Banks are positive about lending in Belfast but need to be realistic about the size of the market, according to Craig Logan, property finance director at Bank of Ireland.
“In terms of the challenges, we need transactions to underpin investor confidence that has slowed down a bit. We are not immune to the economic factors that are happening in the rest of the world – factors such as Brexit, the US election and other macroeconomic features play their part here as well,” he said.
In relation to Northern Ireland’s own election in March 2017, Logan added that stability was key.
“If you look at potentially changing the government in the Local Assembly, nobody really wants uncertainty, so anything that can be done to take that away can be positive. Having said that, if you scratch the surface there is a surprisingly high amount of development activity in Belfast.”
According to Deloitte’s inaugural 2017 Crane Survey for the city, there were 11 schemes completed in 2016, with 19 more under construction.
Does this give the banks more confidence?
“It certainly does,” said Logan. Bank of Ireland is obviously an Irish bank, committed to doing business over the whole island to support the economy. When we see buoyancy in sectors such as hotels and reducing vacancy rates in core retail in the city centre, there are reasons to be positive.”
The loan-to-value ratios the bank is offering vary by asset class and quality but currently typically stand at between 60% to 65%, while margins are anticipated to move outwards in the short term.
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