We Don’t Buy Markets, We Buy Deals

by | Jul 8, 2020

So the housing market was hit badly by the pandemic. It largely ground to a complete halt. It’s now back with a vengeance, but as with so many things at the moment, the future is unclear.


A recent report from CBRE highlighted that the availability of development finance has contracted sharply since Covid; this comes as little surprise, as larger, mainstream lenders withdrew from the market in order to concentrate on managing existing (and potentially compromised) loan books.


Add to that the uncertainty of exit dates and valuations; of materiality clauses being added to contracts; greater scrutiny of banks’ capital adequacy; unforeseen issues with development delays or contractor insolvencies…It’s little wonder that development finance began looking like an increasingly scarce commodity for those still actually looking for it.


Fast forward a couple of months and the lending environment is undoubtedly better…but it’s still a long way from where it was. Complex arrangements in the borrowing stack and time-consuming negotiations with multiple lenders to cover the gaps left by the inelasticity of traditional lenders remain. Indeed, logic dictates that such factors are only going to become worse in the post-Covid world.


This brings to the fore the role of specialist finance providers – the rising importance of whom was also acknowledged in the CBRE report. Specialist lenders, primarily in the form of debt funds, have recorded a 4 percent increase in loan origination over the last 12 months, bringing their total to £7.9bn.


Hilltop’s founding mission was to make access to development funding easier for SME operators, allowing them to focus on what they do best – building properties and focusing on growing their businesses. Our industry experience taught us that SME developers need to be assessed on an individual basis – going the extra mile compared to larger lenders to ensure a high number of reliable, profitable projects get to see the light of day that would have fallen through the cracks of any tick-box appraisal. 


Our one-stop funding solution also helps developers looking for assistance on the equity side by putting them in contact with qualified private equity investors looking for thoroughly researched investment opportunities – further support for SME developers during one of the most turbulent economic climates we are likely to see in our lifetime.


Like private equity, we buy deals and we back teams, have aligned interests and focus on successful project completions. Because we have plenty of skin in the game, and because each SME development project is unique, our analysis and our funding has to be the most robust in the market.


The UK’s housing shortage means there will always be a demand for housing which, in turn, means there will always be funding available for decent schemes. But now, more than ever, the specialist lender is becoming an increasingly important part of the process.

0 Comments

Interesting article? Put our experience to work…

Does the saviour of Retail lie in housing?

Since lockdown and the acceptance that there really is a post-Covid new norm, there’s been a lot of speculation about what might happen to...

Hilltop Credit Partners completes £2m loan for residential development in Latton, Wiltshire

Funds advised by Hilltop Credit Partners have completed a £2m loan to Pars Developments to fund a private residential development in the...

History repeating itself?

There was a round of fresh political housing crisis rhetoric this week, as Boris talked about relaxing lending criteria and re-introducing...

The new normal – out is in

As I write this the country appears to be in mass confusion over Coronavirus – curfews, local lockdowns, the rule of 6, work, don’t work,...

Million pound homes outperform as wealth corridors become most attractive

Sales activity in the £1m+ property market is storming ahead according to the latest Rightmove data, as wealthier buyers race for more...

As seen in...

Fintech Finance logo
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Real Estate Capital
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Real Estate Capital
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Bridging Loan Directory
Logo - Property Week
Logo - IPE Real Assets
Logo - Business Daily News

Register your interest here

 

Let’s talk! Get in touch on +44 (0) 203 903 6369 
or leave us a message below and we’ll get right back to you.

4 + 9 =

  • Share This

    Updated April 2020 - UK Residential Real Estate Market Review 2020
    Essential data for property developers and investors alike

    Download here