In the past 12 months, Manchester has seen house price growth of 4.5%, while London experienced an increase of only 0.2%, writes Joanne Parr of Close Brothers Bridging Finance.
London has traditionally been at the epicentre of UK property, with buyers and developers from across the globe vying for a slice of the action. However, house price growth in the capital has slowed in recent years as demand cools due to the uncertain political climate, while the North West and other regions look increasingly promising. Estate agents Savills expects that property prices in the North West will rise faster than every other region in the UK.
Increased investment in the Northern Powerhouse, and a trend of professionals leaving London to find more affordable living in the North has driven demand and has not only caused residential property to enjoy an uplift but commercial property too. EY research singles out Manchester as the best performing city in the UK outside of London for attracting foreign direct investment projects. And with more investment in Manchester, new and more established developers are reaping the rewards.
It’s definitely an exciting time to be in the property sector in Manchester which is why we recently opened a base in the city. We moved into our new office in St Peter’s Square in August and our focus is now to provide bridging finance and refurbishment finance for small to medium development projects.
We’ve already seen incredible demand for finance from developers in the region, particularly for purchases at auction which we’re well equipped to help with. Whilst we may be a new business, between us the team has over 50 years’ experience in bridging and development finance.
Bridging finance can be integral for developers wanting to make the most of the opportunities that a thriving city like Manchester can offer. Indeed, for those wanting to snap up deals at auctions, fast access to capital is vital. Typically, on the day of an auction the bidder will need to put down a deposit for the desired property, and there will be a set period to pay the rest. Getting a mortgage during this period will, more often than not, prove difficult, and so bridging finance can prove a great solution until the buyer is able to find longer term finance.
In a recently completed deal, a borrower in Brighouse secured a purchase for a commercial property (below) under an auction contract with a 10% deposit. They approached Close Brothers Bridging Finance with an instruction to proceed 10 days prior to completion date. We completed the loan at 63% of the loan-to-value ratio, with interest serviced at a rate of 0.85% per month, no commitment or exit fee, within 10 days of this instruction.
With so much demand in Manchester and the wider North West, there is a great opportunity for developers and buyers to capitalise on. Whether they need to refurbish a property, want to start a new project or buy at auction, bridging finance can help them do so.
Uncertainty is still in the air and it can be all too easy to be doom and gloom about the UK property market. However, Manchester’s resilience shows there are still pockets of opportunity out there, and we’re looking forward to seeing what this property hotspot has to offer.
- Joanne Parr is director of Close Brothers Bridging Finance, based in Manchester