As we come towards the final few weeks of 2023, it’s been one of those years that seems to have flashed by in the blink of an eye, yet also one which – at times – has lasted an eternity.

This thought came into my mind due to the fact that only a few weeks ago we celebrated the first anniversary of our rebrand from First 4 Bridging and maybe my previous observation was a hangover from the work which went into this. Thankfully, this has been a huge success but it has not been without its challenges, as I’m sure many firms operating in the intermediary market can attest.

The rebrand also delivered on our intention to reflect the growing level of enquiries involving complex residential transactions, buy-to-let, second charge, commercial term loans and development finance that we were experiencing and how activity levels across the specialist market were changing.

During the subsequent 12-month trading period, we have noted a 37% increase in specialist buy-to-let business, a 31% rise in commercial mortgages and an 18% growth in secured loans. Focusing on the specialist buy-to-let uplift, within this, a high number of applications have emerged from first-time buyers/first-time landlords and for HMOs. And we have also remained active in the bridging and development finance sectors over this period as well as more recently seeing an uplift in our specialist residential business.

Specialist buy-to-let and commercial finance

The relationship between specialist buy-to-let and commercial finance is becoming  increasingly interlinked and a rising number of landlords are recognising the potential on offer from commercial and semi-commercial properties as they look to adapt their strategies in order to future-proof their portfolios.

This was evident in research from Shawbrook which found that one in five landlords (19%) are considering diversifying into commercial property, with 37% of these citing diversification as the key reason for doing so. Those who already own commercial properties are also planning to expand further, with 35% of landlords with commercial assets stating that they are looking to invest more in the near future.

With a greater proportion of workers returning to the office and a high-street revolution suggested to be underway, over a third of all landlords (36%) have noticed an increase in demand for commercial property and view it as a good investment opportunity.

In addition, a quarter of landlords believe there is currently a lack of good-quality properties for businesses, indicating a possible need for development or conversion work. With landlords seeing the opportunity to branch into commercial property as a chance to support their local community (29%), with many planning to invest in small (33%) and large (30%) retail space.

As highlighted in our findings, demand is on the up from a specialist buy-to-let business and commercial finance perspective and it will be interesting to see where this momentum takes these sectors over the course of the next 12 month.

Auction finance

Each quarter of online auction sales this year are reported to have outsold the last, and while winning new private treaty instructions remains a challenge, agents’ auction sales continue to grow at pace. 

Data from iamproperty’s Q3 Online Auction Index shows there were 2,530 properties sold online via the Modern Method of Auction in Q3, an increase of 31% compared to Q3 2022, and up 7% on Q2 figures. 

Capital value raised also reached a record figure of over £431m in Q3, an increase of 5% on the previous quarter and an increase of 27% compared to the same period last year. Sales in August alone topped £155m, which is the most capital value iamproperty has ever seen raised in a single month. 

These figures demonstrate the increasingly influential role being played by the auction process for both residential and investment purposes and also the rising reliance on the intermediary market to help facilitate these transactions. This is a trend we’ve experienced over the course of 2023, as meeting strict timelines and finding the most appropriate lending partner for quirky and sometimes unhabitable property types has proved a constant challenge for many intermediaries in such a turbulent and often unpredictable lending arena. And this is where a trusted specialist packaging partner will continue to add real value moving forward.

Donna Wells, Managing Director at Envelop