The Scottish specialist lending market is in rude health

Having been involved in the specialist finance market for a number of years now, it has been heartening to see the recent trend of lenders, especially within the bridging and development finance markets, look beyond London/the south east and the north west and explore opportunities that other regions in the UK can provide.

Related topics:  Blogs,  Specialist Lending   |   Daniel Yeo | Specialist Finance Centre
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3rd December 2021
Daniel Yeo Specialist Finance Centre
"Over the next three years, Scotland will be second only to the north east of England in terms of UK house price growth."

Now, compared to most parts of England and Wales, the Scottish market is in rude health. The latest Walker Fraser Steele Acadata House Price Index for Scotland found that house prices north of the border rose by 13.2% in September 2021, with 30 of the 32 local authority areas continuing to see prices rise over the year. In fact, the top five local authority areas by value in Scotland all set new record average price levels.

The report noted that property at the top-end continues to underpin this growth as people opt for more space and continue to embrace working from home. Good news for high-end developers.

Demand is not expected to weaken in the near future either. Hamptons has forecast that over the next three years, Scotland will be second only to the north east of England in terms of UK house price growth. This will be music to the ears of investors looking to buy property, develop and/or renovate and then sell on.

In addition, the private rental sector is solid. Statistics released by the Scottish Government show that 10 out of 18 areas in Scotland recorded a rental increase above UK inflation of 1.5% between September 2020 and 2021. Meanwhile, during the peak of the coronavirus crisis, the Scottish Government provided £39m to support tenants struggling to meet their rental demands.

Admittedly, during the pandemic a number of specialist lenders temporarily withdrew from new lending in Scotland but thankfully they have now resumed providing finance north of the border and have communicated their appetite to lend.

Of course, when looking for a partner in Scotland, you can’t beat those who have their feet on the (local) ground and have the market knowledge gained from years of operating in the area. At Specialist Finance Centre, we fully recognise the opportunities available in Scotland and know how important it is to have a physical presence there. That’s why we recently announced the launch of our proposition into Scotland as we continue our expansion strategy.

SFC Scotland is based in Glasgow and is headed up by Allan Smith, who has extensive experience in the development and bridging finance sectors having previously worked as a broker and a lender in Scotland. But we will also be able to offer first and second charges, commercial and buy-to-let, invoice and asset finance.

My message to investors and introducers in Scotland is simple. While you may feel – often quite rightly – that some firms in the intermediary space are ‘playing’ in the Scottish market, there are firms who are fully committed to finding the best outcomes by utilising their experience and local knowledge to the full. The outlook for the Scottish market is positive and at SFC Scotland we’re excited about meeting the growing demand for specialist finance and establishing some solid foundations in a market which will prove integral in meeting our ambitious 2022 growth plans.

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