Northern Ireland

More lenders expected to enter NI market

The opportunity for expansion in to the Northern Ireland property market is now "too good to miss" according to one bridging broker.

The latest poll conducted by Bridging & Commercial has revealed that 44% of finance professionals consider Northern Ireland (NI) to be the UK region most underserved by lenders.

This belief was corroborated by Paul McGerrigan, Northern Irish national and CEO of, who explained that an erratic past was to blame for the current lack of lending options.

“This is mainly due to the fact that the property price explosion – as a result of the peace process and significant investment coming from southern Ireland on the back of the Celtic Tiger – and following implosion – due to the global recession – left some lenders with unacceptable losses.

“Unfortunately, that has been their only experience of lending in Northern Ireland during a one-off period caused by a unique set of circumstances.”

Jon Salisbury, managing director of Ortus Secured Finance, admitted that the market had not yet fully shaken off this reputation.

“…The recession saw Northern Ireland property values fall by a higher percentage than the rest of the UK and the recovery took longer to kick in, therefore, many lenders still view it as a high-risk jurisdiction.”

‘More lenders will look to enter the market’

During the recession, Northern Ireland property values fell by a higher percentage than the rest of the UK

Despite Paul now believing that the market is healthy, stable and lower risk than many areas of the mainland, Jonathan Sealey, CEO of Hope Capital, revealed that unpredictability in the wider market was still preventing lenders from entering Northern Ireland.

“…We were ready to launch in Northern Ireland in 2016, but then Brexit happened.

“As a result of the UK’s decision to leave the EU, we saw an uplift in mainland UK lending, so we decided to delay entering the Northern Ireland market.”

Nevertheless, Jonathan did recognise the appeal of lending in Northern Ireland.

“…Many English lenders simply do not know or fully understand the market there and it is not mainland Britain, which has dissuaded some lenders from lending there.

“However, it is becoming increasingly important that lenders cater for borrowers’ diverse requirements, so it is likely that more lenders will look to enter the market.”

While Jonathan believed competition would drive lenders across the Irish Sea, Paul instead suggested that the allure of the Northern Ireland market may prove too strong to ignore.

“NI is an incredibly attractive opportunity for lenders looking for growth opportunities.

“Market entry barriers are very low and margins are healthy.

“I think the opportunity for lenders to increase lending through expansion into NI is too good to miss.”

‘It won’t happen overnight’

The Northern Ireland market has numerous micro-economies

Jon agreed that more lenders would enter NI due to the market’s sustainable property values, but warned that doing so was no mean feat.

“…Northern Ireland is a specialised market with a unique legal system and numerous micro-economies, so responsible lenders are rightly cautious about jumping in.

“…It took us over a year of detailed due diligence before we did our first deal in Northern Ireland and other lenders will inevitably follow similar processes, therefore it won’t happen overnight.”

Last year, Ortus Secured Finance revealed that it hoped to treble the size of its lending book in Northern Ireland by the end of 2017.

Similar growth was recently enjoyed by Danske Bank in Northern Ireland, who reported a 96% year-on-year rise in new mortgage lending approvals during 2016.

“It is clear that the Northern Irish economy is performing well, and although it is a few steps behind some other areas of the country, there is plenty of room for further economic growth,” Jonathan added.

“In light of this, we have been over there a number of times in the last six months and we will be looking at breaking into the market very shortly, possibly in the first half of this year, although no decision has been made as yet.”

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