Delivering complex finance solutions in a challenging environment

by Tom Madden, Director – Structured Property Finance

Contact the team to discuss your next Structured Property Finance project. 

I’ve been in real estate finance for nearly 20 years and each year has brought its own surprises and challenges. From unprecedented property value increases and decreases, to wholesale regulation changes to the Global Financial Crisis; my time before LendInvest was never dull. 

Over the last seven years I’ve worked in various roles on the lending side of our business and this trend of eventful years has only continued. 

At the start of 2022 I remember being asked for one wish for the UK Property Finance Sector for the year and I answered, as I’m sure most in the industry would have, simply for stability. 

Well it serves me right for being so obvious as stability is as far from a description of this year as you can possibly get. 

The market has fared well

So where do I start…the Ukraine War, Inflation levels unseen in more than a generation, the Energy Crisis, three Prime Ministers (too many Cabinet changes to think about), Trussenomics, eight interest rate increases to the highest point in 14 years, and (although not technically yet) most probably a recession! 

All that said, the market hasn’t fared as badly as you would expect if you could have foreseen all of the events that crashed upon us. 

At LendInvest we’ve continued to show strong growth across the business, lending record levels, attracting new funding lines and releasing new innovative and market-driven products.

Our Structured Property Finance team of myself, Justin Trowse, Gary Clark and Michael Minnie have worked with growing numbers of specialist structured finance and capital markets introducers, plus developers and property investors of all shapes and sizes.

Between us we have over 70 years of Property Finance experience which has held us in good stead to deal with over £3bn of secured finance enquiries over the course of the last 12 months alongside our amazing dedicated large loan underwriting team.

Adding value

The team’s focus over the year has been on planning plays, residential lead developments and development exits but we’ve also continued to support commercial bridging, including securing and enhancing planning. 

We have the funding ability and expertise to consider any large, complex or underserved short-term property finance requirement from £1m (or less) to £50m+ and can also access our BTL portfolio product, new for 2022, from £20m+.

This great offering is worth little without the relationships we build with our customers and the trust that they can place in us to find the right answer and deliver when we say we will. 

Over the last few months clearly the appetite of lenders across the market has changed, with house prices forecast to fall over the next 12 to 24 months, commercial yield volatility and an upcoming recession it’s not surprising that some funders have paused or even stopped lending (or had this decision made for them by funding partners/investors).

Other specialist lenders have gone back to basics; only offering more vanilla security types, smaller granular loans or significantly cutting LTVs back.

Our brokers and borrowers are telling us that the appetite is still strong as long as the funding is available. 

Developers will be looking to sites that become unviable for the existing owner or where price expectations will soften. 

Adding value will be the basis of smart transactions from buying unconditional land or sites with potential, properties with conversion angles or splitting large titles to make the most of the re-sale or refinance values. 

Clearly in hard times more opportunities can surface for those who have a solid foundation and we will look to support our customers and the market during this time to find funding solutions that work for all parties.

Not predicting anything

After last year, I’m not going to dare to make a wish for 2023, but I do expect the role of the bridging market to become evermore important in the UK property market as funding appetites fluctuate and new opportunities arise.

Lenders with diverse funding, in-depth expertise and relationship lending will be a must for anyone requiring large or complex property finance in the year to come and I’m glad to say LendInvest and our Structured Property Finance team tick all of these boxes. 

Contact the team to discuss your next Structured Property Finance project.