We’re delighted to announce that Hodge has become the latest lender to plug into Brickflow – the UK’s first search engine for development finance.
Brickflow connects borrowers with 28 lenders in seconds, and by joining the digital platform, our development finance team will be easily accessible to experienced property developers and prospective borrowers.
Brickflow was set up to address widely-reported funding access issues, making it simple for developers to partner with lenders who share their ambition and vision.
Developers make their funding applications online and in real-time, filling out just one digital form for multiple lenders, and the platform returns comparable lending estimates within two minutes, providing much-need market visibility.
“Working in partnership and providing a great customer experience is crucial to the way we do things, which makes Brickflow an excellent fit,” says Greg Pescott, Senior Development Finance Manager at Hodge.
“We know it can be difficult for borrowers to find development finance that works for them – even experienced developers find it a challenge – so we’re thrilled to be part of Brickflow, a platform that’s truly committed to making it as easy and simple as possible.”
Tim Noble, Lending Director at Brickflow comments: “We’re delighted Hodge has joined us. This gives borrowers even more choice when it comes to accessing and securing development finance loans, enabling us to save them time, resources, and money.”
We offer development finance loans of up to £5m to experienced property developers with a proven track record of success, and takes a relationship based-approach – working to understand developer’s ambitions to help them succeed over the long term.
Brickflow is the UK’s first search engine for development finance loans, providing instant, 24/7 online access to the development finance market. Brickflow searches the market in real-time, providing property developers with the best loans from trusted lenders in seconds. Brickflow empowers developers to borrow smarter, mobilise quicker and get ahead of the game.
As yet more material shortages affecting the construction industry hit the news this week, Gareth Davies, our Head of Development Finance, shares his thoughts on how developers – big and small – have been tackling the problem
Before the pandemic was even on the horizon, as Brexit loomed and started to take effect, the wider construction industry was conscious of the sheer volume of materials we import – and the impact potential delays and shortages might have on ongoing projects and developments.
So, when Covid hit and the UK went into the first lockdown, it wasn’t long before we started to see real shortages of materials throughout the supply chain. While many active construction sites were relatively quick to reopen, there was little clarity across Europe, and further afield, in respect of a road map to properly reopening supply markets. This left us in a fairly uncertain place in the development world. Projects were forced to pause, lenders tightened up their criteria, and developers became more cautious about starting new projects.
But, as we’ve worked through Covid, construction sites in the UK have increased in activity and have widely remained open throughout the second and third major lockdowns, resulting in increased activity across the residential development market. It undoubtedly remains a challenging market but we’re seeing more and more enquiries for development finance, with developers and investors cautiously optimistic about returning to building.
Outside of the development space, we’ve heard lots about the ‘accidental savers’ of lockdown, people who’ve found themselves with surplus cash as a result of international and domestic travel, hospitality and entertainment being closed. Clearly, lots of those have now started to invest in their own homes – having spent so much time there over the past 18 months – and are thinking about putting in a new bathroom or kitchen, repurposing accommodation, extending, or even just redecorating. This is exacerbated further by the explosion in house prices in some areas – where people may feel that it’s better to invest in their existing property, than to enter the process of buying a new home which can both be stressful, and, at the moment, requires the ability to move at lightening speed.
Demand for materials is high, not just in the UK but globally and the pressure on supply chains continues to have an impact on delivery. For both large scale building projects and developments, and small scale residential improvements that require just one or two contractors (or a brave attempt at DIY), being able to access the right materials is critical – and that’s where it requires some careful thinking, and ultimately, some tricky manoeuvring to plan ahead.
From conversations with our developer clients at Hodge, it’s clear that they’ve been monitoring the availability – and price! – of various materials for some time now, and adjusting plans accordingly. Lead times have frequently been extended, and, as simple economics would dictate when demand exceeds supply, prices rise. Just this week, the Construction Leadership Council has warned that cement, some electrical components, timber, steel, and paints are all in short supply.
Planning for the future has never been more important in development finance. It’s far more difficult now to make a last minute call to a supplier at short notice, as products that previously would’ve been available the next day, might now not even be available the next week, or even month.
For developers, big and small, to continue building successfully and to keep control of costs, managing the build programme, human resource, and supply chain is crucial – and building in space for future delays into project timelines and potential cost increases is sensible practice for the foreseeable future.
In a latest deal, Hodge will work with Vertex Investment Group to fund the conversion, extension, and redevelopment of a former public house, The Red Lion in Staple Hill, Bristol.
Hodge has agreed to fund Vertex Investment Group’s latest development venture – the conversion, extension, and redevelopment of a former public house in Bristol, The Red Lion.
Located in the well-regarded residential area of Staple Hill, 10 minutes from Bristol city centre, the development will breathe new life into The Red Lion – creating a mixture of one, two, and four-bed flats, as well as significantly upgrading and expanding the commercial space. The locally listed building will remain and be converted, and a new build element will adjoin the existing property.
Vertex plan to retain the commercial space of the original pub once converted, turning it into a food-led café / pub establishment. Located to the east of Staple Hill’s primary high street opposite Page Park, the flats will be close to local amenities, and have both car parking and outdoor space.
Speaking about the deal, Greg Pescott, Senior Development Finance Manager at Hodge, said, ‘I’ve worked with Matt and the team at Vertex on a previous development, and it’s great to be able to support them again with this latest venture. It’s an exciting development in a popular residential area, which is brilliant to be a part of.’
Matt Slade, Managing Director of Vertex, said, ‘We’re extremely pleased to have the support of Hodge on our latest development project. They’re a great lender to work with, and have been very flexible, adapting their offering successfully to the bespoke nature of this mixed-use development and our build to retain model – we hope to continue working together in future.’
Find out more about our Development Finance work and how our team could help you.
Hodge has completed a development finance facility with Griffon Homes to fund the conversion of a former care home into nine spacious apartments in central Bristol
Working with developer Griffon Homes, Hodge has completed a deal for £1.1m, funding the conversion of a former care home into nine apartments in central Bristol – all with outdoor space and car parking.
Just 10 minutes from Bristol city centre by car, the development – located in Fishponds, a popular residential area – will consist of a mix of one, two and four bedroom flats, close to local amenities, schools, and public spaces, and priced affordably, suitable for first-time buyers and young professionals or families.
Griffon Homes is a new client for Hodge, a partnership made up of a collaboration between two experienced, well-known developers based in Bristol, Jon Morgan and Steve Storey.
Speaking about the deal, Senior Development Finance Manager Greg Pescott, said, ‘This is an exciting development in a popular residential area of Bristol, breathing new life into an old building and giving it a brand new purpose. Griffon Homes is a new client for Hodge, and we’re delighted to support them with their latest venture”.
Jon Morgan, of Griffon Homes, said, ‘This development finance funding from Hodge will allow us to develop nine, much-needed apartments in Fishponds, and we look forward to the project progressing with Hodge Bank.’
To find out more about Hodge Development Finance, click here.
Working with Beckingham Homes (Alton) Limited, Hodge has funded the development of five new build properties, on a site previously taken up by a disused furniture warehouse, in Hindhead, a popular commuter village in Surrey.
The development, which consists of two one bedroom flats, two two-bedroom semi-detached houses, and one two-bedroom bungalow, is in a well-connected location, within walking distance of local amenities, a short drive from both Hindhead and Grayshott, and just 50 minutes from London Waterloo by train.
Hodge is providing just under £1m in funding to Beckingham Homes, an experienced developer with extensive experience of development projects similar to this.
Speaking about the deal, Greg Pescott, Senior Development Finance Manager, said, ‘It’s great to work with Beckingham Homes on this latest deal. I’ve built a strong and trusted relationship with them over the years, and they’re an excellent partner for a project like this. The development itself is set to be a fantastic asset to a local community where housing demand is high. I look forward to watching it progress.’
Andrew Macleod, Director of Beckingham Homes, said, ‘We’re delighted to have Hodge fund our latest development project. We’ve worked with Greg in the past, and have always found his approach to be pragmatic and commercially-minded, while being as flexible as possible. We hope to work with Hodge again in future.’
For more information about how Hodge can support your Development Finance ambitions, take a look here.
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.
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.
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.