Jon Salisbury

Lessons from Screen Time

My iPhone recently updated and presented me with a new Screen Time function which tracks my daily and weekly usage.

It’s been an eye-opener. I spend too little time talking on the phone, too much time writing emails and way too much time looking at news websites – ranging from the FT and BBC to the Daily Mail and Daily Mirror. 

Getting off the emails and on to the phone has been great for time management and effectiveness. However, reducing my attention to news websites has been even more beneficial – mainly because the stories seem so negative right now.

And, of course, there are some good reasons to feel negative. UK gilt prices are rising, foreign property buyers are proving cautious, certain parts of the property market seem illiquid, a no-deal Brexit seems eminently possible and – whatever people might feel about this politically – the markets don’t seem to relish the prospect. 

However, negativity is fuelled by scrutiny and while any responsible businessperson has to keep abreast of the news, it is also important to focus on the factors we can directly control.

As lenders, this means analysing deals carefully and on their own merits.  

We hear in the market that CIS clients are struggling to find mainstream lenders to refinance bridging loans.  

However, we have recently provided facilities to several CIS clients who have successfully repaid through a combination of refinance and asset management. Our underwriting focuses heavily on their business background and demands high levels of transparency – plus we have benefited from the skills of quality introducers. Perhaps this explains why our experience in this sector has been positive.

We hear in the market that the high-end London property market is stuck. Our view is that it’s very much location-driven and depends on the definition of ‘high-end’. Several of our clients have recently secured sales on prime London properties ranging from £4m-£9m. It has taken them a few months longer than they originally intended, but the market has been there for them. Indeed, we have recently completed several marketing bridges to help clients with expiring development finance facilities. We have financed properties from Portsmouth to Yorkshire to Dundee and buyer-demand in these locations has been fine.

Several of our friends in the industry persist in their view that Northern Ireland is a risky area to do business. They point to the political climate and potential issues around post-Brexit hard/soft borders. However, achievable property prices, an educated population and a vibrant business environment creates great opportunities and our experience continues to be very positive. That said, we are – and always have been – very mindful of specifics around location, property sector and borrower quality because it is a market with fine margins.

Finally, we don’t share the commonly held view that pubs and hotels are particularly vulnerable to an economic crash. They are certainly not immune, but again it comes down to the specifics of the business. Many operators definitely stand to suffer from a collapse, however, our experience suggests that others will see a change in their customer demographic, but their financial performance will largely sustain.

So, my new experience with Screen Time has been a timely reminder that tumultuous times require lenders to focus more than ever on what they actually know. World events and headlines must be reviewed and factored into decisions, but lender experience, client quality and deal specifics should always prevail.

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