CFI: News Review
Commercial market has a spring in its step by
Guy Garrard, head of business
development, Tiuta
as spring has sprung the time has come to see some real activity in the commer- cial mortgage market. in what could be classed
as the year’s first major deal Whiteaway Laidlaw Bank ac- quired the commercial First Partnership platform, mean- ing it now owns the origina- tion systems, sales and new business teams and other infrastructure. WLB’s new commercial lending will be directed at Smes and distributed exclu- sively through intermediar-
ies. congratulations should be offered to all parties in- volved and let’s hope the in- termediary market sees new commercial products emerg- ing from this proposition sooner rather than later. there was positive news
from ricS’ commercial property market survey for Q4 2010 which suggested that 18% more surveyors said they expected new sales and lettings to increase in the next three months, a rise from Q3 2010. this is the best reading since before the onset of the credit crunch. Significantly it also states that in the last three months of 2010 overall tenant demand for commer- cial property stabilised with a net balance of zero (from -6). While the picture is clearly
improving surveyors contin- ue to cite uncertainty about the economy as a drag on the market. this was underlined in a report from investment Property databank which showed uK commercial property capital growth rates improved by just 0.1% in Feb- ruary, as stagnating yields and rents continue to contribute to a “lacklustre” market. the report suggested capi-
tal growth across retail and industrial property showed an average rate of 0.1% in January 2011, with office space flat lining at a 0% rate. average income returns re- mained constant at 0.6% for the 14th fourteenth consecu- tive month, giving a headline total return of 0.7%. Some good news could
be on the horizon for small to medium-sized enterprises thanks to some government intervention. Project merlin – i’m not sure where they conjured that name up from - will see the uK’s biggest banks lend £190bn to busi- nesses this year. Within this total £76bn is to be made available to Smes - an in- crease of £10bn on last year. the question remains of
how many Smes will actually benefit from Project merlin as lending is based on de- mand at the market rate. the jury is still out on how much appetite lenders have in this area but it will be interesting to reflect next year to evalu- ate whether this initiative has made any kind of impression on the marketplace.
Brokers must get ahead of the curve on bridging
by Gary Bailey, director, Blemain Group
the Financial Services authority recently held dis- cussions with the associa- tion of Short term Lenders and other industry players to talk about how short-term lending might be regulated in the future. this will be all the more important once second charge regulation is passed over from the office of Fair trading in 2012 – par- ticularly as the signs suggest that bridging will begin to play a far bigger part of the market in the near future. the last few weeks have
seen major lenders reduce interest rates and increase broker procuration rates across their bridging port- folios, signalling their intent to grow these areas of their business. and we are seeing significant numbers of new entrants coming into the market – brokers have more choice and more opportuni- ties than ever. the increasing number of options and competition in the market means we might expect brokers to take real advantage of the new opportunities. it came as something of a surprise then to see the results of a recent survey, which showed that 70% of brokers had not ar- ranged a bridging loan over the past 12 months. this
52 mortgage introducer APRIL 2011
suggests that many are still missing out on a real opportunity to grow their offering and provide more tailored solutions for their clients. it sounds obvious that a good broker should al- ways have a wide-ranging knowledge of the lending landscape but all too often niche products such as bridging can be ignored. With the market estimated to be worth somewhere between £1bn and £1.5bn and with mainstream lend- ers still closing the door to many would-be borrowers, it is more important than ever that brokers sit up and take notice.
Bridging finance is certainly stepping up to fill
the gap left by increasingly risk-averse high street lend- ers and its role is beginning to change. Bridging is no longer solely perceived as a product of last resort. rather it is seen as a viable and valuable tool for creditwor- thy borrowers to achieve their short-term aims while providing them with the time they require to attain their longer-term aspira- tions. the flurry of recent activ- ity in bridging makes it clear that the market is poised on the edge of the mainstream. it would be fair to say that the industry is coming of age, particularly given the positive commu- nication that is taking place with the FSa.
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