Midnight would strike on 31st December and, ‘Boom!’, we’d be back to what we all know and love. But I was sadly mistaken, and what actually happened is another national lockdown, schools were closed again, and I’m left going slowly mad inside the four walls of my home in South Leicestershire — this time without the glorious sunshine that allows me sit in the back garden and not feel so claustrophobic.
- Miz Herrera, BDM at Salboy, discusses the experience of being both a developer and lender
- Avamore provides £3.8m loan for Camden development scheme
- Avamore grows team of relationship managers
But although we aren’t physically any better off than we were last April, something is different this time: our mindset and preparation. These unprecedented times are no longer just that. We have adapted and learnt, and life has gone on. With every obstruction comes an opportunity. From a residential perspective, we have seen a diversification of requirements with more people considering whether they still want to live in a small inner city flat to be close to premises they no longer visit; of course, we can also assume that the need for a home office is now being factored in when moving, and so the question is: are the needs of the buyer changing long term and does that create new opportunities for developers? The demand for outdoor space has increased, and the desire for suburban living has grown. With this in mind, how do brokers and developers need to adjust their approach to ensure that their businesses thrive among the competition?
Let’s look at development finance as an example. Commercial mortgages are less readily available as there is a risk that they will remain unoccupied. But the demand for housing and to live in central locations instead of just work in them may continue, subject to the preference of the customer. City centre living will always be desirable, particularly for those at the beginning of their career, or who love the buzz of a 24-hour lifestyle. Rather than walk away from that office block that’s available at a great price, we might see an increasing number of developers taking on commercial-to-residential projects which previously were out of reach.
From a broker perspective, there could be opportunity in those who you arranged a deal for over the last 18 months coming to the end of their facilities. Why not revisit them and find out whether their needs have changed? I look at countless deals for customers who have a project going on but haven’t been able to secure the materials needed to complete it on time for the existing facility. Not only have they been halted by the pandemic, but Brexit has made it more difficult to get materials into the UK, so many of these clients need extra time and money to complete the builds. Avamore Capital do a fantastic part-complete product (otherwise known as Finish & Exit) that pairs perfectly with this scenario.
Additionally, there is an abundance of properties on the market that fall below the minimum requirement for an EPC certificate that allows them to be let out, but, with some TLC, could be the makings of a profitable rental portfolio. There are skilled people out there who may have a renewed appetite to start completing their own projects and growing their suite of properties. Online viewing platforms and estate agencies have developed, so the need to physically visit a property has reduced.
One thing that has always been consistent in our industry is how adaptable it is, and we can choose to use this to our advantage and remain forward thinking. As Winston Churchill once said, ‘Continuous effort - not strength or intelligence - is the key to unlocking our potential’. Nothing worth having ever came easily, after all.