From a financial perspective, a winter of genuine discontent is, at this point, largely inevitable. The UK economy is reeling from a period of unprecedented stress, and the chaos caused by two prime ministerial transitions within the space of a few short weeks is likely to be felt for many months to come.
While all this is going on, investors, property developers, and the general public alike are turning their backs on the capital. London is becoming increasingly unaffordable for those looking to live and work there and a less appealing prospect for investors and developers in search of viable (i.e., cost-effective and profitable) projects.
But while things may be looking a little grim in some areas down south, the picture is significantly brighter north of the divide. At least in some select areas of the North West, where demand for short-term funding solutions among property developers and investors is booming.
“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,” said Carl Graham, Regional Director at Tuscan Capital.
“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.”
Ambitious Projects, Affordable Funding
For example, one of the more ambitious projects planned for Greater Manchester – the Atom Valley Mayoral Development Zone (MDZ) – is earmarked to create 20,000 high-quality jobs, 7,000 energy-efficient homes, and a full 1.6 million square meters of employment floor space.
Property developers and investors are voicing confidence and optimism in the North West of England due in large to the lingering under-supply of available residential units and under-supply of empty commercial space. Permitted development rights are making it quicker and easier for developers to convert existing properties into residential units, sidestepping the complications of obtaining full planning permission for new builds.
“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 labor rising significantly, profit projections are being hit. It goes without saying that the cost of living crisis is having a real impact on the liquidity of borrowers,” added Mr. Graham.
“A positive for investors and developers is that there are still many lenders who have an appetite to lend in the North West.”
Specialist Short-Term Finance
For developers looking to make the most of the opportunities the North West has to offer, the UK’s specialist lending sector has become a key point of focus. From bridging loans to specialist development finance to secured commercial loans, there is a huge range of flexible and affordable funding solutions available beyond the High Street.
Particularly where short-term funding needs to be accessed as quickly as possible, specialist facilities like these are more in tune with the needs of today’s discerning developer. All of this is fuelling demand for short-term funding in the North West, as the development and bridging finance sectors continue to go from strength to strength Nationwide.
