Phapano Phasha|Published
BRITAIN'S property market has had a punishing year. The Gulf conflict pushed oil past $100, inflation forecasts rose, hoped-for rate cuts vanished, and capital values turned negative, with first-quarter deal volumes at their lowest in nearly three years, according to UK market research and the RICS commercial property monitor.
Falling values do something predictable: they turn quiet loans into defaults, and defaults into enforcement.
Now the UK’s Financial Times reports that the family of Mahdi Al Tajir, owner of Highland Spring and once ranked the richest man in Scotland, faces defaults and creditor action across its property empire.
Creditors have repossessed a London home and are pursuing claims against family members, per the FT. But the name that recurs through the story is a Mayfair bridging specialist, Cohort Capital: co holder of defaulted mezzanine debt of R7.7bn (£347.5m) against the Park Tower hotel and up to R3.8bn (£171m) against Arlington House, and lender against family properties from a Kent castle to a West Sussex pub, lent against in January, whose owning company received a winding up petition from the tax authority last month.
That last pairing illustrates a feature of British insolvency that surprises outsiders: a secured lender stands at the front of the queue when a borrower fails, while unsecured creditors, suppliers and, for many debts, the taxman stand behind it. Cohort did not return the FT’s requests for comment, and there is no suggestion that it, or any lender named, has done anything wrong.
Strip the story to its dates, though, and a sequence emerges that should stop every borrower in this market.
The money against the family’s two flagship London properties was lent in late 2025. By the FT’s account, the Arlington House debt was in default within months of being agreed, and the Park Tower facility within the year.
Creditors are now enforcing, and the trophy assets are heading for the market. How much of that is mismanagement and how much is the arithmetic of high cost, short term debt in a falling market is a question the public record cannot answer.
But the speed of it, from loan to lost control in roughly a year, is exactly what the arithmetic of this product predicts when the exits close.
One detail in the FT’s reporting gives the sequence its sharpest edge. Among the assets the family is now trying to sell, asking R2.8bn (£125m), is 18 Carlton House Terrace, the St James townhouse Cohort lent against, a deal the firm’s co founder described in 2023 as proof of its “mettle in completing complex lending deals for the country’s most iconic residential properties”. Three years on, the iconic property is on the market.
Because this is how the product works. Bridging loans, as the FT notes, usually carry double digit annual rates and are meant as a stopgap until a sale or a refinancing. In a falling market both exits narrow exactly when the meter runs fastest, since rates step up on default and exit fees grow with the debt.
And both exits usually need the lender’s consent. A borrower who wants to repay can only do it by selling or refinancing, and if the lender you are trying to repay controls the road out, who is really deciding whether you leave?
That is the question that matters in every one of these stories: not why the borrower stumbled, but who controlled the exits when they tried to.
Credit markets have a name for the strategy at the far end of that question: loan to own, lending with an eye on ending up with the asset.
It is lawful, it is recognised, and nothing says any particular UK lender practises it. The point is that nobody checks.
Critics of the bridging sector put the concern more bluntly: these are, by definition, loans to borrowers mainstream banks will not finance, at double digit rates a stretched borrower will struggle to carry, so the lender is pricing the possibility of failure from day one, and in a falling market failure hands it a trophy asset at a discount.
Whether any given lender sees that as a risk or as an outcome is exactly the kind of question conduct regulation exists to ask, and Britain’s 1,200 unregulated "Annex 1" lenders face no conduct rules at all.
Britain has already seen what failure in this market looks like: in March, the bridging lender Market Financial Solutions collapsed, leaving its creditors facing an alleged shortfall of R29bn (£1.3bn), and it was that collapse that pushed the regulator into demanding answers from around 900 unregulated firms.
But the crackdown it triggered is about financial crime, not about how borrowers are treated. The line between a lender and a buyer in waiting is patrolled by no one.
For South African investors, the six questions this column set out in August now carry a market cycle’s extra weight, starting with the first: is your lender authorised, or merely registered?
And after the Tajir story, add a seventh, the one that sequence teaches: before you sign, know exactly how you get out, on what timetable, and whose consent the exit needs. Markets recover; rules catch up more slowly. Until they do, the contract you sign is the only shield you hold.