UK Mortgages Limited and TwentyFour Asset Management LLP announced that the company has completed the arrangement and signing of a new warehouse facility arranged by HSBC Bank plc, called Cornhill Mortgages No.5 Limited. This will fund the forward flow purchases of newly originated owner-occupied residential mortgage loans from the Company’s ongoing arrangement with TML following the completion of the pre-funding phase of the Barley Hill No.1 securitisation from earlier this year, which concludes in August. The transaction is intended to fund portfolio growth to a size suitable for a further public securitisation into what will then be expected to be the second Barley Hill transaction. Unlike the previous forward flow warehouse for TML loans arranged in 2016 (which was fully capitalised from the outset as TML, whilst operated by a highly experienced lending and management team, was a new lender at that time, and furthermore UKML’s the company’s capital position was then at a large surplus) this transaction employs a far more efficient incremental capitalisation structure, similar to that employed with last year’s Cornhill 4 transaction. This new structure will allow the company to maximise the efficiency of capital deployment and therefore leverage, minimising the cost of undrawn commitment fees. Performance of the original loan pool has been extremely strong with just 4 loans from over 1350 more than 3 months in arrears at the end of June 2019, and with a low weighted average Loan-to-Value ratio of 67.9%. Whilst lending criteria are likely to evolve on an ongoing basis in response to changing trends and needs in mortgage markets, the risk profile of the new portfolio is expected to remain broadly similar to the previous one. Furthermore, after slower than expected initial lending growth, primarily due to the effects of the post-Brexit-vote extraordinary monetary policy measures introduced just after TML began operating, TML have more recently been successfully growing their origination volumes, with July 2019 being a record month for both applications and completions.