DEMAND FOR SHORT-TERM FINANCE IN THE NORTH WEST IS STILL GOING STRONG
12.10.22
Demand for short-term finance in the North West of England is still strong, and lenders like Tuscan Capital maintain an appetite to support developers in this region.
As we approach the winter, the property market and wider economy are in a very different state compared to 12 months ago. With rising inflation and high energy prices driving the cost of living crisis, many people are feeling the pinch.
It doesn’t help that the economy is under stress, as a result of what many see as fiscal own-goals scored by the new occupants of 10 and 11 Downing Street.
That said, all is not doom and gloom. As a regional director at Tuscan Capital, I can report that demand for short-term finance in the North West of England is still strong, and lenders like Tuscan maintain an appetite to support developers in these regions.
We have seen increased interest in the North West from landlords and investors for some years now; compressed yields in London and the South East have made those areas harder to turn a sizeable profit in. The North West, by contrast, shows clear opportunities for capital appreciation, as well as a strong yield on debt.
There has also been an ongoing migration of businesses to the regions where costs are lower — such as Manchester, which also has a growing fintech start-up market, and is a large regional finance and business service hub outside of the capital.
There are a number of major schemes in the North West which are set to deliver new jobs and low carbon homes. For example, Greater Manchester leaders approved plans for the Atom Valley Mayoral Development Zone (MDZ) this summer. It spans the North East Growth Location and will connect town centres in Bury, Rochdale, Oldham, Middleton, Heywood, Radcliffe and Prestwich.
The plan is for Atom Valley to deliver around 20,000 high-quality jobs, 1.6 million square metres of employment floorspace, and 7,000 low carbon homes, supporting the goals outlined in the Places for Everyone long-term joint plan for all new developments to be net-zero by 2028.
Infrastructure will also receive a boost. Transport for Greater Manchester (TfGM) has placed a multi-million-pound order for 50 new double-deck electric buses as part of the Bee Network. Meanwhile, Atom Valley will be linked to improved sustainable transport links, including options for delivering Metrolink to the centre of Middleton.
There are fundamental reasons for developers to feel optimistic about the region, as there is an over-supply of empty commercial space and a chronic under-supply of good residential homes. Permitted development rights have helped, but the levelling up agenda and possible regeneration bill will create even more opportunities.
While there are some challenges specific to the region, the main challenges at present are ones the whole country is facing. With costs of materials, energy and labour rising significantly, profit projections are being hit. It goes without says that the cost of living crisis is having a real impact on the liquidity of borrowers.
A positive for investors and developers is that there are still several lenders who have an appetite to lend in the North West.
Bridging and development finance are available for the right projects; at Tuscan, we recognise that the fundamentals in the North West are strong, so long as brokers ensure that their clients can demonstrate a strong business case for the project, coupled with a viable exit strategy.
Get in touch to find out more by calling on 07759 648713 or emailing cgraham@tuscancapital.co.uk
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