Looking at major differentiators in the North and South, the key areas are deal size and loan purpose.
From the Midlands southwards, we are seeing more ground up development enquiries and these have been typically over £1m in value.
While we have developed a niche for smaller developments, this has in turn led to larger more complex enquiries and we now have some great schemes underway, all sanctioned during the last four months.
Moving further North, there are now more opportunists looking to bridge on auction or purchase dilapidated properties where the intention is to refurbish and sell on or retain as part of a long-term investment.
Capital values at the lower end remain supressed and represent good value for those with a keen eye and a vision for the finished article.
As was the case pre-pandemic, the majority of interest overall remains focused on ground up development and part-finished schemes.
The latter has definitely been on the increase, so much so that we have seen some projects that are too highly geared for us to become involved – buyer beware.
On the flip side, we have completed a number of deals where clients have suffered delays by way of lockdown and have simply run out of time with their lender and need a boost of capital to complete.
Fewer lenders, more opportunities
Overall, confidence in the residential property market is slowly but surely returning.
Many long-term lenders have re-engaged with the market, particularly secondary and buy-to-let lenders who have also started to edge up loan to values (LTVs).
This in turn drives the confidence for us as a short-term lender because we often rely on the long-term market for repayment at the end of a bridge or development loan.
We remain in uncertain times.
However, with reductions in stamp duty, lower interest rates and a general returning appetite for residential houses and developments, we are seeing positive signs across the country.
The North and South continue to present challenges and opportunities largely based around geography and demographic. Fewer lenders have opened-up the bridging market to new opportunities, changing the business model for the ones who have stuck it out, including ourselves.