5 years before liquidity returns for property investors

5 years before liquidity returns for property investors


Even in the face of recent growth in the bridging market, the majority of alternative finance professionals believe that the government is not doing enough to promote the health of the property market, a joint report from bridging lender Montello Bridging Finance and Property Week suggests.

The research found that 76 per cent of respondents said that they did not think the government was doing enough to help free up credit to the property market, with only 13 per cent satisfied that they were doing enough.

They also thought that it had actually become harder over the last 12 months to obtain property-related finance for investment or development.

Even though 73 per cent of those asked thought that the current market was providing property investors with worthwhile opportunities, over 84 per cent maintained that they did not think that banks had increased their appetite for property lending over the past year.    

81 per cent of respondents also said that they had lost confidence in a ‘traditional banking model’ in the wake of the credit crisis, with a vast majority also suggesting that it would be at least five years before banks would be lending like they were in 2005. Over half said it would take ten years or more, with almost a third saying that lending from banks would never return to pre-financial crisis levels.

Christian Montello, Managing Director of Montello, said: “The research revealed a lot of things about the property finance market that we already knew. We are well aware that it is very difficult to obtain funding in the current market.

“What was surprising, however, was how bad respondents said it was in the current market. Most are seeing opportunities that they want to capitalise on, but are simply struggling to obtain funding.

“The Property Week/Montello report shows that there is a very important role for alternative lenders, such as Montello, to play in this market. There is a huge gap left from the dearth of bank lending, which to some extent will be filled by alternative lenders.”

The project polled the Property Week readership and attendees of an industry round table hosted by Editor Giles Barrie and Montello Managing Director Christian Faes, which included representatives from Cheyne Capital, Pramerica (the property arm of financial services company Prudential), Pluto Finance and the National Association of Commercial Finance Brokers (NACFB).


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