CFI: Opinion
This month we asked: With providers in the residential market more optimistic,
when do yonullnulllieve the commercial sector will show sinulls onullrecovery
some concerns for investors of england governor mervyn the difficulty in pinning down
when evaluating commercial King recently said the uK just how far down the road to
by
property transactions. the economy would continue to recovery we actually are.
Guy Garrard
latest poll from F&c invest- “bump along the bottom” as as we continue to see a
head of
business
ment shows that 52.5 % of inflation exceeds 3 % and this steady pick up in the main-
development
respondents are saying now may also apply to the com- stream market in terms of
Tiuta is a good time to invest in mercial arena. But when you funding, rising LtV levels
commercial property and the also hear stories such as how rising and softening criteria
i think it’s fair to say that remaining 47.5 % taking the iconic London address 52 it will be interesting to see
there is renewed optimism opposite view. grosvenor gardens has re- if any of these factors have a
across many areas of the While several of those com- portedly been sold for the eye knock on effect on the com-
mortgage market from main- menting said they expected watering sum of £40 million, mercial sector. there is always
stream through to the com- the commercial property making a sizeable £15 million opportunity within the spe-
mercial market but another market to stagnate over the profit in less than a year, then cialist markets if the timing is
consistent factor is that this coming year, some took the it is evident that there is still right and funding is in place.
optimism is capped with a view that property was on the money floating around the i can’t foresee any immediate
steady as she goes mentality. up, and others said they had economy. wholesale changes happening
this is no bad thing. the last already invested and intend- Whilst recent intermedi- in the commercial market but
thing we, as an industry, want ed to remain so. one com- ary market optimism suggests there are enough indicators
is to hurtle back to the helter mented hopefully: “i’m pray- a tepid degree of confidence to encourage brokers to be
skelter days of lending with a ing it’s also time to invest in filtering back into the sector, looking closer at identifying
clipped degree of responsibil- residential as well.” when combined with the at- the needs of their clients both
ity. unveiling the recent quar- titude of the more bullish, ag- in terms of their business and
inevitably there are still terly inflation report, Bank gressive investors it highlights personal requirements.
by
guessing when this may come? iFas have adapted to a good commercial finance
Stephen
happen is difficult. commer- the market conditions better adviser – so there will be op-
Johnson, cial First played a key role in than mortgage advisers, be- portunities to win clients.
sales and
the market (circa £1 billion of cause they have other services We have recognised
marketing
director
lending in 2007) and remains and products to fall back on. the need for our own busi-
Commercial
100 % committed to a return. there is a very clear lesson ness to evolve and have
First We are more convinced than here for commercial finance launched a commercial
ever that an intermediary fac- advisers. they need to work broker partnership - com-
our sector is currently ing lender can fill a significant their existing clients harder mercial First Partners
dominated by the clear- void in the market. and identify the other needs (cFP) - to complement
ing banks. the pre-crunch there are signs of a renais- that exist within their busi- our future lending activity.
healthy market in which sance in the securitisation ness or personal lives, rather the partnership brings
building societies, non uK market, and whilst this is cur- then relying on just one prod- together a national group
banks and specialist lenders rently restricted to residential uct. of professional brokers,
all provided a competitive assets, it is a necessary start. commercial finance advis- consolidating activity to
environment has now disap- most commentators believe ers need to add as many non- create a volume distribu-
peared. development fund- we are still at least 12 months traditional products to their tor of commercial property
ing has been severely limited away from this making a dif- proposition as they can. they and business finance
and mezzanine finance has ference to the lending prod- should invest some time in products. We are specifi-
all but disappeared. new im- ucts available. building a customer database cally looking to identify new
petus is likely to come from a So 2010 will remain dif- that will enable them to com- sales opportunities and
growing band of smaller pri- ficult. no business in the municate and understand the develop a model with client
vately funded lenders. there commercial finance sector needs of their clients. af- relationship building at its
are signs of more appetite by can afford to just wait for a ter all, business owners are heart.
the main clearers, but the sec- return to the good old days – working harder than ever to market conditions are forc-
tor desperately needs fresh so what can broker firms do survive, have less time to re- ing change, maybe from the
lenders to create tension and now to increase their chances search their financial options, ashes a better way of doing
competition. of generating sales and in- and will need the services of business will emerge.
40
mortgage introducer march 2010
MI p40-41_0310.indd 2 23/02/2010 11:06
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