Big Interview: Gary Bailey, Managing Director, Hope Capital

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Gary Bailey, Managing Director, Hope Capital

Hope Capital celebrated its 10th anniversary last year with surging loan volumes and applications. It says both it and the bridging industry can keep delivering in 2022.

Specialist bridging loans provider Hope Capital celebrated their 10th birthday last September with record breaking demand and the prospect of another fruitful year ahead.

Managing Director Gary Bailey says throughout 2021 the group, which provides loans of up to £5million for terms up to 18 months, achieved several company records with a 47% leap in loan book volumes and a 48% increase in applications.

“Since being established in 2011, we have achieved exponential growth and achieved multiple milestones. Reaching our 10th birthday was a testament to our achievements alongside our continued success in 2021,” explains Bailey.

Hope Capital saw the appetite for certain types of loan change last year particularly for options which facilitated light to heavy refurbishment projects.

“The pandemic and subsequent lockdown measures, undoubtedly accelerated demand in this product area,” Bailey states. “The fundamental shift was mainly owing to investors looking for projects where they can add value and see a quick return on investment.

There was and continues to be great opportunity for investors to capitalise on this, where well-maintained properties, especially those designed to fit the work from home trend, are being snapped up, sometimes within hours of coming to the market.”

Bailey says 2021 was also a year which reflected its corporate values of Integrity, Flexibility, Collaboration, Improvement and being Customer Focused.

“Our USP is our whole value proposition which is underpinned by service excellence. The overall proposition includes our highly competitive rates and the flexible options we provide.

We understand that individual circumstances – the borrower’s own financial position and the nature of the property they are investing in – will vary significantly from case to case,” Bailey states.

“This is why we make it our job to take all these different situations into account and do our utmost to lend in any scenario where the loan achieves the borrower’s aspirations, is affordable and enables a viable exit strategy.

Reaching 10 years in business proves we have successfully worked with many brokers, clients and stakeholders and that, understandably brings an expectation of trust and security.”

He adds that the bridging lending market is growing rapidly, however if it has learnt anything over the past decade, it is that brokers want a trusted lender who will not only provide innovative products, but most importantly, deliver what they say they will.

“We firmly believe that is it not right to make false promises and not be transparent. We pride ourselves on being completely open and honest from the get-go and are renowned for providing an excellent service, which sets us apart from our competitors.

This is why I believe we have reached where we are today,” he says.

In terms of that innovation Hope entered new spaces within the bridging finance market this year. This included the launch of a residential Development Exit Loan offering up to 80% LTV.

It enables borrowers who are in a position where their completed residential development is prepared for sale, to switch to a short-term, lower-cost funding option.

It also introduced a Finish & Exit product providing up to 75% LTV, with rates starting from just 0.70% per month and suitable for projects where the development has still not been finished perhaps owing to a project overrun or material supply issues being encountered.

“These provide options for borrowers who are either looking to replace development finance on a finished development prepared for sale or are in a position where they are looking to finish their incomplete residential development,” Bailey says.

“The decision to launch these was owing to the feedback we received from brokers. For example, there were a significant number of investors and developers who faced set-backs due to demand for building materials and labour and therefore, needed support to help exit their existing finance obligations.

Ultimately, how are you supposed to provide suitable options in the market if you don’t ask brokers first-hand what they would like to see and do your research?!

Every product we launched throughout 2021 took into consideration the feedback we received, which is why I think they were and continue to be so well received.”

Given that 2021 was a pandemic year with so much social and economic volatility Hope Capital also faced its challenges.

“Every time we predicted something would happen or started to believe things were starting to get back to ‘normal’, another hurdle arose,” says Bailey.

“But having an optimistic view is the only way to survive as a business. If you are unable to remain positive and adapt to the challenges posed, you can’t grow and succeed.

Ultimately, the unprecedented nature of Covid-19 required an innovative response, which I can confidently say, we delivered. We saw a surge in enquiries from borrowers and brokers.”

The plan, naturally, is to ensure this momentum continues into 2022.” We wanted to launch a range of new options in 2021 which would expand our offering, support our clients, as well as add something new to the market,” Bailey says.

“In turn, we are gearing up for a period of sustained growth, as we proceed with the next phase of our ambitious expansion strategy. We have lots of exciting plans in the pipeline so watch this space!”

Of course, expansion is not just about products, it is also about people. Hope has already recruited 3 new hires in January alone taking its team to 24 strong.

“Without a shadow of a doubt, a company’s success is down to the people within the business who execute the strategies and processes put in place, which is why I am so grateful to our team.

Looking ahead, we have plans to continue our recruitment drive and are welcoming applicants from all backgrounds, including those who already have industry experience, graduates and so on,” Bailey states.

“The key element for us when recruiting is that the person has a keen interest in the specialist finance market, transferable skills, is a dedicated team player and a high performing individual.”

So, what then of 2022 both for Hope and the industry itself?

“Predicting what will happen in the future is always difficult, however there are definitely certain areas we believe will set the tone in 2022.

Firstly, the increase in competition, as more bridging lenders enter the space, will no doubt continue. While this will create a challenge for established lenders to stand out from the crowd, strong competition is ultimately good for the market,” he says.

“With specialist finance solutions growing in popularity, it is important the industry continues to educate brokers who are still not familiar with how this type of finance can benefit their clients.

With that in mind, we feel very confident there will be a significant number of brokers who embrace and seize the opportunities bridging finance and in particular, Hope Capital can provide.“

Looking at product trends specifically, Bailey sees change of use projects, such as converting a commercial site into residential property, growing in popularity.

“As mentioned, refurbishment loans will also continue to be in demand, as well as loans which facilitate development projects.

Throughout 2021, development exit finance played a crucial role in the specialist lending market, with there being a substantial number of sales which stalled or fell through, subsequently leaving borrowers in a tricky position to meet their existing finance obligations,” he explains.

“Owing to the ongoing impact of Brexit and Covid-19, investors and developers will continue to be eager to find a solution, to ensure their investment plans keep moving.

Finally, we have noticed there are currently many borrowers looking at the North of England as an opportunity to make a higher return on investment, specifically in relation to HMO’s and holiday lets.”

In terms of challenges in 2022 he believes that the long-term effects of the government funding schemes which were introduced during Covid-19 are still unclear, however “it is highly likely we will have to support borrowers with whatever the impact of this is”.

But overall he stresses that the sector should have well…plenty of hope going forward in 2022.

“While the last two years have been a roller coaster ride for the specialist lending industry, with lots of ups and downs, the bridging market is resilient and is fast becoming a first-choice option for many property investors and developers,” he says.

Hope is rolling on happily into its second decade.