Tales from Northern Ireland
The other day, I was looking at some of our old marketing products and it struck me how much our industry has changed in a very short space of time.
As recently as last year we were issuing marketing literature focussing on being “quick, transparent and simple”. Nowadays, that just sounds meaningless (perhaps it always did!) Most lenders is our industry are quick, transparent and simple. It’s now the standard and certainly not worth shouting about.
However, as the short-term lending sector has become even more crowded, at Ortus we’ve never had any problems marking ourselves out. Our appetite for commercial assets including pubs, hotels and restaurants invariably arouses the interest of brokers, especially our willingness to look at start-ups and early stage operators.
That said, nothing has earned us more compliments about being “genuinely different” than our willingness to lend in Northern Ireland. We’ve also earned ourselves a few “you must be mad” comments … but on the whole the market reaction has been positive.
Our decision to expand our offering to Northern Ireland was not made lightly and we’ve spent countless hours researching the sector and getting ourselves comfortable. However, this is only right. The process of lending in a new jurisdiction should be difficult and complex if it’s done properly.
Firstly, there are key differences between the English and Northern Irish legal systems which need to be understood, quality professionals need to be brought on board and the best introducers need to be identified.
Secondly, Northern Ireland has markets within markets. For example, areas of Belfast can be right next to each other yet quite different in terms of liquidity. It’s a market which needs to be understood to be appreciated.
However, on a recent trip to Belfast we sense a really positive feel to the city and recent press reports and Government statistics back this up.
The Office of National Statistics (ONS) has reported that property prices in Northern Ireland increased by 8.8% in the year to April 2015, compared with 5.8% in England, 2.2% in Scotland and 1.3% in Wales.
The Belfast Telegraph recently reported how house-hunters had “queued throughout the day to snap up luxury homes in scenes which were a throwback to the height of the property boom.” They were referring to a development in Belvoir Park in south Belfast … the first 27 houses were sold quickly after their release.
Yet it’s important to view these statistics and reports in context. The ONS reports that house values in Northern Ireland remain 45.1% below their peak level eight years ago during the property boom, with the average property now worth £147,000 (compared with £284,000 in England, £169,000 in Wales and £191,000 in Scotland)
The Belfast Telegraph has also reported the views of various agents in Belfast. Paddy Turley of Ulster Property Sales confirms that his sales are up by 20% and “anything that’s priced correctly is moving within four to six weeks.” Indeed, this notion of correct pricing being a key driver is supported by Richard McCullough from Stanley Best Estate Agents who believes the increased activity in the market is partly because “vendors have become more realistic about lowering asking prices until they achieve a sale.”
Whatever their motivations, keen buyers and realistic sellers create a buoyant market and this perhaps explains the buzz around Belfast at the moment.
Taking everything into account, we’re very glad we made the effort to expand our offering into Northern Ireland. It’s definitely been a challenge. We’ve had to work with the broker community to get the right message to clients about what can and cannot be delivered. We’ve had to get to know a new team of advisors and ensure our core values such as speed and transparency are maintained. And borrowers have needed explanations regarding the role bridging can play in their affairs.
However, it’s satisfying to know that we’ve given brokers a solution for their clients where previously there may have been no option at all.