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The UK’s Next Top Property Investment Hotspots

The UK’s Next Top Property Investment Hotspots

by | Nov 30, 2021 | Latest News, Advice

With covid and Brexit, it was projected that the property industry would take a downturn. However, the property investment market has been one industry that has remained active through the past 18 months. A boom has been reported across The UK for both residential and commercial properties. However, it has seen changes within location choice. When choosing a property to invest in location is the top priority to get right if you are wanting for a high yielding future-proofed investment. House prices within the UK have risen the fastest in over 7 years, with an increase of 10.9%.

For many years there has been a significant north, south divide when looking into prospect properties. With the north and midlands being the favoured areas. A recent survey from FJP Investment has found the UK’s top property investment hotspots for the coming year. Although this has largely unchanged there was a slight change towards new areas.

The independent survey was completed by more than 500 property investors who have one to two more properties within the UK. Upon asking introduction questions it found that 44% of investors asked, wanted to expand their portfolio in the coming year. Within this, the location mentioned 40% of the time was London.

Following London for where property investors are considering their next purchase:

  • West Midlands 32%
  • East of England 26 %
  • South West 19 %
  • East Midlands 17 %
  • Yorkshire and Humberside 16 %
  • Scotland 15 %
  • South East 15 %
  • North West 13 %
  • North East 9 %
  • Wales 5 %
  • Northern Ireland 5 %

Lastly, the survey also found 44% of UK property investors are now considering more rural areas following the pandemic. Jamie Johnson, CEO of FJP Investment, commented: “London has retained its crown as an investment hotspot, despite speculation throughout the pandemic that the city may have lost its appeal as a place to live, work and invest. Yet our research also shows that regions such as the West Midlands and East of England rank high among investors’ wish lists, and we should expect these areas, along with the likes of the North East and North West, to attract a high level of property investment in the coming years.”

However, the best property investment areas all depend on your purpose and goals. Different statistics and data are better for different goals. If you are looking to buy and then resell you would ideally look for locations with capital growth. On the other hand, if your goal is a more build to let investment then perhaps consider areas that are better for rental yield.

Research conducted by Select Property used data such as rental dwellings growth, employment rates, number of start-ups, search volume around each of the locations, and property value. It drilled down into more specific city and town results for which is the best for property investment, concluding that Southampton ranked first place. Other top locations were Manchester and Liverpool all showing steadily growing employment and robust businesses. Lastly, Birmingham with the preparations for the Commonwealth Games 2022 well underway. It is predicted that Birmingham will be the fastest-growing region, with prices rising by 24% by 2025.

Adam Price, chief executive officer of Select Property Group stated “As the UK economy bounces back after the pandemic, investing in areas that have scope to grow in terms of population, employment and GVA will be key for securing the best ROI. Cities with excellent commuter links outside of London, or those with growing digital industries like Manchester will always be attractive to renters, meaning property investors can still find excellent value and opportunities in the right areas.”

How to finance your property development?

If you are looking to grow your development business or looking to renovate your next build-to-let project, you will need property development finance. This can cover a variety of options, loans, and mortgages for a vast array of eligible people.

Here at BLG we are experts in our field and have funded various buildings across the UK. We offer various loans and agreements. Providing access to our dedicated teams they talk you through your options for both commercial and residential property developers.

We pride ourselves on making fast decisions with flexible terms to allow you to move quickly, contact us today.

How To Successfully Get A Development Loan Application Approved

How To Successfully Get A Development Loan Application Approved

by | Nov 16, 2021 | Advice

As lenders, we see a lot of deals. However not all proposals are presented to us with the full package of information, and this can often lead to delays.   It is very important for us to do as much up-front groundwork as is possible. Personally, I am not keen to present a deal through my credit committee with too many gaps as these may not be able to be filled in later or the answers prove unsatisfactory meaning the deal may get withdrawn much later in the process which is not good for anyone.

So what information is required to successfully get a deal approved? Much of this will be obvious, but it doesn’t hurt to spell it out. I have split these between the scheme and the borrower.  Firstly,  the development itself, the following should be provided:

  1. Financial Appraisal – This should be up to date and as detailed as possible.  It should ideally contain a full GDV breakdown on a unit-by-unit basis. It should also be the latest version as appraisals of course evolve.  It’s also important to keep your funder updated of any changes as they occur
  2. Valuation Evidence – This can take the form of agents providing pricing for the developer, or a previous valuation maybe undertaken for a different lender.  However, an appraisal without such back up information is not ideal
  3. Plans and Planning Consent – It is very helpful for the lender to provide a copy of the planning permission (if granted of course) and the correct plans.  Quite often there have been changes and the plans provided either don’t tie up with the appraisal or the consent.  This may cause delays. Lenders will always want to visit the site and so as much information that can be provided ahead of any site meeting is very useful. Planning Permission will have preconditions and if as a lender we know what these are then we can make sure they are covered in the appraisal
  4. Contractors – If the development is going to have a third-party contractor, then information on them including accounts is most helpful fully appreciating that this is often one area where decisions have not been finalised

In terms of the borrower then the following should be provided

  1. Full CV and details of previous developments – These should include previous lenders used by the developer. It doesn’t need to be great detail but enough to give the lender a feel for the experience of the developer.  If there are any photographs or brochures of completed schemes, then these are always gratefully received
  2. Financial Information – These will take the form of accounts in the case of Corporates and statements of personal assets and liabilities for directors. This is often the area that can be the most contentious but for a lender is key.  Again, as much information as is possible here as early into the process saves time later

Of course, we all understand that not everything here is going to be provided immediately, particularly personal financial information but the borrower needs to be prepared to provide this as soon as it is requested, so having it ready is going to help everyone

It is also really important, to be honest.  So, if there is some adverse credit in the past, or ongoing CCJ’s then please tell us.  Most of the time we can deal with these but if we find out later (and we will!) and this hadn’t been disclosed then there is a likelihood the deal may end there and then.

All the above is information readily available to the developer, and as early and detailed, that this can be provided the quicker the transaction can be approved.

Perry Kurash, Head of New Business, BLG Development Finance 

BLG Are Now Offering The Recovery Loan Scheme

BLG Are Now Offering The Recovery Loan Scheme

by | Nov 11, 2021 | Latest News

From 1st July 2024, the Recovery Loan Scheme has been extended and rebranded to the Growth Guarantee Scheme. Learn More about the Growth Guarantee Scheme.

What Is RLS

The Recovery Loan Scheme (RLS) was launched by the government on the 6th of April, to help support businesses to recover and grow following the pandemic. The loans range from £25,000 to £10 million and are open to all businesses with a turnover of less than £45 million. This money could be used to manage cash flow, investment, or growth for the business. However, the actual amount offered depends on the terms and conditions of the participating lender.

If your business was supported via the previous COVID-19 guaranteed loan schemes, or who have taken out a CBILS, CLBILS, or BBLS facility, you are still eligible to access RLS loans as long as you meet the below criteria:

  • Trading in the UK
  • Be viable were it not for the pandemic
  • Have been adversely impacted by the pandemic
  • Not be in collective insolvency proceedings

Businesses of any size and from any sector can apply except the below:

  • Banks, building societies, insurers, and reinsurers (but not insurance brokers)
  • Public sector bodies
  • State-funded primary and secondary schools

How We Can Help You

BLG are one of the listed accredited lenders. As a principal lender specialising in property development finance across the UK, we can help you grow via the recovery loan scheme 2021. Our dedicated team of more than 300 years combined management experience can help you through this process.

We are specialists in property development finance, both residential and commercial. Offering finance ranging from £1 million to £15 million, with competitive terms over 12 to 24 months. Our team of financial experts have the skills and drive to lend and support both small to medium regional developers, unlike high street lenders. Priding ourselves on flexible terms and fast decision making to enable you to move fast and develop your company.

At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022. However, from the 1st of January 2022, there are further changes including a reduction in loan money and business size so contact us today to take full advantage.

Playing Whack-a-Mole With Development Cost Increases

Playing Whack-a-Mole With Development Cost Increases

by | Nov 4, 2021 | Latest News

There has been a leitmotiv recently about costs increasing in the construction industry.  We have seen evidence of this with our borrowers, but regional variations for some materials and labour force availability make it difficult at this stage to discern a simple or obvious narrative or even an overall clear percentage increase.  Some costs seem to be linked to short-term supply chain issues that get resolved over a reasonably short period of time whereas others are linked to more fundamental global shortcomings which will take a while to wash through.  The only pattern at this point is that costs are increasing!

Slightly less visible or discussed increases in other costs such as insurances and warranties.  We have seen these increase at significant levels which is catching some developers unaware and leaving them scrambling to look for cheaper alternatives or cashflow to meet them as they arise.

Where we see our borrowers doing best at controlling costs is those that anticipate and plan well ahead.  The ability to secure supply and lock in costs or shopping around for the best price seems to be really helping.  This requires time and access to cash flow – an area where we can sometimes help with the right preparation and information.

Right now, the residential development market is slightly protected by house prices that keep nudging upwards and continued demand for new housing stock.  The risk of interest rate rises may dampen this slightly and it remains the case that looking at every aspect of the cost stack will help to protect margins.

Get those night-vision goggles on and plan ahead!

 

Cecile Verroest, Risk Director, BLG Development Finance

BLG Wear Yellow For World Mental Health Day

BLG Wear Yellow For World Mental Health Day

by | Oct 12, 2021 | Latest News

World Mental Health Day began 10th October 1992 and ever since has been on this day to promote mental health issues, educate the public and to raise awareness globally. It began as an annual activity of the World Federation for Mental Health organisation which consisted of more than 150 countries.

October 10th is an international day that provides an opportunity for everyone to discuss mental health both personally and within the workplace. Additionally, provides a platform for change and to discuss what needs to be done to make mental health care a reality worldwide.

In recognition of the World Mental Health Day on 10th Oct, BLG encouraged all employees to wear something yellow, even if working from home, to show our support. This followed a presentation to all employees on Mental Health and details of our Employee Assistance Programme (EAP) – our key message was to encourage everyone to use this free and confidential service should they need it.

Young Minds #HelloYellow
Stuart Parfitt in yellow running shirt

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