Tier One Capital owners add £12m to property pipeline, despite Covid-19 challenges

18 Aug 2020

The owners of Newcastle-based wealth management and property lending experts, Tier One Capital (Tier One) have reported a stronger than expected first quarter, despite turbulent COVID-19 financial trading conditions and the lockdown period.

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.

“A large part of our recent performance is down to the strength of our senior management team, many of whom are also the owners of our business, and our wider team, who have all contributed to the informed and decisive decisions made during the last six months that have set the foundations for our business to build on over the coming years.

“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.”

Head of Wealth Management Paul Blight, who became part of the Tier One shareholder base in 2019 following the acquisition of Carrick Financial Management, one of the region’s largest financial planning firms, 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.”

Tier One, which already has a strong foothold in the North East wealth management sector, is equally well positioned to significantly grow its specialist property lending services, attracting those looking for bespoke funding for residential and commercial property-based investment opportunities.

As part of its direct lending proposition Tier One is the appointed investment adviser to the TOC Property Backed Lending Trust PLC (PBLT), which supports property investments and developments primarily in the North East.

Fund Manager and shareholder Brendan O’Grady 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.”


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