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Category: Property Finance News

Irish property development financing

Time Is Ripe For Irish Property Development Financing

There is so much going on in the Irish property world that it is quite difficult to know where to start. Barely two months into the year and the Irish property journals, blogs, and newspapers are all brimming with a positive outlook.

Irish property development financing is now a viable short and medium-term investment. That doesn’t mean that there are no problems in paradise, but overall, Irish property is doing well.

All the activity, growth projections and the Government announcements relating to infrastructure investment indicate that Ireland is the place to be at least for the next decade.


Faith in the Future

When the government puts forward its plans to make a substantial dent in the housing shortage, things begin to change. This is exactly what has happened in Ireland.

Towards the end of 2017, the Bank of Ireland announced that it would be providing €1bn for property development in the Republic. This kind of approach fuels the optimism in the market countrywide.

This is more than four times more than the €250 million that was made available in 2014. Definitely signifying a substantial shift in development confidence.

After the tracker mortgage debacle, the Bank of Ireland has continued to identify accounts that will enjoy redress. This means that 14,500 customers have now been identified as having been impacted by the problem since 2010.

And an additional 6,000 customers having been identified for redress. This shows that there is good faith in the property industry and the banks are working hard at said redress.

The bank has now adopted a policy where proper home building strategies will be encouraged and financed, rather than the land hoarding of the past which may have contributed to stagnation in the property development industry.

Property development financing has already included the financing of over 3,500 housing units and 1,500 student beds. They have clearly positioned themselves to grow this area of their portfolio.


Government Investment in Infrastructure

The Irish government has allocated a €116bn investment into future infrastructure including housing, health, and environment. This has been planned over the next two decades.

Private industry is therefore taking the cue for a surge in the market. With the knowledge that new infrastructure will be built by the government, private business is now prepared to get on the bandwagon.


Dublin – Roads Paved with Gold

Recent figures indicate that Dublin commercial rents are now as much as six times higher than they are elsewhere in the country. They are also rising and expected to reach an increase of between 5% and 6% during 2018. Prime industrial rents are expected to rise by as much as 7% across the capital.

During 2017, there was a record uptake of commercial property leasing, especially offices, indicating an increased demand. The domino effect that can be expected from this is a kneejerk reaction coming from industry to prevent a shortage and any related crisis this may precipitate.

The jury is still out on whether office space will continue to be scooped out or whether vacancies will increase. Property professionals don’t agree on the details. Quality office accommodation is expected to increase in demand even if overall occupation decreases.


What This Means For Irish Property Development Financing

The ongoing growth in the Irish property market has been fuelled by government investment. This is an indicator that development opportunities will abound over the next few years. It can be expected to continue almost certainly for the next decade.

Catapulted by the government’s commitment to invest, Irish property development financing is likely to become a catalyst for the privately funded market.

Access to investing in the Irish property development market does not need to be difficult. Sometimes, when gaining access as a UK investor, hurdles can be experienced. It doesn’t really have to be once the property development financing has been arranged.

This is usually sourced and managed by an experienced, resourceful, and reputable broker or financial advisor. Belgravia Property Finance has an excellent network of both investors and financiers who offer private finding. Whether you are looking for a mezzanine loan, Irish property development financing, or Irish bridging loans, Belgravia are the people to speak to.

Property development loans in Dublin

Market Growth – Property Development Loans in Dublin

The devastation that the 2008 crash brought upon the Irish property development market is no secret. In fact, there were conversations about whether it would ever recover.

Of course, there are half glass full and glass half empty people. The dire impact on the Irish economy did, to some extent, feed the pessimism of the glass half empty folk. The availability of property development loans in Dublin are now emerging as new growth is stimulated in the recovery.

Irish Recovery from the 2008 Crash

The Irish government nevertheless displayed a spectacular courage and strategy to resolve the economic crisis of the time. In fact, the admirable recovery is often cited by economists worldwide about to do something right.

The one very evident consequence was the stagnation of property development in the immediate aftermath of the 2008 crash. This lead, in subsequent years, to a high demand for property simply to accommodate population growth and movement.

Together with the progressive recovery, the Irish government empowered the property development loan as a phoenix rising from the ashes. Although there are slight fluctuations in growth, the Irish property market remains promising. Property development has again become a favourable investment.

UK Political Activity

It could be argued that political activity across the Irish Sea, such as the UK referendum on Brexit, has influenced this growth even further. Together with Ireland’s apparent political stability, the capacity of her government to lift the country out of economic crisis and ongoing growth, Ireland is becoming a favourite investment location once again. The demand for property development loans has resurfaced in the Irish Republic.

Demand for Property Development Loans in Dublin

Mainstream banks continue to have stringent criteria that will sometimes exclude property developers that need more flexible lending. Irish property developers continue to look for funding outside the high street and private funding has become available again.

Funding for commercial and residential property development loans in Dublin is reaching new levels in terms of demand. This could be because the proximity to the UK makes Ireland an attractive investment without all the speculation surrounding the Brexit process.

Ireland desperately needs an increase in available property. As developments increase, the demand for property will grow, fuelling the development market. There are those that argue that the uncertainty in the UK will have a negative impact on Ireland. Thus far it seems that the opposite effect has taken place.

Property Demand and Price Increases

Ireland needs more homes than it has available. There is substantial government sourced funding available for social housing. There is also a clear demand for private investment in property development loans.

The rise in house prices is indicative of this growth and the expected continued growth over the forthcoming years. If anything, Ireland is set to boom. Those looking for a way around the UK departure from Europe will look to their closest neighbour for resources and business growth.

Get a Good Broker

Experienced brokers are once again able to source some of the best Irish Property development loans in Dublin for investors seeking to develop and make a sound profit on property development. It’s a win-win situation for both the borrowers and the lenders. Even while mainstream banks are avoiding being drawn into the demand.

Belgravia Property Finance can source funding for developers and refer excellent development prospects to private financiers. With exceptional experience and a sterling reputation, they are a really good choice for advice and support.


Asset Finance – Exploring the Diversity of Lenders

Every business experiences cash flow problems in its lifetime. For small and new businesses, it quite often happens early in their lifetime. Established businesses will occasionally experience problems with liquid cash.

This is not necessarily a reflection on the financial health of the business. Rather, it reflects the economy surrounding the business. There are multiple reasons why asset finance may be the best option. When there are healthy assets to secure a loan quickly this may be ideal.

There may be a merger, or a company may need to finalise an acquisition quickly. Asset finance may then be the best available option. Lenders are less likely to falter when a loan is secured on strong assets and asset finance can be made available quickly. Loans provided as asset finance also have lower interest rates because the risk of loss is substantially reduced. They offer a secured risk, whereas an unsecured loan will cost more.


Asset Finance and Borrowing Costs

The cost of issuing shares or bonds can be prohibitively expensive and take longer. Raising funds through the securities market is also difficult, especially if time is a core factor.

Additionally, asset finance is secured on assets that have not been secured elsewhere. If they have been, usually the other lender will have to agree to subordination. This is often not a quick option and therefore why secured asset finance is easier to obtain.


Finding Asset Finance Lenders

A simple Google search returns list upon list of lenders that may be willing to explore and offer asset-based finance for you. Rather than simply approach each lender individually, it is best to use a broker and financial specialist to do this for you. Brokers have special relationships with their regular providers and they are also likely to negotiate better terms and rates for you.

There may appear to be a sea of funding resources out there. Remember this. Every lender is different as is every borrower. Some lenders will only provide finance for businesses in certain sectors. Assets may seem ethereal to some lenders, especially when it comes to tech companies with software assets.


Different Types of Asset Finance

Asset finance can also involve seeking funding for specific assets. There are more lenders available for this type of asset finance. Companies may want to fund new vehicles, manufacturing equipment, or even increase their tech footprint. Lenders secure the loan against the asset. In some cases, they will provide a lease agreement for a set period of time and provide the lease for the company after they have funded the acquisition of the asset.

Renewable energy and aircraft are popular new acquisitions that can be funded against current assets. Healthcare equipment and the agricultural sector can access asset finance too. It all boils down to finding the right lender.

Brexit fears have not affected the UK’s internal asset finance industry in the way that some forecasters suggested. For most in the UK, it is business as usual. There will always be business to be done, thus there will always be asset related finance made available.

This type of finance cannot be secured for startups. Lenders want to see a stable trading history. There is a clear requirement of at least two years trading to be in place before any lending can be considered. Once a business has a stable history of trading and can show consistent goodwill, asset finance should not be out of their reach.

Belgravia Property offer borrowing advice in all areas of unconventional finance and will help your business find its best asset finance opportunities. With established relationships with lenders, Belgravia is in a position to negotiate good terms and conditions as well as interest rates for you. Contact us for more information.


Property Finance – Why Investment Location Is Important

Deciding on and acquiring property finance will be influenced by the viability of the investment.

Properties in sought after areas will increase in value faster and will also demand a higher rental value. In investment property value cycles; the property values in sought after locations are less affected by an ebb when the cycle slows down.

Even when they are affected, the probability that they will drop below the purchase price becomes less likely. The rate at which they increase in value usually only slows down rather than coming to a halt.

When reviewing an application for property finance, funding sources will want to see the viability of the investment. This is the case for both retail and private funding providers. Location provides key information to this end.

When considering location, your property finance provider will want your investment to be safe for both the interim and the long term. For the interim term, the rental value is what will determine the return on the investment. This is especially in terms of rental value. And demand is what will drive the rental returns.

Selecting your location carefully will ensure that you have a sound rental return. Then, as the investment matures into a long-term high yield profit.

Understanding how location influences people locally becomes relevant when investing in either commercial or residential property.


Residential Property Finance

For residential property, factors such as how the property is zoned for local schools will influence demand. Access to local shops and retail facilities will also make a significant difference. The availability of doctors, dentists and a local hospital add to the value significantly too.

Don’t forget the demographic of the local population when considering your investment. A local fitness centre will be important to younger adults and families with children, but may become redundant to an ageing population.

Again, if the population are working age and need to get to the closest city for work, transport links become a vital factor in determining the longer term factors that will influence an increase in value.


Commercial Property Finance

Commercial properties ironically fare in a similar way. White collar workers will also want to access retail facilities on the way home from work.

This kind of convenience has become increasingly important. For many people, there doesn’t seem to be enough hours in the day. Not having to make a roundabout journey to collect the bread and milk influences where people want to work.

This will feature in a good employer’s business plan and stable businesses will think when choosing a location. Business locations that offer nurseries to parents of preschool children do better as well.

Accessibility to transport routes that enable people to get home quicker will add value to the property. This is especially for businesses that may have logistics concerns in their day to day running.

Local public transport, such as trains and buses, even intercity buses play a part in the long-term viability of a commercial property. Anyone wanting to use the property may need to be able to access public transport.


Signs To Look For 

Things to look for in determining the value of the location you are exploring include the following:

Firstly, the availability of high demand property. A glut of properties on the market may indicate an underlying problem that you’re not aware of, so tread carefully and be sure to investigate how much of the property type you are wanting to invest in, is already on the market.

A low supply of the investment property coupled with high rental demand will usually indicate that you are on to a good thing.

Check the distances to local amenities carefully and ensure that there are no planning issues quietly going on in the background. A motorway planned for construction through the middle of the idyllic neighbourhood in a couple of years’ time is a perfect example.


Trends To Monitor

When property values are still climbing even when the rental values are good, this indicates a strong trend. This type of trend is an excellent indicator of a good investment.

Obtaining property finance in this scenario should not be difficult. You do not want to invest in a property that will reach a plateau on resale value shortly after you have made the investment.

Low maintenance and running costs should always be considered as these will eat away at the value of your returns reducing the long-term value of your investment.

Combining these factors with the advice and knowledge of a good broker that specialises in investment property, both commercial and residential will shore up your investment tidily for the long term. Belgravia Property Finance can advise you on property investment UK-wide as well as several selected destinations worldwide.