Commercial Reporter spoke to Ashley Ilsen, now the Head of Lending at Regentsmead,
You said recently in a piece on Commercial Reporter that a full refurbishment of the rules of the planning process could be a good idea - what would you like to see changed?
Planning constraints vary quite heavily from council to council and what we see in one part of the country might differ quite heavily in another. This makes it harder for developers who are spreading themselves across different areas as some councils are widely acknowledged to be anti-development. The common denominator across the board is a lack of speed and common sense, with some councils either too sleepy or unwilling to deal with applications quickly and be in a position to take a commercial view. I’ve seen some people calling for the government to privatise the planning process, but this would open up huge opportunities for corruption and not having the interests of the local area at heart.
Suffice to say the current system needs serious looking at. In our discussions with DCLG last year some of the ideas we outlined focussed more on streamlining the process. This would include having a balance between a commercial decision and respecting the views and the interests of those within the area that is being developed. The bottom line is we aren’t building enough houses in this country, and the planning process is currently a huge barrier.
The question on everyone’s minds at the moment - what effect do you see the current political uncertainty and potential for a Brexit having on the commercial lending sector?
The fact of the matter is that we haven’t left the EU yet, and the process of leaving may take some years, in which case the effects of no longer being in the EU won’t be fully realised for a while yet. That being said as a result of the vote we have been plunged into an uncertain market, and markets never respond well to uncertainty.
We have been enjoying a period of the last couple of years of excess supply of liquidity in the market which has been great for consumers who have been enjoying a low cost of borrowing twinned with a very competitive market. We have already started hearing mentions of some lenders having their investor or bank funding lines temporarily pulled to see what happens over the coming months.
All I can say is that it’s a great to be in a position to be lending our own funds where we aren’t as subjected to market constraints.
Recently Regentsmead announced the launch of a new product was imminent, can you tell us any more about it?
We’ve been speaking to various sections of our broker community and the feedback on our existing products is very good. We need to carry on striving to deliver a market leading service twinned with as much speed and flexibility for our clients and introducer partners as possible.
It’s likely that our new products will be at a slightly lower cost to our customers, but this will include competitive rates for all residential development projects including new builds, refurbishments and conversions. It’s a really exciting time for us, the full details should be announced over the coming weeks so watch this space.
With the bank rate reduction recently announced, how do you think this will affect the development finance market?
I’m not sure this will have a significant impact as the development finance sector is a very compact and intricate space. There is already a large amount of cheap funding and liquidity in the market today. Banks certainly play their part in providing development finance, and from various discussions with counterparts at some major banks they seem to be less reticent in providing development finance than they were a few years ago.
Historically banks either lend too much or they don’t lend at all and their lack of activity since the crash in 2008 has allowed a swarm of different types of lenders to come in, some of whom have been good, some not so much. Ultimately it’s a very mixed market place today and may not be as subject to the BOE base rate as it would have been say a decade ago. It also comes down to brokers to advise their clients appropriately, as the cheapest lender is often not the best choice.
If you could read one headline about financial services, what would it be?
“EU Referendum Result a Belated April Fools Hoax”