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Welcome to the Commercial Lending June blog 

27th June 2023

We’re midway through 2023, which means two things: alfresco dining is a British weekly standard and it’s time for the Commercial Lending June blog.

This month the Hodge Commercial Lending team exhibited at the NACFB Commercial Finance Expo at the NEC Birmingham.

Gareth Davies, Greg Pescott, David Hales, Stuart Benge and Andy Buss (meet the team below) had a fantastic day meeting new contacts and catching up with familiar faces. In this month’s blog, they talk us through some of their highlights from the day and what they see as key takeaways within the commercial lending sector.

Why do you think attending the NACFB Expo is such a highlight in the commercial lending calendar?

Gareth: The NACFB Expo is a great way to meet new connections as well as build on existing relationships. It puts the best commercial lenders together in one room, helping to raise Hodge’s profile and that of the industry as a whole.

David: With more than 140 exhibitors, it’s always a busy day and you’re reminded of how many lenders, besides high street banks, there are, and the different offerings.

Greg: This makes it interesting for attendees and exhibitors alike to see the other lenders in the market and get some good market intel.

Stuart: It’s also a great opportunity to understand where the competition lies and to discuss the key challenges facing brokers – it's also a great chance to grab some branded merch, you can never have too many notebooks can you!

What were some of the recurring themes in conversation at the Expo?

Greg: There were lots of questions from new faces about who Hodge is, what we offer and interest in our product life cycle for Development Finance, especially stretch senior and land acquisition.  Hodge is so synonymous with retail mortgages and later life lending, it’s always great to remind the market about our long-established Commercial Lending offering too.

Gareth: Yes, that’s why the Expo works so well for many Lenders. There’re more than 2,500 attendees so it’s a brilliant opportunity to educate people on what Hodge offers, build on our strong relationships in the industry and help to keep us front of mind.

Andy: Commercial investment is a challenging environment at present, particularly in terms of pricing, both for lenders and borrowers. So, it was really useful to have those conversations to cut through some of the confusion they are feeling.

Gareth: Exactly, while there are challenges for everyone. Brokers and lenders alike, it was a really positive day, and we all had some constructive conversations about finding ways to make deals work.

What are the current challenges in the property investment and development markets?

Greg: Pricing is a major challenge in the marketplace at the moment. Rates are moving all the time and while development pricing has increased over the past few months, we’re on par with our key competitors so continue to offer excellent service at a competitive price.

Stuart: The key challenge at the moment is instability.  Volatility in the current market means brokers are looking for a surety of delivery and that pricing is honoured.  The fact hodge is funded by depositors and doesn’t borrow in the wholesale debt market or have other forms of external debt funding lines is extremely helpful in the current climate.

David: Being a bank means we have the funds available to complete a deal which other lenders may not have. It also means we can be quicker to get the credit decision made and the funds to the client. It was a positive message to be able let brokers know we now lend up to £10m on Development Finance too.

Gareth:  Despite these very real and present challenges which developers, investors and consequently brokers, are facing, there remains an active market. Borrowers still need finance so it’s about how to best find one that works for the client.

What are your key takeouts from the day?

Andy: The Expo gives attendees the chance to both educate and listen. Explain what Hodge can offer as well as gain insight into the wider commercial lending landscape.

Stuart: There is undoubtedly instability in the market as products come off shelves and brokers look to rehouse deals. The Expo allowed us to have many frank and open conversations to help unmuddy the water.

Gareth: The headwinds that we saw at the start of the year still remain for developers and investors, which include a multitude of macro factors outside of our control. But this also means we’re all facing the same challenges. The Expo is a really well-structured day that lends itself to informative and honest conversations about the market, the financial solutions we offer and our broadening product suite. As a team, we’re already looking forward to 2024’s Expo, and we hope to see you there.

If you’d like to speak to us, please get in touch with the commercial lending team. For property development enquiries please email [email protected] and for investment enquires email [email protected].

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