Article: Specialist lending opportunities remain strong in North West

Jo Parr, Director at Close Brothers Bridging Finance, spoke to Bridging & Commercial magazine this month about the opportunities and challenges for housebuilders and investors in the North West, and her plans for the year ahead.

Taken from Bridging & Commercial, Friday 10th May.

With a career in the financial services industry spanning almost 40 years, the industry veteran spoke to B&C about an “extremely busy” start to 2024 for Close Brothers Bridging Finance and why the lender is seeing greater demand for specialist finance.  
 

What brought you to the bridging finance industry?

I have always had an interest in property and an opportunity arose when I worked for a privately funded lender, when bridging finance was new to the market and sounded like an exciting challenge — the market is constantly evolving and, with that, comes new challenges to solve.

What did you want to be when you were growing up?

I always wanted to be a hairdresser or a beautician.

What is the most interesting aspect about the bridging market?

Every deal that crosses my desk is different and I really enjoy working with so many individuals from different walks of life.

Bridging is an extremely fast-paced industry given the short timeframes in which to complete; we aim to provide indicative terms of a deal within 24 hours of receiving a proposal and a formal commitment to lend within just one week.

Even though working to such deadlines can be stressful at times, it’s incredibly rewarding to help developers secure financing so they can get projects underway.

What has been the most surprising thing you have noticed about the industry throughout your career, and notedly the past 12 months?

When I first entered the industry, bridging finance was a new concept. It has been encouraging to see the professionalisation of structuring bridging finance deals over the past eight years to the high standard we see today.

What growth opportunities and challenges face the development and bridging industry over the next 12 months?

There are many challenges facing SME housebuilders and investors, from planning delays and costs in obtaining planning permission, to high interest rates and a slowdown in sales activity. These factors are impacting SMEs’ liquidity and therefore hindering their ability to move on to the next project.

What is unique about the specialist finance market in the North West, and where are the growth areas?

The North West has great opportunities for growth, especially a thriving city such as Manchester, where my team is based. We are proud to be assisting SME developers with their aspirations of growth, both in the city centre and the more rural areas, where some fantastic regeneration is taking place.

What key issues do specialist finance brokers face in the North West?

The key challenges brokers are facing are increased interest rates and managing their clients’ expectations — coupled with increased build and labour costs and a slowdown in sales, this is creating a very challenging environment for smaller housebuilders.

According to our latest report alongside the HBF, 87% of SME builders in the North West and Yorkshire believe support offered by the government has been insufficient [according to research by Close Brothers Property Finance, the HBF, and Travis Perkins].

I hope there will be more focus on housing following the election later this year, which will hopefully provide SMEs the support they need to build more homes.

What has 2024 shown you so far in terms of trends within the specialist lending market?

It has been a busy time for bridging lenders amid uncertainty in the mainstream mortgage market. We’ve seen an increase in the number of properties purchased at auction, driving greater demand for bridging finance.

At Close Brothers Bridging Finance, we have seen our loan book increase by over one-quarter in the past two years and had an extremely busy start to 2024.The market overall is extremely competitive and therefore it’s important to be innovative and offer a highly personalised service to meet the needs of customers.

What new ideas are you looking to implement over the next year?

We are always looking for new ideas for how to support the property industry, in particular SME housebuilders.

We are focusing on a number of initiatives at Close Brothers this year, including our network for young and aspiring property developers (Tomorrow’s Developer), our commitment to supporting Women in Property, and the ongoing work we do with a number of trade bodies in the UK, to support housebuilders and to try and solve this country’s housing crisis.