LendInvest said it expects demand for complex lending projects to pick up this year, as the Brexit outcome and Covid vaccine roll-out boost confidence in the market.
The online property lender also said that continued need for new housing, the low interest rate environment and permitted development changes, making commercial to residential conversions easier, should help boost demand for finance.
Tom Madden, sales director of LendInvest’s structured property finance team, which was launched in July to provide tailored solutions to complex, large bridging and development finance deals, said that last year property investors often delayed making large commitments in the uncertain market.
“Although that uncertainty continues into 2021 in some respects, we do have a much brighter outlook in the not too distant future,” Madden said in a blog on LendInvest’s website.
“Clearly the Brexit outcome has helped as has the roll-out of the Covid vaccination programme but there are still potentially choppy times ahead with the end of the stamp duty holiday and the wider economic backdrop and unemployment forecasts.
“That said our small- and medium-sized enterprise developer and property investor clients seem very positive, with housing shortages, stretched new home targets to counter this and low interest rate environment thought to contribute to a busy year for them.
“Planning reforms, including permitted development, will continue to fuel interest in land and commercial with residential opportunity.
“We do also expect a continued strong appetite for development exit funding with obvious delays in finishing projects since the first lockdowns.”
Madden said that lenders should always be looking to adapt to grow their offer to their customers, especially in 2021’s environment, for example via new funding lines to provide more flexibility or improving processes.
In a separate blog, Sophie Mitchell-Charman, sales director at LendInvest, said that she expects the purchase market to slow following the end of the stamp duty holiday in March.
Meanwhile, she said the lower end of the market may remain strong as people can pick up these properties cheaper, and also predicted the rental market to grow.
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“A slow-down in purchasing may cause a drop in house prices, combined with an end to furlough potentially creating more redundancies, and depending on the level of financial stimulus we may begin seeing more effects of the Covid-recession,” Mitchell-Charman said.
“Considering all of these things, the rental market would be expected to grow and therefore it will be important for buy-to-let landlords to have the opportunity to grow through appetite statements and refinancing for purchasing power, while also having good options for refinancing on their existing properties.”