Wave of institutional funding could deliver rates drop

The mood in the market appears to have changed notably after a rocky 2019, which saw several lenders struggle for funding for a variety of reasons.

Samuels’ positivity in the funding sources for the market was echoed by OneSavings Bank sales director Adrian Moloney and HTB sales director of specialist mortgages Alex Upton.

Speaking at The Specialist Lending Event 2020, Samuels said: “I think there’s a whole wave of institutional money that wants to come into UK retail estate at the moment.

“It’s not only that I don’t think funding lines will be pulled, I think there will be an expansion and potentially a cheapening of funding which hopefully will filter through the market to cheaper rates.

“We’ve certainly been approached by institutional lenders and I’m sure we’re not alone. UK real estate is attractive and this certainty we now have has made it even more attractive,” he added.

Upton agreed, noting: “With interest rates so low and set to remain low, capital markets are hunting out yields and they are going to come to the mortgage market to find those yields, so I don’t think we should be concerned.”

Return of sealed bids

Asked whether there was any need to be concerned about lenders’ funding lines, Moloney was equally upbeat.

“No not really. We’re retail funded and we also securitise and there seems to be good demand in the market for securitisation,” he said.

“I don’t see it as a challenge. With Brexit we now have some form of certainty and the UK property market seems a fairly positive place at the moment.”

Moloney added that he was starting to see reports and anecdotal evidence of sealed bids and demand for stock in the South East returning.