Page 8 - The Pulse Issue 9

Contributors
When Volatility Knocks,
Specialist Finance Thrives
Hear What the Experts Have to Say
7 8
So, what’s next for bridging, commercial and Alex Alexandrou, Octopus Property: Whilst buy to let
landlords have had to be resilient over the last few years, we
second charges?
have found that those landlords who are willing to adapt can
still do well in the buy to let market. We have seen record levels
These business areas are currently doing well but will these of applications from those landlords wanting to buy houses of
alternative funding sectors continue to thrive when faced with multiple occupancy (HMOs) or buy homes and turn them into
Brexit and stricter regulatory regimes. We’ve asked the experts HMOs. Yields are typically higher for these properties, as is the
at Bridging Finance Solutions, Octopus Property and Norton opportunity for capital appreciation. The changing landscape of
Finance, to give their views on their own individual areas of the UK property market means that there are still opportunities,
specialism. just not where they were previously.
Alex Alexandrou The property landscape is certainly changing with new investor
hotspots thriving outside of the M25. Specialist lenders have
Business Development Manager been quick to cater to these new demands; the key question is –
are enough Brokers also moving with the times? What do you feel is the best way
for Mortgage Brokers to proactively
seek bridging business?
Let’s Talk Bridging Finance
John Hardman, Bridging Finance Solutions: I think there is
sometimes a “fear of the unknown” with bridging and development
which prevents brokers from seeking out opportunities. In my
Which geographical locations are experience, we see so much feedback around how easy and slick
you experiencing the most growth? our process is from beginning to end, especially from first time
introducers once they have got that all important first deal away.
And why? My advice would be to advertise that you are active in the short
term funding market, profile it as a service you offer whenever
John Hardman, Bridging Finance Solutions: Without doubt you are networking and then once the enquiries come in we will
John Hardman the Midlands and North of England have seen higher demand in work closely with you to ensure your client’s expectations are
Head of Sales the last 12 months as shrewd investors seek to maximise yield met from the very first day. Ultimately we end up with a satisfied
whilst still retaining an element of capital growth. In addition,
client
bargain hunters have flocked to the auctions in these regions
and the number of auction purchases we have assisted with has Alex Alexandrou, Octopus Property: It’s an industry that
grown month on month. has always been based on a combination of the strength of
relationships and the quality of the offering, and this hasn’t
Historically these areas of the UK have seen much steadier changed. On top of this, we are seeing the increasing role that
growth and consequently have not been hit quite as hard technology is playing in the procuring of new business, as well as
whenever a property recession has occurred, you could almost a need to be able to adapt to the continually evolving real estate
say that investors are choosing steady over spectacular when landscape.
you consider pricing on property within the M25 for example.
Alex Alexandrou, Octopus Property: Investors are
increasingly looking outside of London and the South East, with
David Binney the North West, Midlands and South West especially popular. The Let’s Talk Commercial
National Business Development Manager traditional purchase of a one/two bed flat in the commuter belt
of London is no longer the obvious choice for investors. Instead & Development Finance
they will look for yield in areas of the UK where demand is high
or in alternative sectors such as student and HMOs (houses of
multiple occupation).
As councils continue to push the
developments of brownfield sites,
Do you feel bridging volumes have there’s been an increase in SME
been negatively impacted from the development. Have you noticed an
buy to let changes implemented in
increase in Property Developers
2017? purchasing land outside of London?
John Hardman, Bridging Finance Solutions: Personally, we
John Hardman, Bridging Finance Solutions: Development
have continued to enjoy sustained growth year on year, both in
terms of numbers and volume of cases. Inevitably the buy to is the one sector within our offering that has seen the most
let market will see an impact on the back of taxation changes significant growth. Projects we are currently involved with range
from a number of small self-build projects involving single assets
but clients are finding bridging an ideal investment vehicle for
a number of uses, not just purchasing buy to let property. Our up to sites where we have 10-12 houses under construction.
commercial view on bridging and development ensures that even
if physical purchasing has a lull, we can still assist clients in a What we do find is that for projects where borrowing requirement
number of other ways. is under £1m these clients are routinely overlooked by high
street lenders as the appetite is just not there. Our sweet spot