Wales

How easy is it to secure bridging finance in Wales?



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There are many more options for those looking to secure bridging finance in Wales than there were five years ago due to the significant economic investment in Cardiff and Swansea, according to one Welsh-based broker.

A survey by the Royal Institution of Chartered Surveyors found that the housing market in Wales was moving upwards with prices and sales rising above the UK average during the first quarter of 2018. 

Ben Lloyd, managing director at Cardiff-based broker Pure Commercial Finance, claimed that many bridging lenders had become more willing to move into Wales.

“The decision for many to now lend in Wales is a logical one, especially given the significant economic investment in Cardiff and Swansea over the last five years which [makes] the whole proposition a much more attractive one.”

Ben said that he had also noticed a rise in demand for bridging finance in Wales, adding: “…We are getting more regular local deals and also deals in mid and north Wales, which were even more rare previously. 

“It’s not just the big cities that are encouraging investment.”

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How strong is the demand for bridging finance in Wales?

“We have been strong supporters of the Welsh agriculture community since our launch and have made around 25% of our loans to Welsh farmers,” said Rob Suss, director at UK Agricultural Finance.

“Given the uncertainty of the effects of Brexit on the farmers in Wales, there has been increasing interest from the rural community in diversification strategies and business improvement, as a way to buffer the potential changes.”

John Hardman, head of sales at Bridging Finance Solutions, said it had always completed a decent amount of business in north Wales. 

“I would place Wales in among the Midlands and North of England as parts of the UK which have not only shown consistent growth in demand for short-term finance, but continually show signs that this trend is sustainable, particularly for smaller development projects under £1m that are traditionally overlooked by the banks.”

Jack Coombs, director at Aspen Bridging, added: “At Aspen, we have always been keen on Welsh projects and a fair proportion of our book is here. 

“We have had more enquiries recently as our links to Welsh brokers are developing and expect to do far more deals this year than in 2017.”

Neil Molyneux, head of sales at Masthaven, said bridging cases in Wales represented a strong chunk of its casebook and had seen cases in the region rise by 17% since January.

“With bridging finance cases growing month-on-month at Masthaven, we expect this trend to continue. 

“A particular growth area we’ve identified is development, with many customers in Wales seeking short-term finance to kick-start a range of building and renovation projects.”

Research from UK Finance found that in Q1 2018, there were 3,300 new homemover mortgages completed in Wales, up 3.1% on the same quarter in 2017.

Alex Upton, sales director in the specialist mortgages team at Hampshire Trust Bank, felt that this growth in mortgage demand in Wales could see demand for bridging also increase.

“Wales could be seen as an attractive option for potential landlords and developers, which can only have a positive impact on the bridging market.”

Mike Walters, head of sales for mortgages and bridging at United Trust Bank, said that since increasing its presence in Wales, it had “easily” doubled its bridging business volumes in the region.

“There’s a real positivity in Wales at the moment and the likes of Cardiff, Newport and Swansea have seen significant investment and redevelopment. 

“They are almost unrecognisable now compared to a few years ago and we expect that programme of growth and improvement to continue.”

Chris Whitney, head of specialist lending at Enness, said although it didn’t have issues with placing loans in Wales, there were some areas which were more difficult than others.

“…Values can be lower and thus loans smaller so this can sometimes be less attractive to lenders. 

“We often see some refurbishment projects that are harder to fund as some of the returns on cost that we see are quite low.”

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Will new and existing bridging lenders increase their presence in Wales?

“I’m pleased to confirm that we completed our first Welsh bridging loan just last week,” said Colin Sanders, CEO at Tuscan Capital.

“We expect further deals to follow. 

“However, it has become clear to us that the Welsh market is primarily a low-value area with the majority of bridging business being sub-£150,000 in value and so below our minimum loan threshold.

“This won’t stop us pursuing the right opportunities as they arise – and we’re always happy to engage with brokers in Wales who can supply business that meets our elastic criteria – but I think the low-value factor will act as a brake on the amount of business we can realistically expect to write.”

Steve Brennan, director of credit at ActivTrades, added: “As ActivTrades is a new entrant to the short-term market, we have not, to date, completed a loan in Wales. 

“We are, however, very happy to consider this as an area that we will lend in and welcome any enquiries relating to either residential or commercial funding in Wales.”

Jonathan Sealey, CEO at Hope Capital, said it had always lent in Wales and stated that he liked the market and didn’t see it as any different from the other places where it lent.

“While we continue to see a rise in demand, [we] will definitely expand our operations there to complement our lending around the rest of the UK.” 

Meanwhile, Ben concluded: “There are a lot now dipping their toe, but it’s good to see the bigger, higher-volume funders start to get their heads around the region.”

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