July 2018
By D’mitri Zaprzala, head of sales at Octopus Property
When it comes to financing buildings and developments, there are many considerations for a property lender. Does the deal make sense? How liquid is the asset? Does the borrower have a strong track record? Do underlying market trends support the use-class? Where is the asset located?
At Octopus Property, we look at all these metrics and often the one that outweighs all the others is the liquidity element - especially from a bridging perspective, where the exit strategy needs to be attractive.
Historically, London and the South East have been the most liquid markets in the UK, underpinned by the favourable demand supply dynamics for both residential and commercial property. But a shift is taking place, exacerbated by the macro-economic trends, as property professionals increasingly look to the regions in pursuit of capital growth and more favourable yields.
It raises the question of how much the location matters when it comes to a deal. We often get asked if there are any regions or areas which are more appealing than others. The short answer is that we are lending more across all the regions outside the South East, including Scotland & Wales. We pride ourselves on not having any geographical limits or quotas that stop us from lending in specific areas, and this is aligned with the growing demand from borrowers outside of London.
We are increasing the deals we’re doing in and around cities including Manchester, Birmingham, Bristol and Edinburgh, and continue to position ourselves to better serve our clients in those areas, including offering the flexibility, speed and certainty which come with an Octopus Property loan.
To support this growth, we have boosted our regional teams with a number of senior hires, including Carl Graham as North of England business development manager, along with six further regional business development managers. This has enhanced our local presence, allowing us to build great intermediary and direct relationships.
Given the profile of our clients, from small developers through to buy-to-let portfolio landlords to experienced housebuilders, we believe that it is important to offer the same proposition across the board regardless of geographical location. Looking at market dynamics alone will suggest that an asset in London is likely to be more liquid than one in Hull - however, our terms are consistent across the board and we are successfully rolling out a proposition that has worked well for us in our traditional markets across the UK.