A short-term buy-to-let and bridging lender that doesn’t offer a product sheet is open for business called Octane Capital.
Octane has pledged to price loans based on the ‘real’ risk they represent, arguing that LTV-based lending is overly simplistic.
Its founder and chief executive Jonathan Samuels also started Dragonfly Property Finance, which has now rebranded to Octopus Property.
Samuels said: “Loan-to-value clearly has a role to play for any lender, including ourselves, during the assessment of risk.
“But in our industry we believe there is a huge over-reliance on it that can work against lenders and borrowers alike.
“Charging someone X% if they have a 30% deposit and Y% if they provide a 40% deposit is often misguided, as the borrower with the smaller deposit can be less of a risk once you drill down into the detail.
“As a result, we’ve decided to launch without a set product sheet with a list of rates based on loan-to-value.
“Instead, each loan will be priced according to its level of risk. This new blank canvas approach has left some people scratching their heads, but for us it’s a far more sensible way to offer loans.”