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June 1, 2020

Scotland’s residential development land market shows resilience

Savills latest Quarter One figures reveal that the Covid-19 lockdown is impacting Scotland’s development sector after a positive start to 2020, pausing housebuilding and slowing the new build sales market, despite pent up demand. However the strategic development land market has been less immediately effected as it is based on longer time horizons, according to real estate adviser Savills.

Whilst many sites are now reopening south of the border, Scotland’s minister for local government, housing and planning, Kevin Stewart said: “We share the ambition of businesses to get back to work as soon as possible, but this must be done with public health and safety as the first priority.” He is chairing a series of meetings of the Restart Group, at which the housebuilding sector is represented, in order to “develop plans to get back to work safely as soon as the medical evidence suggests it is appropriate to do so.”

According to head of development in Scotland Ben Brough, the Scottish market is typified by pent up demand. He said: “Renewed confidence following the certainty provided by the majority secured in December’s general election, marked a turning point for Scotland’s land market. However, whilst this boosted market activity, it did not translate into significant increases in land values due to the continued increase in build costs and limited house price growth.”

UK greenfield land values grew a marginal 0.3% in the three months to mid-March, ahead of lockdown, to bring annual growth to 1.7%, data from the Savills residential development land index show. Urban land values slipped -0.3% in the quarter, and ticked up just 0.4% over 12 month period.

Brough continued: “Despite the lockdown, some land deals, which were already in train, are continuing and once Covid-19 restrictions have lifted, we would expect a busy second half of 2020.

“Whilst the number of consented sites sold has slowed in the short-term, activity in the strategic land market, based on longer time horizons, is continuing as more parties seek out future opportunities, underpinned by healthy fundamentals of supply and demand in Scotland’s housing market. Cash rich developers and investors are actively seeking land. Whilst some are looking for distressed land sales these are not prevalent in the market, and values are being upheld.”

Savills development team in Scotland acted on a combined £80 million of land deals across the country during the first quarter of 2020, including the sale of 482 plots and agreements on a further 1,300 units in various locations.

Edinburgh

Ben Brough continued: “The Edinburgh market has continued to lead the way in the development market and seen the expansion and regeneration of suburbs, particularly around the south and the south east of the city. We expect to see strong activity in the West Edinburgh in the coming months with CALA and David Wilson Homes having commenced ground works for the 655 new homes at Cammo Fields, following a deal we agreed last year. We have also placed the initial phase of West Craigs under offer for over 400 new homes and welcome the successful planning outcome for Murray Estates with 1,350 units as Phase 1 of Edinburgh’s Garden District now with a Minded to Grant planning permission.

“While Covid-19 will have an impact on the timing of the delivery of these new homes, Edinburgh has had a fundamental undersupply of housing and this delivery will help to support the future demand.”

Aberdeen

Head of development for Savills Aberdeen, Graham Reid said: “A number of national housebuilders looking to enter the Aberdeen market, coupled with an increase in demand from active players looking to increase their outlets, was feeding a growing optimism in the city land market at the start of the year. While the current pandemic has resulted in a pause, the expectation is that housebuilders will continue to take a longer term view on the city’s recovery. Aberdeen has shown resilience to micro and macro-economic challenges in the recent past and is proactively diversifying the economy and attracting new investment.”

Glasgow

Head of development for Savills in Glasgow, Jamie Doran said: “Glasgow’s residential development market has been on an upward trajectory with demand for sites outstripping supply, resulting in multiple offers at closing dates. Prime locations have seen greatest activity with recent site in the West End and South Side particularly sought, with a range of bidders including residential, retirement and care home developers offering above expectation. Pent-up demand is continuing through lockdown and we are currently marketing another site suitable for apartments at Charlotte St just off Glasgow’s Merchant City which has generated good interest prior to a closing date being set. In general terms there is strong demand for sites across the Glasgow market.”

June 1, 2020

Landbay introduces LTVs to 75% and recommences physical valuations

Landbay, one of the UK’s leading buy-to-let lenders, today launches a new product range, with loan to values up to 75% LTV. Landbay, which is institutionally funded, has continued to lend on buy-to-let properties throughout the lockdown.

Rates on the new range start from 3.39% and it will also lend both on large and small houses in multiple occupation (HMOs) of up 12 units, multi-unit freehold blocks (MUFBs) and new build properties.

It also continues to offer its hugely popular, lifetime tracker rate with no early redemption charges.

Landbay resumed its physical valuations last week and these are now available on all new buy-to-let applications; it is also working through its pipeline of loans from applications received throughout the lockdown.

All new applications benefit from Landbay’s instant Decision in Principle (DiP), launched at the end of March. This highly-streamlined application process, uses intuitive technology and takes only two minutes from start to finish. Landbay’s whole application process is completely paperless from start to finish and is now completed in just nine simple steps.

In summary, from today Landbay will offer:

  • Up to 75% LTV
  • Rates from 3.39%
  • Lifetime tracker no ERC
  • HMO’s up to 12 beds
  • MUFB’s up to 12 units
  • New build range
  • Instant 2 minute DiP

Landbay’s aim is always to combine cutting edge technology with the human touch. Brokers have direct access to its highly experienced team of underwriters and BDMs who know the mortgage market inside out and who understand the importance of moving quickly to get a case over the line.

Paul Brett, managing director of Intermediaries at Landbay, said, “It is good to be able to support our loyal brokers and increase our range of mortgages, particularly with a 75% LTV product which we have received a huge amount of demand for.

“It has been our aim throughout this challenging period to be a supportive force for brokers and to be a steady presence in the market. And, due to our diversity of funding we have fortunately been able to continue lending throughout the whole of the last two months. This range will now help to give something more to our brokers and their clients, who are keen to remortgage or keep investing in the buy-to-let market.”

May 29, 2020

British Business Bank accredits Metro Bank to the BBLS

Today the British Business Bank has announced that it has approved a new lender for accreditation to the Bounce Back Loan Scheme for small business across the UK. The scheme is intended to target small and micro businesses in all sectors, with loans from £2k up to 25% of the business’ turnover with a maximum loan of £50k.

Metro Bank will join the other 17 lenders accredited to the Bounce Back Loan Scheme (BBLS) in providing financial support to smaller businesses across the UK that are losing revenue and seeing their cashflow disrupted, as a result of the Covid-19 outbreak.

Metro Bank intends to start lending under the scheme as soon as possible and will keep customers updated on when they are ready to receive applications from smaller businesses across the UK.

Keith Morgan, CEO, British Business Bank, said: “The Bounce Back Loan Scheme has already helped over 608,000 businesses access loans worth £18.4bn. As our onboarding continues at pace, accrediting Metro as a new lender will mean that more smaller businesses across the UK will be able to access the finance they need to get through the current pandemic.”

The Bounce Back Loan Scheme has previously accredited 17 lenders. These are AIB, Bank of Ireland UK, Bank of Scotland, Barclays, Clydesdale Bank & Yorkshire Bank, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander, Skipton Business Finance, Starling Bank, The Co-operative Bank, Tide, TSB, RBS and Ulster Bank.

May 29, 2020

Enterprise Investment Scheme data points to continued investor appetite

Data released (29 May 2020) by government covering the level of private investment during 2018/19 under the tax advantaged Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) indicates that private investors continue to play their part in supporting early stage growth businesses.

There had been concern that the changes to the Scheme rules, to exclude asset backed businesses from eligibility under the scheme, would have seen many investors looking elsewhere for tax efficient investments.
But according to the Enterprise Investment Scheme Association (EISA) this has not been the case.

Director general of the EISA, Mark Brownridge commented, “2018/2019 is the first full year that captures the risk to capital changes made at the Patient Capital Review that removed asset backed EIS investment to ensure EIS was focused on entrepreneurial seeking to grow and develop. Given that the asset backed section of the EIS market traditionally raised in the region of £300-£400m it is perhaps surprising, and at the same time very pleasing, to see such a small fall in the total investment into EIS. My own estimates were of a far deeper cutback. It was suggested at the time the risk to capital condition was introduced that those investors who were purely tax motivated and had been weaned on asset backed deals would leave the EIS market and invest their money elsewhere but the figures suggest these fears have largely been misplaced.”
A key statistic that stands out is the relatively sharp fall in companies raising funds through EIS for the first time.

“The long-term average,’ Mark Brownridge points out, “is 53% but in 2018/2019 this fell to 28%. Again, as HMRC outline, it would seem that this is as a consequence of the risk to capital condition. Old style asset backed and capital preservation EIS investments were often predicated on setting up new companies to hothouse the investment so the risk to capital condition seems to have been successful in flushing these out.”
On the positive side the number of Advance Assurance requests has increased in 2019/2020 reflecting the increased interest in EIS and SEIS funding by companies.

“All in all, the statistics show how resilient EIS and SEIS are, having navigated a period of upheaval and legislative change. Given the scope and far reaching changes that were introduced by the risk to capital condition in 2018, the statistics show that the EIS and SEIS market has remained not only stable but positively buoyant. New challenges are of course now being presented, in the form of the coronavirus pandemic, but no doubt EIS and SEIS will rise to this challenge too and EISA continue to lobby hard to ensure EIS and SEIS can play a significant part in supporting small, innovative companies towards recovery and growth.” says Mark Brownridge.

May 29, 2020

CLBIL helps services firm supporting UK’s critical infrastructure

A company vital in keeping the UK’s lights on has secured one of the earliest Coronavirus Large Business Interruption Loan Scheme (CLBILS) packages. CLBILS is one of the government measures introduced to support businesses impacted by the Covid-19 pandemic.

Rainham Industrial Services, which specialises in the installation, maintenance and decommissioning of large industrial sites including power plants, saw project work grind to a halt after the onset of lockdown restrictions in March – which is usually the start of its peak season. The business expects to see increased demand for its services post lockdown.

Rainham works with clients within the nuclear, energy from waste and power generation sectors.

Facing cashflow issues as a result of reduced income, the business turned to longstanding banking partner, Lloyds Bank, for financial support. The money will be invested to increase operational capacity once infrastructure projects begin to restart. It means the business can complete six months’ worth of projects in less than four months, after projects scheduled for April and May have had to be pushed back due to the lockdown. The majority are projects which regulation states must happen this season.

Chris Banfield, management accountant at Rainham Industrial Services, said: “A lot of our big projects are carried out in the spring and summertime when our clients, particularly those in power generation, can take major plant offline for maintenance. This work is often essential for regulatory compliance, meaning almost all projects we’re booked for must be completed this season.

“Having worked alongside Lloyds Bank for eight years, they quickly understood the issue we faced in ramping up operations after a period of reduced income. With the new finance in place, we’re in a strong position to work alongside our suppliers and subcontractors to support customers with their critical maintenance requirements during this squeezed season.”

Mathew Durrant, relationship manager at Lloyds Bank, said: “Behind the scenes, Rainham is playing a critical role in keeping the nation running by helping to maintain key infrastructure. It’s demonstrated a remarkable commitment to its customers during the crisis, with its doors open to support essential work. It’s a great example of one of the many businesses we’re helping to get the financial buffer they need for the months ahead.”

Lloyds Banking Group has so far approved 21 CLBILS applications, to the value of over £157m.

May 29, 2020

Popular family-run restaurant hotels receive CBILS boost

A group of popular Derbyshire restaurant hotels has secured a six-figure Coronavirus Business Interruption Loan Scheme (CBILS) loan from Lloyds Bank to help secure its future as it keeps its doors shut during the Covid-19 pandemic.

The Boar’s Head in Draycott-in-the-Clay, The Lion Hotel in Belper and The Littleover Lodge Hotel in Littleover are owned and run by John Crooks, his wife Gail and their five children.

John bought The Boar’s Head back in 1984, a historic building originally part of the Vernon estate, which he transformed into a 23-bedroom hotel with an a la carte restaurant to seat 80.

The family business now employs 140 people across its three sites, which also attract thousands of people every year through its wedding and conferencing facilities.

The trio of restaurant hotels would usually be fully booked through the spring. But due to the Covid-19 pandemic, the business has had to temporarily close its doors to customers and furlough its staff.

The family sought the help of Lloyds Bank, its banking partner since 2011, to secure a CBILS loan to support the business’s employees and to help support its cashflow during the lockdown period.

John Crooks, director of the family business, JC Hotels, said: “This is the most challenging time our business has faced but we know we’re not alone. Pubs, restaurants and hotels across the region are feeling the same effects that we are and planning for the future is particularly difficult given the uncertainty surrounding when we’ll be able to open our doors again.

“We must remain optimistic and we’re doing everything we can to ensure that we’re ready to provide our customers with the quality and experience they have come to expect from us, when the time comes. Lloyds Bank has done a great job in helping us make sure we have the financial support we need to be in a position to welcome our customers back.”

Adam Hartshorne, relationship manager at Lloyds Bank, said: “John and his family have built a fantastic business over the last 36 years. The three restaurant hotels are each a part of the back-bone of their respective local scenes, providing wonderful food and accommodation for holidaymakers and businesses alike.

“The hospitality trade has been hit hard by the pandemic and we recognise that businesses like this are in urgent need of financial support. We’re committed to helping firms tackle the impact of COVID-19 and want to support businesses in preparing for what the future holds.”

May 29, 2020

Lenders confirm support for commercial landlords

The banking and finance industry is today confirming its continued support for commercial landlord customers as part of its ongoing commitment to help business customers through these difficult times.

With the June/July rent quarter soon approaching, lenders recognise that commercial landlords and their tenants may have concerns about their ability to make their payments.

Banks and finance providers are committed to supporting viable businesses and are engaging with their landlord customers ahead of the next quarter day. The flexible support available includes providing capital payment holidays and amending current facilities.

Stephen Jones, chief executive of UK Finance, said:

“Commercial finance providers are working hard to support business customers through these difficult times and lenders recognise that the current situation poses particular challenges for commercial landlords and their tenants.

“A wide range of flexible support is available, including amendments to facilities and capital payment holidays to help landlords and their tenants manage through the disruption.

“As part of the support being provided ahead of the June quarter day all the main commercial lenders are proactively contacting their major commercial landlord borrowers to identify concerns they have and provide support where appropriate.”

Those commercial landlords who are concerned about making loan repayments or require financial assistance during this time and who have not yet been in contact with their lenders should do so through the usual channels.

Banks and finance providers will treat customers sympathetically and will consider their circumstances on a case-by-case basis.

Today’s announcement is part of the industry support for businesses impacted by Covid-19, which includes making available new and extending existing finance, restructuring facilities, providing capital payment holidays and covenant waivers.

Figures published this week show that £27.5bn of lending has been provided to over 650,000 businesses through the three government-backed loan schemes so far with an additional £20.5bn extended via the CCFF commercial paper programme at the Bank of England facilitated by commercial paper programme arrangers across the banking sector.

May 29, 2020

Pluto Finance launches new term loans for residential investment

Pluto Finance has launched a new lending product for professional landlords in the UK’s private rental sector.

With loan sizes from £5m to £50m, Pluto Finance will provide loans of up to 65% LTV for fixed terms of 10 years or longer at a margin of c. 2.5%.

Simon Chapman, lending director at Pluto Finance, comments: “We are delighted to be able to announce the launch of our residential investment term lending programme. We are looking to fund professional landlords with unbroken blocks of flats in major towns and cities throughout England and Wales.”

“Combined with our market leading rates for residential development funding, we can now provide full-cycle development and investment finance for PRS landlords on very attractive terms.”

Pluto Finance is looking to make over £200m of residential investment term loans by March 2021.

This new lending programme compliments Pluto Finance’s existing core products. The specialist property lender focuses on stretch senior, senior and bridging loans, with backing from top-tier global financial institutional investors.

Pluto Finance has been actively lending since 2011 and is currently funding the development of around 2,000 new homes.

May 29, 2020

Banking Competition Remedies Ltd (BCR) publishes progress report

The Board of Banking Competition Remedies Ltd (BCR) today publishes the fourth update from Pool A recipients, third update from Pool B and D recipients and second update from Pool C recipients, providing a summary of performance against their public commitments to the period 31st March 2020.

The updates of those awarded, their original commitments made and key achievements to date can be found here. All Pool awardees will submit their next progress reports in July 2020.

Pool A fourth quarter update

  • Metro Bank plc public commitment update
  • Starling Bank Limited public commitment progress update
  • ClearBank Ltd public commitment progress update

Pool B third quarter update

  • Investec Bank plc public commitment progress update
  • The Co-operative Bank plc public commitment progress update
  • Note that BCR accepted a revised Business Case from Nationwide in which it returned, with interest, the full £50m Pool B grant awarded in April 2020 and therefore Nationwide is no longer required to report. Their archived public commitments can be viewed on the website.

Pool C second quarter update

  • Atom Bank plc public commitment progress update
  • The Currency Cloud Group Ltd public commitment progress update
  • Iwoca Ltd public commitment progress update
  • Modulr Finance Limited public commitment progress update

Pool D third quarter update

  • Codat Limited public commitment progress update
  • Fluidly Limited public commitment progress update
  • Form3 Ltd public commitment progress update
  • Funding Options Limited public commitment progress update
  • Swoop Finance Limited public commitment progress updat

Aidene Walsh, CIF lead director said: “Despite the challenging circumstances, awardees are continuing to make a real difference for SMEs with many adapting quickly to the current environment to assist SMEs in areas such as lending. Whilst there are challenges ahead, the focus remains on the overall aim to increase competition in the UK business banking market”.

May 29, 2020

Nucleus Commercial Finance delivers £50,000 facility to Energy Angels

Nucleus Commercial Finance has provided a £50,000 facility to Energy Angels, enabling the business to continue operating at full capacity during the crisis and provide energy services to social and private landlords.

Based in Wolverhampton, Energy Angels is a leading energy intermediary, helping households and businesses switch providers during void periods and supporting in negotiations with providers for free periods of energy to those in need. The business works closely with local authorities and housing associations to provide energy to the vulnerable and rehomed NHS key workers.

The £50,000 cashflow finance facility from Nucleus Commercial Finance is structured over five years and will be used to clear past loans and remove debentures. It will allow the firm access to a larger cash pot to avoid the furlough of employees and continue their work throughout the pandemic.

Lewis Taylor, founder & managing director, Energy Angels said: “Working with Nucleus Commercial Finance allows us to continue providing our services to those that need it most during these difficult times. The combination of Nucleus’ tech infrastructure, supportive team and the accessibility of information via the online portal led to a quick and accurate approval process, ensuring we got the funding we needed in a timely manner.”

Mark Swindell, business development manager, Nucleus Commercial Finance, said: “We are pleased to support Energy Angels in delivering on its mission to help those in need during the global pandemic. This finance facility benefits from the new five year term on our cash flow offering, which we implemented in response to an increase in demand from small businesses for cash flow finance.

“SMEs in this region of the country are being hit particularly hard by the economic effects of the coronavirus and so it is imperative they can access the finance needed to avoid collapse. This deal shows that we are committed to supporting small businesses in the Midlands now more than ever as it continues to play a key role in the UK economy.”

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