CapitalRise chief executive Uma Rajah said that the Covid-19 crisis has proved the resilience of the London and South East prime residential property market and predicted that the worst of the pandemic’s effects are over for this sector.
Speaking on a podcast with Estates Gazette, Rajah (pictured) said the prime property lender has seen an increased demand for lending during Covid, with loan applications increasing from around £3.5bn in 2019 to £5.6bn in 2020.
“Historically it (prime property) is the most resilient part of the UK property market, compared to the London or UK market overall,” Rajah said.
“After each downturn that has been recorded it bounces back incredibly fast and faster than other parts of the market and the pandemic has just proved its resilience again.
“I think Covid has created quite a lot of desires for people to want to change where they’re living and move especially as we’ve all been locked in our houses for an unprecedented amount of time.
“Whether they are looking for more indoor space (for an office or gym), more outdoor space, to move further out , looking for something more central as a pied de tierre , there is a lot dynamism in the prime London and prime Home Counties market we’ve been trying to serve as a lender.”
Rajah said that CapitalRise was well placed to deal with the pandemic, thanks to a prudent lending strategy and buffers in place that it will continue with.
“In many ways we’ve been through the worst of it and we were funding many development sites throughout the pandemic,” Rajah said.
“When the pandemic first hit it was a very stressful time, it was very difficult for developers to figure out what to do, there were initially issues with the supply chains, they had to quickly implement social distancing and other safety measures on site and it was a very stressful adjustment. But they very quickly adapted and those projects have now completed very successfully.
“We have adapted as well. Luckily we built significant contingencies into the loans in the first place which enabled us to have buffers in place and we’ll continue doing that going forward.
“Moving forward we anticipate developers will be more conservative when estimating the time it will take to complete their projects and what it will cost and as a lender we will continue to put good buffers in place to protect everyone.
“Within the prime property industry, I feel we’ve lived through the worst of the pandemic and have a very sound foundation to continue and there’s a huge amount of appetite for development which we’re there to fund and plenty of developers who are keen to serve the demand for prime housing stock so I think it’ll be a very positive time for the sector and particularly due to where we are in the prime property market recovery cycle as well.”