In recent months, a number of bridging lenders based in the South of England have expanded their presence in the North, either via strengthening teams or opening regional offices.

“UTB has more BDMs providing broker support to more brokers across all lending divisions than ever before,” said Gavin Diamond, commercial director for bridging at United Trust Bank (UTB).

“At UTB, we haven’t only increased our BDM presence with more boots on the ground, we’ve also adapted our product range to suit regional variances.”

Anna Lewis, head of sales for specialist mortgages at Hampshire Trust Bank (HTB), added: “HTB is already transacting business all over the country and we are about to open our new office in Leeds.”

Meanwhile, Rob Jupp, CEO at Brightstar, said: “The Midlands and the North [have] always been busy areas for Brightstar and the lack of margin in many areas of London and the South East has expanded this opportunity.

“In fact, so much so that we opened our Manchester office at the start of May 2018 to allow us to maximise business opportunities.’”

Why the North?

“We are not surprised to see this continued trend of lenders expanding teams across the Midlands and the North,” said Ian Boden, sales director at LendInvest.

“As the London market slows, we are seeing an increasing amount of property investors active outside of the South East where demand continues to exceed supply.”

Steve Brennan, director of credit at ActivTrades, felt existing bridging providers had seen the opportunity to spread further North and had geared up accordingly.

“The London market is slow and prices in prime London have been falling for some time now.

“Opportunities are being explored more widely now by investors and [bridging lenders] are naturally tracking where demand is rising.”

Michael Dean, principal at Avamore Capital, said it currently doesn’t lend in the North, but it had been in talks with northern-based professionals to establish an ‘Avamore North West’.

“The underlying property market seems to be a bit more buoyant as property is less overpriced and regional economies in the North are seeing positive economic performance.

“[Bridging] lending in the South is crowded, despite a soft property market.”

Paul Riddell, head of marketing and communications at Lendy, said bridging lenders were seeing growing interest from areas outside of the capital.

“In particular, Manchester, Birmingham and Leicester are seen as the current hotspots, with Essex and East Anglia also growing fast, [with] healthy first-time buyer and rental markets driving demand.”

Chris Oatway, director at LDNfinance, said that there had been a clear movement out of central London over the last three years.

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“Many of the new lenders that have entered the market are flexible in terms of which location they are willing to entertain and the more established lenders who used to only consider deals south of Birmingham are now considering the well-known cities in the North.”

Jack Coombs, director at Aspen Bridging, added: “At Aspen, we are keen on lending opportunities in the North.

“Since 2008, property values in the North have not experienced the same growth as other parts of the UK and the underlying earnings ratios are low compared to the historic averages.”

Carl Graham, BDM for the North of England at Octopus Property, expected to see more business to be written in the North, as well as other regions.

“…As a result, lenders will continue to strengthen their offering, both in terms of lending capabilities and staff.

“The challenge is building a team that truly understands the local market drivers and is fully immersed among the intermediary community, as every part of the UK is different.”

Could there be consolidation between southern and northern lenders?

“I don’t really see this on the immediate horizon, but it is very feasible that a larger, southern-based lender looks to buy market share and local expertise by acquiring a smaller northern lender, where both can benefit from the economies of scale,” said Chris Whitney, head of specialist lending at Enness.

Vince Bull, managing director at VATBRIDGE, said there was no reason why southern lenders wouldn’t partner with northern lenders.

“There is some thought that consolidation might be a good thing.”

Paresh Raja, CEO at Market Financial Solutions, felt that if a bridging lender wanted to establish a strong presence in a particular region, one of the quickest ways to achieve this would be to partner with a local lender.

“For a larger, London-based lender, for example, entering into a partnership with a northern firm would not only help it quickly access new borrowers and brokers, but it would also enable them to benefit from the northern lender’s greater local knowledge, such as property hot spots and market trends.”

Jonathan Sealey, CEO at northern-based lender Hope Capital, added: “…I definitely see the possibility for southern lenders to partner with those in the North; they just need to make sure that they have similar values, lending standards and attitudes to risk, but as long as the businesses are complementary, I’m sure that we will see some partnering and collaboration.”

Alternative routes to the North

Not all lenders felt that collaboration was the way forward, with Richard Tugwell, group intermediary relationship director at Together, stating: “I wouldn’t expect southern lenders to partner with northern ones.

“This is more about distribution reach and sales teams can be on the road regardless of [the] geographical restrictions of a main office.

“Similarly, the technological advances through digital and telephone channels continue to make the country smaller.”

Keith Aldridge, managing director at Amicus Property Finance, added: “It simply hasn’t been necessary to employ a ‘sales team’ or BDMs to serve our markets and lending ambitions.

“We maintain our business through our relationship managers and our ‘roving underwriters’, which is a popular model with our stakeholders.”

Emma Cox, sales director for commercial at Shawbrook Bank, felt there could be collaboration between smaller lenders, but felt expansion of their own teams was more likely.

“Many lenders are already successfully operating nationwide and a strong field sales presence can make all the difference.”