A Busy Half Year at UTB

By Noel Meredith – Executive Director, United Trust Bank

We’ve had a very busy first half of 2013 with the number of development finance proposals received at United Trust Bank hitting new highs. The combination of a greater volume of proposals and larger facilities agreed meant that by the end of June we had already committed more money in the first half of 2013 than we had throughout the whole of 2012.

The increased activity also confirmed that we needed to expand the team and in March we welcomed Gordon Robinson to United Trust Bank as a new Property Development Director. We also wanted to be absolutely certain that with all of the extra work moving through the department that we could maintain the high service standards we deliver to developers and brokers. So with no sign of activity slowing down we have recruited two experienced people to support the business.

There’s no doubt in my mind that that sentiment in the residential market has started to improve. It’s now around five years since the start of the ‘credit crunch’ and I believe that many people have had their plans to move on ice for several years because of the economic uncertainty. Now though, despite the economy still causing us some concern, they have adjusted to economic conditions and are getting on with their lives. Many will have outgrown their current homes because they’ve had children and others may have put off moving to a new job because of worries about the housing market. These buyers are on the move once again and the combination of a shortage of housing stock and increasing demand is starting to lift confidence.  This is being seen in increased transaction data. The one section of the market that has proved difficult is the first time buyer and those existing owners with limited equity.  The Government’s interventions are helping this sector to move by reducing deposits from 20% of purchase price to 5%.

For developers to keep building they’ll need a reliable source of funding and as yet there’s little sign of the High Street banks wanting to get back into development finance to any great degree. The development finance lending landscape has changed substantially since the days when developers would merely have to show their bank manager the details of a piece of land they’d acquired before he’d add some zeros to their overdraft limit Some  lenders such as Dunbar, Singer & Freidlander and Heritable have left the sector for good and with the likes of HSBC, Lloyds, RBS and Barclays demonstrating a severely limited appetite the door has been left open for specialist banks like UTB and other lenders to fill at least some of the void. Recently we have seen new non- bank lenders enter the development space offering Developers an increasing choice. Brokers have an important role to play in helping developers to understand what is available and which lender offers the best fit for their circumstances.

At United Trust Bank the future looks extremely bright. We have a very strong appetite to lend and have increased our funding capacity to allow us to lend on more developments and for even larger facilities. Most days, at least one of the team will be out on the road meeting brokers and developers, looking at new sites and catching up with projects in progress. We’re travelling all over the country at the moment. If there’s a quality development and a good demand for the end product, whether it’s in Chester, Chichester or Chingford, we’ll consider it.