Belfast’s short term lending boom
By David Craik -
The Northern Ireland bridging market is set to accelerate in the months to come as businesses from Great Britain and around the world see it as a perfect area to relocate or open new offices.
“There is long term growth here particularly in residential where we could benefit from what has happened in Dublin,” he says. “House prices have gone through the roof in Dublin as international employers set up business to take advantage of its well-educated and highly skilled workforce.”
Northern Ireland is a great place to grow a business internationally – it has highly skilled talent, excellent infrastructure, competitive costs and a supportive, business-friendly environment.
We are seeing that more employers are recognising this by relocating here which can only be a positive for all property sectors.
In the Covid world of remote working and online communications it is refreshing to hear that the old style of business is still carrying on as usual in the Northern Ireland capital.
“It is quite a small market here in Belfast and often we know the people we are lending to or the property that we are lending against” he says.
“That gives us a far better picture on the deals and what we are lending into. We go out and meet people face to face, we see them in the coffee shop or pass them in the street.
It is far more personable to put a face to a name rather than doing everything online or on the telephone. That is the benefit of having a regional presence. People recognise you, see the sign above the office and are more likely to come to you with a deal.”
Ortus which was set up in 2013 and with offices throughout the UK in London, Belfast, Manchester, and Glasgow; offers residential, auction finance, development exit and commercial loans, as well as buy-to-let and holiday let solutions for developers, property investors, and property owners.
The Ortus door has been knocked on a much more regular basis since the onset of the Covid pandemic.
Eastwood explains that a lack of lending from the pillar high street banks in Northern Ireland – driven both by longer term repositioning of those banks and as an immediate reaction to Covid and the resulting economic uncertainty has largely been maintained – has led to more demand for bridging.
“We are seeing deals across the whole market because of the lack of supply from more traditional finance sources. We saw an increase in enquiries when the market opened up again last May and it has remained strong since,” he says. “The outlook for Northern Ireland looks very positive in the months and years ahead.”
Eastwood, who joined Ortus this March after spells with First Derivatives and more recently Link Asset Services where he worked as an Asset Manager, says he is busy underwriting on both Northern Ireland and Great British deals for commercial and residential clients.
“My particular focus at the moment is residential, bringing deals from the initial approval stage right through to drawdown.
The GB deals come from our teams in Manchester and London where we do some of the underwriting here in NI,” explains Eastwood.
“I also manage communications between solicitors, borrowers and our introducers. I also like to turn my hand on the sales side of things in Northern Ireland where possible.”
The biggest demand in NI is at present residential and industrial as investors see them as being more solid and safe investments during Covid.
Residential bridging, which Eastwood describes as “popular” is also being driven by Ortus’s rates for standard residential bridging loans starting at 0.499% per month for loans between £100,000 to £1million at up to 70% LTV.
“We are generating a lot of business off the back of that,” he states. “The new rate has been hugely popular with our brokers and their clients across the whole of UK and has meant that a lot of my time over the past month has been dealing with brokers in England, Scotland and NI.
We’ve also listened to the feedback from the broker community and have streamlined our processes and updated our legal panel to reflect the more straightforward nature of this sort of product – something we know is key in our industry”
“Clients are coming to us because they are looking for a quick turnaround time and are experiencing delays with bigger lenders.
Speed is critical in bridging finance and it’s what makes it an attractive option for so many who need to raise funds within a short timeframe.”
It has seen demand from people wanting to complete deals before the end of the Stamp Duty holiday, property owners looking to refurbish dilapidated properties and developers looking to exit.
“Borrowers often approach us if they have a few properties left on their development which haven’t sold yet, and they want to release equity for onward projects,” Eastwood says.
“Because of supply and material squeezes as a result of current challenges such as Covid and Brexit we have seen a number of development projects which have run over their time frames and budgets.
They are running into default interest and higher lending rates, and we have stepped in to take them away from that and help them bridge the gap to complete sales and move on to other projects.”
On the industrial side it is also seeing huge demand for warehouses as E-commerce demand grows.
“Values and rentals for sheds and large industrial units to store products are showing strong growth. We are seeing demand from clients wanting us to facilitate fast purchases and turnaround times,” Eastwood says. “Many businesses are moving online and don’t need such a big high street presence anymore.”
Ortus however is bucking the trend it seems and remains ambitious for the NI business.
“We have big plans for the Northern Ireland business, we are in the process of recruiting and are always keen to bring in new products,” Eastwood says.
“There are obvious risks to the market with the end of the furlough scheme and covid variants but I am very positive about the NI market.”
David Craik is a freelance journalist writing news, feature articles, blogs and guides for national newspapers and magazines. His main areas of interest include finance, property and investments.