The owners of Newcastle wealth managers Tier One Capital have added £12m to its property lending pipeline, despite turbulent Covid-19 trading conditions.
The firm specialises in providing financial advice services and tailored lending to the property development market, and is also the investment adviser for London Stock Exchange listed TOC Property Backed Lending Trust plc.
Despite challenging times the team has reported a stronger than expected first quarter.
Founding shareholder and chief executive Ian McElroy said: “While the region is undoubtedly suffering from the uncertainty created by COVID-19, we are delighted to be witnessing some green shoots of encouragement, including a £12m increase in our property lending pipeline and a breadth of financial activity across our client base.
“The demand for the expert services of both our wealth management and specialist property lending teams has increased ahead of forecast, and I have no doubt that as a firm we will emerge stronger following this period.
“While it remains early days, I am encouraged by our performance during what has been an immensely difficult time for everyone, and with the same commitment I see no reason for this trend not to continue.”
Managing director Jess Swindells, one of Tier One’s principal shareholders, said: “While it has been a challenging time for most businesses, we are pleased to report that we are ahead of budget for the first quarter of our financial year. It seems that the lockdown period has encouraged many private investors to review their personal financial circumstances, which has led to an unexpected surge in activity for the advisers in our wealth management team.
“In addition, our direct lending team, which provides specialist lending to the property development market, has seen an increase in applications over recent months, which we suspect has been fuelled by government support for the housebuilding sector. The recent release of the government’s white paper on plans to reform the planning system provides further encouragement.”
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Head of wealth management Paul Blight, who became part of the Tier One shareholder base in 2019 following the acquisition of Carrick Financial Management, added: “One of the positive trends coming from lockdown has been the renewed focus by households on their personal finances.
“As uncertainty continues in the job market and pressure grows on businesses of all sizes, we have been working with existing and new clients to ensure they are as prepared as possible for any eventuality.
Robust cash flow forecasting, the reviewing of existing insurance policies and establishing regular savings commitments are all areas that our advisers have been asked to consider at levels higher than expected.”
The Tier One directors said it is equally well positioned to grow its specialist property lending services, attracting those looking for funding for residential and commercial property-based investment opportunities.
Fund manager and shareholder Brendan O’Grady said the TOC Property Backed Lending Trust PLC, which supports property investments and developments primarily in the North East, has seen a sharp rise in opportunities.
He said: “We have seen a significant increase in the number of direct lending opportunities presented to us over the last few months and our pipeline is growing rapidly, with a current gross development value in excess of £30m.
“We are also equally pleased with the credibility of the potential borrowers we are talking to, suggesting a pullback in development finance from more traditional lenders, especially in the North East. Despite implementing tighter internal lending controls in acknowledgement of the current market and potential economic headwinds, we continue to see higher than normal enquiries.
“As a North East based business, we are pleased to be able to use our skill set to improve the prosperity of the region, and we are privileged to be able to do so by supporting property developers looking to create jobs and homes in our region.”