William Newsom looked uncharacteristically sheepish on Antiques Roadshow last month. The Savills director nodded at the floor when told an ancient drinking vessel he owned was worth £20,000. No such reticence on Tuesday when he presented Savills’ 27th annual Property Finance Survey in the ecclesiastical atmosphere of the Merchant Taylors’ Hall in the City.
Newsom preached good news – and not quite such good news. The good news: loan originations rose by 50% last year to £45bn, spurred by the entrance of 46 new lenders, taking the number of fresh entrants over the past three years to 150. Debt is down to £140bn from £250bn in 2010. Conclusion: We are in a “Goldilocks period – not too hot, not too cold”.
The not quite such good news? Mezzanine lenders are pushing LTV ratios beyond 80%. Applicants pushing senior debt lenders for LTVs of 65% have jumped from 20% to 50%. The not very good news? Around 90 of the 150 new lenders are “non-bank” organisations. The really bad news? Their market share will rise from 13.5% this year to 30% by 2020.
PS: in the US, “non-bank” mortgage lending to poorer folk is ballooning. Quicken Loans and loanDepot.com are eating into the market share of traditional banks, which are far more tightly regulated since the 2007-08 crash. These so-called “shadow-banks” have doubled their market share of government-guaranteed loans to 53% of all advances since April 2013. You press down on a bubble in one spot…
Stats say housing crisis over
The housing “crisis” is over. Honestly. Flip the page on stories that bleat otherwise. (except ones on London, which is another land). Let’s extrapolate the new-start numbers provided by the National House Building Council last week. Work began on 41,300 new private and public homes between February and April, a 20% increase over the same period last year. This upward trajectory began last autumn, with a 17% rise, boosting starts for the year to 145,000. Add 20% and you are heading towards 175,000 for 2015. What will it take to surpass the political target of 200,000? A 15% rise in 2016. That’s all.
A diverse influx of recruits
To CBRE’s offices at St Paul’s to talk to the Apprentice Network, set up by four sharply dressed young bucks who seem to be doing well at CBRE despite their lack of university education. Sammy Kingston, Wale Sansui, Christian Dale-Enderby and Tom Stevens look for all the world like younger versions of the graduates of Reading and Oxford Brookes who will be streaming into the agencies this year.
But there is one refreshing difference between those recruited under the new apprenticeship entry schemes that most major agents admirably now operate. About 50 property apprentices turned up at the event at CBRE. Roger Southam of Chainbow was the other speaker. I’ll leave it to him to describe the difference. “I have never, in all my time in property, been in a room so diverse as this.”
Out-cheekying the Aussies
To Fulham Palace for the immensely pleasurable retirement dinner for Development Securities director Julian Barwick. He
of the round glasses and occasional bow tie. A vintage collection of eminent folk milled around the ancient Palace courtyard, gossiping in the evening sunlight. It was a moment when you gulp down the bubbly thinking, “Crikey, it’s good to be alive.”
Dinner was in a tent resembling the one used in The Great British Bake-off. Lots of very nice things were said about a very nice man. So it only leaves me to repeat one criticism. I bagged a taxi ride home with Sir Christopher Benson, who, in 1978, hired young Barwick to join MEPC.
“He was a cheeky young sod” recalls Benson. “We sent him out to our Australian office to have the cheek knocked out of him. He ended up knocking the cheek out of the Australians.”
New steward sought
Don’t you love the idea that the Duke of Bedford employs a “steward” to tend his London estate, scattered around Tottenham Court Road? Last week His Grace announced the retirement of Mark De Rivaz from this historically-titled
role after 23 years. Will his replacement be given the new-fangled handle of chief executive? No, please, no!
