In our new, Covid-secure world, the way we do business has changed, but we haven’t. Getting to know our clients and building strong and hopefully long-lasting relationships is still part of our DNA, it’s just a little bit tougher on a Teams call. So, we’re taking the opportunity to introduce, or in some cases, reintroduce, our Commercial Lending team to you.
In part one of our ‘Introducing…’ series, we talk to relationship manager, Jill Woodward, to find out what motivates her and how she can help you.
Jill is a relationship manager for the Commercial Lending department and, in late 2020, she joined our specialist Portfolio Buy-to-Let team. Here, Jill explains what led her into financial services and how she can help you:
How did you start out in finance?
I started out in branch banking with Bank of Scotland. After completing my Chartered Banker qualification, I worked for the Credit Sanctioning department in Glasgow Chief Office, which provided a great grounding in a variety of lending situations. I dealt with all sorts, from salmon farming to fishing, quite different to what I’m doing today! After a spell there, I moved to Newcastle-upon-Tyne, where I joined the Mergers and Acquisitions team. I came to Wales in 2002 and became a member of the Real Estate team at HBOS, which is where I really became interested in property development and investment.
How did you start your career in Hodge?
I joined Hodge in August 2019 after nearly seven years in a similar role at the Principality Building Society. I felt ready for a new challenge, and Hodge’s growth plans provided the perfect platform to utilise my skills and experience.
What does a normal day at Hodge look like for you?
We’re a small team of six very different, but like-minded individuals, with a unique balance of skills and experience. We work in a very collegiate way, where peer review is an integral part of how we operate; everyone is keen to contribute and support one another. Honesty and transparency are key, and there are very few subjects, if any, that are off limits!
As a relationship manager, I really enjoy the fact no two days look the same, it’s great getting to know new clients and building lasting relationships with existing ones. In the Buy-to-Let team, I largely focus on three key areas:
- Managing the team and workflow on a day-to-day basis
- Transaction management and deal execution – making sure that once we have agreed to make a facility available, all the processes are completed, and the loan is drawn
- Business development and broker liaison – we deal with quite literally hundreds of brokers and it’s my role to ensure they’re all kept up to speed with what we can offer their clients.
What’s your advice for anyone hoping to embark on a career in banking today?
The world of banking and finance is now much more disparate, with challenger banks and numerous fintech platforms creating wider opportunities. The days of starting your career in branch banking are pretty much consigned to history, so focus on what interests you.
Be prepared to be flexible, both in terms of role and geographic location; be selective in the challenges and opportunities you accept – you don’t have to say yes to everything!
Finally, don’t rush your career – take time to learn your subject in-depth, and enjoy the journey. After all, you’ll potentially be working for a greater number of years than any previous generation, so don’t be in a hurry to “peak” too early in life. Accept that sometimes a sideways move is the right thing to do to keep a sense of proportion between career and personal life. Be discerning – building a network of people on LinkedIn is relatively easy, but it’s important to focus on who can offer real support and sound advice that’ll benefit you in your chosen career.
Finally, what’s your top tip for working from home?
Be disciplined but retain flexibility – shape your day to suit the business needs of colleagues and clients, making sure you carve out appropriate “me” time; take a proper lunch break, and enjoy the freedom that this opportunity gives us all, be it a morning run, lunchtime swim, or afternoon walk.
We’ve refreshed our Portfolio Buy to Let (PBTL) proposition, with the relaunch of our standard PBTL product and a new Specialised Residential Investment proposition. This builds on our recent innovation in the PBTL space over the past 18 months, aligning the proposition with Hodge’s established track record of success in more complex investment property finance.
The Specialised Residential Investment product is aimed at landlords with larger portfolios or those with specialised assets, such as houses of multiple occupancy (HMOs) or multi-unit freehold blocks (MUFBs).
This new proposition will allow us to support to landlords with debt requirements ranging from £500,000 to £10million.
Our flexible PBTL and Specialised Residential Investment products provide landlords with one loan, secured by multiple properties. This means landlords can add properties to the loan as their portfolio grows, or potentially recycle equity within their portfolio as assets are traded. Both products are available to Ltd company, LLP, or individual borrowers.
Our standard PBTL product is for landlords with debt requirements of up to £5million or fifteen properties, with rates from 3.55%.
We’ve designed our new Specialised Residential Investment product for landlords with larger portfolios or those with specialised assets, like HMOs, MUBs, or development refinance, with a maximum loan size of £10million. There’s no cap on the number of properties owned and rates for this product start from 3.75%.
Mike Clifford, Head of Buy To Let at Hodge, said: “We’ve been very successful with our flexible PBTL product, but felt that to better serve landlords across the spectrum we needed a specialist product that can adequately cater for those with complex needs. Particularly those larger landlords who have a portfolio that require specialist underwriting capabilities.
“Hodge’s offering is about flexibility and finding solutions that work for our customers and brokers, that’s why we underwrite and manage all our or loans on a portfolio, rather than individual asset basis.”
Mike added: “We realise that not all property portfolios are the same and work with brokers and landlords to help them achieve their strategic aims with these loans. We believe by introducing products such as this, we can better support investors, allowing them to focus on managing their portfolios.”
In a recent deal with long-term funding client Farleigh Rengen, Hodge will fund the redevelopment of Norfolk House – a former office block located on the fringe of Bristol’s city centre. To be branded NOHO – playing on the original Norfolk house name – the small development facility, worth £1.18m, will be transformed into nine modern, New York style apartments.
Projected to complete in January 2021, this redevelopment project is the latest in a surge of substantial redevelopment in the area – which has meant significant increase in demand for residential properties.
Hodge has a long-standing relationship with developer Farleigh Rengen, and has funded several developments of similar size in the past, for the development of both residential and student housing. Deals of this size form a key part in Hodge’s lending approach, as the bank shifts its focus to support residential developments.
Speaking about the deal, Iestyn Lewis, Group CEO, said:
‘We’re delighted to have closed development finance for our NOHO scheme in the centre of Bristol, through our long term funding partner Hodge bank. This is another excellent scheme for Farleigh Rengen and brings some New York styling to central Bristol through our in-house interior design platform Iesis Creative. We’ll be launching sales in Q1 2021. This is our second funding deal with Hodge in as many weeks!’
Rhos Evans, Hodge’s Credit Support Manager, added:
‘This is a historic relationship between funder and borrower, and we’re delighted to continue to support Farleigh Rengen as a proven, experienced developer with a stellar reputation. It’s an exciting area to be developing in Bristol, with lots of redevelopment over the past few years, and this latest repurpose of an existing office block is testament to this, providing much needed housing.’
If you’re interested in a development project and are looking funding, find out more about Hodge’s development finance funding.
At Hodge, we’ve created our Portfolio Buy-to-Let Loan for professional landlords, with four properties or more, who are looking to manage their portfolio under one loan. We know that property portfolios come in lots of shapes and sizes, and that’s why we’ve tailored our criteria – so that we can work flexibly, depending on what landlords are working with.
From multi-unit freehold block acquisitions to refinancing a multi property portfolio, we can support a wide range of portfolio buy-to-let ambitions. For a flavour of our work, take a look at a selection of recent tombstones below.
“It’s really refreshing to see banks like Hodge continuing to lend in difficult times, while others sit back and wait. This type of unwavering support is exactly how long-term relationships are formed, and I’m confident that that’s where we’re heading.”Hodge £3m residential investment portfolio client
Supporting established local developer, Hodge has funded the development of two detached houses close to the famous Cheltenham race course.
In a recent deal, Hodge has supported Cape Homes – a renowned local developer – to develop two luxury family homes, a stone’s throw away from the famous Cheltenham race course.
Working with Capital Law, Knight Frank, and MDA Consulting on the project, Hodge has provided £1.2m funding to support the build of the two detached houses in this sought-after residential location just outside of Cheltenham town centre.
With construction expected to complete in autumn in 2021, the houses will be on the market and ready to buy. Cape Homes has designed the properties with families in mind.
Speaking about the deal, Greg Pescott, Senior Development Finance Manager, said,
‘It’s fantastic to work with SME property developers across the UK to support high quality developments like these two luxury homes. At Hodge, we take real pride in working with experienced, local developers like Cape Homes. This is a great project to be a part of – and we wish Cape Homes all the best with the development, and are looking forward to seeing the end result.’
If you’re interested in finding out more about how Hodge could support your development ambitions, take a look at our development finance section.
Hodge’s busy Commercial Lending team has revamped its residential investment, Portfolio BTL and development team structure to make sure it can meet the demands of its clients and introducers going into 2021 and beyond. Kevin Beevers, Managing Director for Commercial Lending at Hodge, explains the team’s focus.
2020 has been an unprecedented and uncertain year for all of our clients, introducers, and partners, across all markets. As a lender, we’ve been impressed by the resilience of our clients, and the robust attitude this year’s challenges have been met with by the property sector as a whole. As a business, we’ve also taken the opportunity to review our strategy and structure to make sure we’re best placed to support our existing clients, and well positioned to develop the right type of business that will support our ambitious five-year growth strategy.
At Hodge, our aim has always been to become a long-term lending partner for experienced developers and ambitious investors. We’ve always sought to develop strong relationships with our clients and professional partners by developing bespoke lending solutions to help support their ambitions.
To help us maintain that approach, we’re changing our structure to allow us to focus our resource on supporting our commercial investment customers and growing our lending in residential investment, development, and Portfolio Buy-to-Let lending. This will allow us to utilise the exceptional expertise and experience we’re lucky enough to have within our team at Hodge, and make sure we’re offering a top-class service to support our clients – no matter the external climate.
Refinancing options for residential Build-to-Rent developers
A key benefit of our new structure is that it opens up an opportunity for ambitious build-to-rent developers who’d like to retain their properties once development is complete. Clients may start with a development loan, before refinancing onto a longer-term residential investment finance option with Hodge – having the dual benefit of saving costs, and maintaining a strong relationship with a trusted lending partner.
Gareth Davies is our Head of Development Finance, supported by Senior Development Finance Managers Greg Pescott and Paul Williams. Going forward, the team will focus on working with experienced residential developers, with a proven track record, looking for bespoke lending solutions. Lending up to £5m, our development loans will help support a range of residential projects – including new builds, conversions, and refurbishments.
Residential Investment & Portfolio Buy-to-Let
Following the successful launch of our Portfolio Buy-to-Let product in 2019, which has appealed to residential investors seeking a flexible approach to managing their portfolio, we’re adding additional resource to the team. We’re also amending our product structure to appeal to investors seeking loans of between £500k and £10m. Andy Button, Head of Investment Finance, will lead the team focused on the execution of new lending, with Jill Woodward also joining as Relationship Manager. Michael Clifford, Head of Buy to Let lending, will provide strategic focus in developing our proposition, product offering, and key third-party relationships – making sure we’re well placed to proactively support residential investors of all sizes. Three other colleagues – Lloyd King, Rachel Preston, and Sophie Bennett – will now also support the team.
While last year presented its challenges, we’re delighted – at Hodge, and as a Commercial Lending team – to introduce this new structure to the market, and are very much looking forward to continuing to work with some excellent new and existing clients, brokers, and professional partners in the near future.
January is traditionally a time for reflection and looking ahead. But with the world still living though a global pandemic, making predictions about the commercial lending market in 2021 is a tricky proposition.
From demands for greater outdoor space and bigger working spaces among residential buyers to decreased house prices, rises in stamp duty, and scarcity of housing stock, we asked our commercial lending team for their views on how Covid-19 has affected the housing market and what to look out for in 2021.
Head of Development Finance, Gareth Davies, says 2020 started with a clear plan for commercial lenders following the 2019 General Election and the prospect of Brexit – but then Covid-19 hit.
He says: “We entered 2020 with high hopes. Following the General Election and Brexit vote, we knew the direction of travel. It gave the market and developers confidence and we suspected activity would be strong throughout the year. Unfortunately, Covid-19 then took over and it played a major role in house building and sales activity during 2020 and will undoubtedly do so further into 2021.
“During the first lockdown, many construction sites were closed and activity slowed down significantly. However, as the industry adapted to the new social distancing measures, many sites quickly returned to activity which meant a continuation to improve the balance between supply and demand of the housing market in Wales.
“Homes delivered during the first half of 2020 materially reduced compared to 2019, although this picked up in the latter part of the year as construction activity was allowed to continue. However, new build starts have been significantly slower to rebound, although this is not altogether surprising, given the uncertainties that face us all in 2021 and beyond.”
Sales activity in April, May and June 2020 was minimal due to the lockdown and restrictions on people’s movements, which all but closed the housing market. However, there was a considerable bounce-back through the summer and autumn months as restrictions eased.
Gareth says it’s difficult to predict if the current level of house buying activity and price increases in Wales over recent months will continue into 2021, but many development opportunities have been brought forward and a steady flow of opportunities are proving a positive pipeline for 2021.
It’s also clear that there has been a surge in demand for homes with bigger gardens and office space for working from home.
“This is clearly a reaction to Covid-19 and a change in mindset of residential property buyers across the UK. It’s difficult to know if this shift will continue, and gives rise to questions as to whether we’re likely to see greater movement away from large, more densely populated cities – but we’re already starting to see developers formulating and reworking development sites to best suit the needs of the end user with this in mind,” he added.
Head of Buy To Let, Michael Clifford agrees that the first Covid-19 lockdown had an impact on transitional activity in March, April, May and June. But, he says the double stimulus of pent–up demand built during the lockdown period and Stamp Duty Land Tax holiday brought with it a sharp increase in transactional activity through July, August and September – which boosted house prices and investor, as well as occupier, demand for assets.
“There are signs that this surge in demand has abated somewhat in the past few months, particularly in the rental market, where we’re starting to see some correction to the rental price increases seen over the summer. Also, as we approach the end of the stamp duty land tax holiday period, we expect housing market transactional activity to slow. While we expect some volatility in the housing and rental market (mirroring the economy in general) in early 2021, the level of this volatility will be dictated by the speed of the economic recovery and the severity of any downturn that may occur as furlough is removed and economic impacts (like unemployment) crystalise.”
Michael says it will be interesting to see what shape renter and buyer demand takes as people’s working and social habits adapt to a post pandemic world. Will home working, less frequent travel into city centres, or sharing apartments still be attractive?
“Looking beyond the end of the pandemic and its impacts, the high–level fundamentals of the housing and rental markets remain. People will need somewhere to live and the supply of houses and flats will still be outstripped by demand for them. This supply/demand equilibrium can only be balanced by the development of more quality housing stock. As Gareth notes, with lower levels of new developments starting, residential assets are likely to remain an attractive asset class for professional investors, as well as individuals looking for a secure long term income stream to bolster their pension pots.”
He has also spotted the trend in Buy to Let investors and occupiers searching for ‘essential’ features that have previously been seen as’ nice-to-have’ rather than ‘must-have’ – including home office spaces, outdoor areas, and access to countryside over traditional city centre amenities.
Managing Director of Commercial Lending, Kevin Beevers agrees it’s very likely that the design of future residential development schemes may be influenced by consumer requirements for better/more home working areas.
“I think this is likely to occur over time, but the nature of the design, planning, and construction periods for housing mean we’re unlikely to see much actual evidence of this being delivered in practice for some time yet. Regarding current renters though, I think it’s evident that those seeking to move would attach a greater premium to outside space, study facilities etc than would perhaps have been the case pre-Covid-19.
“Similarly, we have anecdotal evidence of some slackening of tenant demand in inner cities etc, as people feel less of a need to live in immediate proximity to their workplace if they don’t need to spend so much time there physically.”
He too has noticed an upturn since September, with a strong volume of enquiries, particularly within Development Finance: “This has been a stronger flow than we might’ve expected, given that Development Finance, by its very nature, involves the creation of new assets that don’t as yet exist – and thus would be easier to delay or avoid starting in uncertain times. However, the number and quality of small–scale developers who are keen and confident enough to commit their own equity, livelihood, and reputations to new projects this year has exceeded our expectations. It indicates to me that the development community is confident enough to look through the current Covid-19 crisis, and believe they’ll be selling their finished housing product into a more stable market in 18mths/2yrs, as the projects which are now at inception reach completion.”
So, despite a buoyant market during 2020, Head of Investment Finance Andy Button admits there may be some pretty tough headwinds to be faced in 2021, including the possibility of house prices decreasing.
He says: “It’s possible that the continued flexible working practices post-vaccine could also affect the market. It’s been said that the housing market buoyancy in 2020 was attributable to a relatively small group of more well-off households, who already own their homes with modest debt commitments, but driving the market with the savings that they have accumulated this year from working from home.
“But house prices could be vulnerable in 2021, when the trend towards working from home may reverse as the “office” begins to re-open, stamp duty will be higher, and mortgage rates possibly holding at current levels and similar to pre-Covid-19 levels because of a weakened labour market. So, from a residential investment perspective, scarcity of housing stock, high deposit requirements and subdued wages is going to see renting remain a necessity for a lot of young UK residents who have been hit particularly hard by the pandemic. Houses will still need to be built, and there will still be landlords with equity to purchase.”
In a recent deal with Morgan Developments Wales (MDW), Hodge has funded the development of 15 three- and four-bedroom houses and bungalows in the village of Llanon, Ceredigion. To be branded under the Morgan Homes banner and expected to take just over a year to build, the new homes, which overlook the countryside and sea, will form the first phase of part of a larger development of 34 houses in the area.
Situated between Aberystwyth and Aberaeron, the homes will be built just north of Llanon village – providing excellent links to larger towns, schools, and employment opportunities. In an affordable area, the properties will be ideal for both retirees and downsizers, as well as locals and incomers looking to move to a traditional village in West Wales.
Speaking about the deal, Gareth Davies, Head of Development Finance, said, ‘We’ve worked with MDW and Morgan Construction previously, and it’s a pleasure to be able to support them with this new venture. Working with experienced, savvy developers like MDW is key to our growth plans at Hodge, and we look forward to watching this development progress into a valuable and attractive residential proposition in a beautiful coastal spot.’
Huw Smith, joint owner of MDW, said, ‘We have an excellent working relationship with Hodge and it’s great to be back working with them again. This is an exciting development project for us, which uses sustainable materials and complements the wider residential area. We look forward to continuing to partner with Hodge and develop our funding relationship as we expand our development programme.’
For more information on our development finance projects, take a look, here.
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