S P E C I A L I S T F I NA NC E Opinion
South East and East Anglia – vibrant and dynamic
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he South East and East Anglia is a rather unique place in England, in that it consists of two sizeable areas, but is generally treated as one region for business development purposes. Being in such an economically vibrant and dynamic region, so close to the country’s capital, the bridging market is vigorous. Each day I see cases ranging across all manner of complexity and risk. It is hugely thrilling to be an active part of.
Where and why? Watching the news, it might be difficult to imagine there being anything other than the most static and risk-averse business environment throughout England. However, in our experience, the story on the ground couldn’t be more different – especially in the South East and East Anglia. A recent piece in The Telegraph highlighted how demand for rental properties in London is such that would-be renters outnumber available rooms by six to one. This certainly chimes with our own experience, as we see the effect of ever more people being pushed out of the capital and into its surrounding areas. For instance, we are seeing a growing number of clients looking for funds to help convert existing properties from standard rentals to houses in multiple occupation (HMOs) in order to meet this increased demand from tenants. This is alongside the many cases consisting of land with planning deals a ached that are currently crossing our desks at HTB, which are o en experienced developers wishing to extend or adapt existing planning for extra units, as well as purchasing land
with planning – again, to meet this increased demand. In recent months, we have seen a surge of development exit deals for properties to be sold within Stevenage, Canterbury, and Medway Kent especially – suggesting that developers believe the economics of renting in London will push even more city workers beyond the M25, and that businesses will also increasingly choose to locate along its boundaries. Aside from this, we have registered greater interest in small extension and light refurbishment projects in an effort to bring up property yields. Although this is a significantly smaller growth area, it has always been a consistent source of business.
South East features Having moved from covering the South West of England, there’s a major difference between opportunities and yields. Partly because of its large holiday let economy, the South West features generally higher yielding properties, with refurbishment work being extremely popular. In this part of the country, clients might be people with a handful of properties under their belt, who are happy to keep what they have and not massively expand their portfolios. In the South East, however, the clients I speak to o en already have significant investments in the region and a deep knowledge of the local market. Decisions are based on a strategic reading of the situation, and many of them are prepared to invest heavily in major refurbishment and conversion works. This means that the brokers who operate in this area are tremendously focused on fostering quality, longterm relationships with their clients. The most successful brokers here
MIA HOUSE is business development director for bridging at Hampshire Trust Bank
We are seeing a growing number of clients looking for funds to help convert existing properties from standard rentals to houses in multiple occupation (HMOs) in order to meet this increased demand from tenants” don’t concentrate only on the initial enquiry, but seek to understand the bigger picture of a project, too; for example, why a bridging loan is necessary, how it fits into their client’s vision, and what their exit plan is – both plan A and plan B.
The affordability crisis The past few years have hammered the point that the future really is impossible to predict. One thing does seem certain, however: a larger and larger cohort will struggle to find affordable housing in the South East of England. While I won’t pretend that I have the answers to this problem – does anybody? – from my position I do get to see how bridging helps the market adjust to this need. Whatever does happen in future, I am certain this sector of the property market will continue to perform a vital function. ● November 2023 | The Intermediary
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