiday lets (FHL) regime;
  • Adjustments to taxation on carried interest; and
  • Changes to transfer of assets abroad.

It is unclear if the government can achieve growth with these mechanisms or if they will backtrack on promises. As such, borrowers, lenders, and property owners should stay vigilant in the coming months.

At Lawrence Stephens we are dedicated to helping our clients navigate these changes. If you have any questions or need assistance, please do not hesitate to contact our specialised Residential Real Estate team.

Emma Cocker comments on challenging bad references from previous employers in The Telegraph

Posted on: July 5th, 2024 by Natasha Cox

Emma Cocker, Senior Associate in the Employment team, comments on whether an employer can give a bad reference, and how employees can challenge a bad reference from a previous employer.

Emma’s comments were published in The Telegraph, 5 July 2024.

“An employer can give a negative reference, but it must be factual. Employers owe the subject of a reference a duty to take reasonable care to ensure the information it contains is true, accurate and fair. The reference must not give a misleading impression. If a referee gives a reference which is misleading, they may be liable for negligence, either to the new employer or the employee.

“In addition, if a referee knowingly includes false information with the intention that the recipient will rely on it, the referee will be liable to the recipient for a civil claim of deceit.

“It is difficult for employees to challenge a bad reference, unless they can demonstrate that the information was inaccurate, discriminatory or was given in retaliation for raising allegations of discrimination or whistleblowing. In practice, most employees will only become aware of a bad reference once a job offer has been withdrawn. At that stage, it is highly unlikely a prospective employer could be convinced to offer a role again, as the seeds of doubt will have already been sown.

“The only real option is for the employee to take legal advice to see whether they have a claim against the referee. If an employee does become aware of a bad reference before it has been shared with a prospective employer, they should try to discuss the reasons for the negative content with their new employer as soon as possible.

“Protecting your reputation is simple: be the best employee you can be. Courteous, on time for work and reliable – these are all behaviours employers hold in high regard. If there are circumstances which might affect your ability to comply with expected norms, such as being a parent or carer, or having a disability, discuss these with your employer as soon as possible so they are aware of any mitigating circumstances.

“There is a common misconception that employers are obliged to provide references. However, with the exception of regulated industries such as financial services, this is not the case. In reality, most employers will provide a “factual” reference, outlining the employee’s name, job titles and dates of employment, but they cannot be forced to provide further information.

“Employers are also entitled to include a disclaimer within the reference that limits any liability to the recipient of the reference. References may be given orally or in writing. However it is generally safer to provide basic factual references in writing with no further information given to avoid any liability to the employee or the recipient. If incorrect or misleading information is given, the recipient may allege negligence. Do not be tempted to say things on the phone that you wouldn’t commit to in writing!

“If you are not happy with a reference provided by your ex-employer, the first step is to find out whether the reference has actually been sent to the prospective employer. If not, you may be able to talk to your ex-employer and see whether they might be prepared to change the content. Remember however that they are under a duty to provide accurate information, so they may not be willing to change it. Also consider whether their approach or any of the information they have provided might be discriminatory, such as commenting negatively on high absence levels if you have taken a period of parental leave, or on your performance which has been adversely affected by a disability.

“If you have been given a bad reference because of or after raising concerns about discrimination, or after you have “blown the whistle”, you may have a claim against your ex-employer for victimisation or whistleblowing detriment. It is important to take legal advice at an early stage to assess whether you might have viable claims against the referee. This will be especially important if you have lost a job opportunity because of a negative reference.”  

If you have any questions relating to the above, please contact a member of our Employment team.

Government rejects ban on NDAs in sexual harassment cases

Posted on: May 20th, 2024 by Natasha Cox

In March 2024, the Treasury Select Committee delivered its’ report entitled ‘Sexism in the City’. As part of the enquiry, the committee found a ‘shocking’ prevalence of sexism and misogyny towards women working in financial services, and recommended a total ban on the use of non-disclosure agreements (NDAs) and clauses in all harassment cases.

In its response to the Select Committee’s recommendations, the UK government has now pushed back against a move to ban NDAs, saying that they would already ‘most likely’ be unenforceable when reporting a crime to the police. In the Government’s opinion the law therefore does not need to go any further.

As part of the rationale for this decision, the government said, “When it comes to sexual harassment and discrimination, it is important to recognise that individual circumstances vary. The government consultation on ‘Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination’ in 2019 also heard evidence that many employees who sign a settlement agreement at the end of their employment with an organisation value the inclusion of confidentiality clauses, as they allow them to move on and make a clear break.” It added that an NDA would also be unenforceable if it sought to prevent a worker making a protected disclosure about wrongdoing to a prescribed person for whistleblowing purposes.

This move means that employers will be able to continue using NDAs in most common situations where a crime is not involved. It is important to remember, however, that other laws and guidance already exist on how NDAs should be used. These include  best practice guidance from the Equality and Human Rights Commission and Acas guidance for employers, as well as the Solicitors Regulation Authority’s warning notice on NDAs. In addition, all employers regulated by the Financial Conduct Authority must include a clause in any NDA making it clear that it does not prevent a protected disclosure.

Get in touch if you require further guidance on the use of NDAs in relation to allegations of harassment by employees.

Lawrence Stephens advises Blue Shield Capital on £25m facility loan

Posted on: May 17th, 2024 by Yvonne Uzoka

Lawrence Stephens’ Banking team recently advised Blue Shield Capital on a £25m facility loan provided by OakNorth.

The £25m loan will be used to empower Blue Shield to expand its real estate bridging loan portfolio at speed.  Our dedicated Banking team played a crucial role in supporting this deal. Their expertise and commitment ensured a smooth process despite the complexity involved.

The Banking team from Lawrence Stephens was led by Director and Head of Banking  Ajoy Bose-Mallick, with assistance from Senior Associate Ashley Wright and Trainee Solicitor Alex Ruder.

Ajoy commented: “Blue Shield Capital’s recent £25 million loan arrangement marks a significant milestone in our partnership. We’re thrilled to support their growth across various real estate sectors, and we look forward to witnessing their continued success”.