We asked David Higson, who leads the Blackfinch Property team. With a passion for the sector and an expanding loan book and team, he’s supporting staff, developers and the market.
Please describe your work at Blackfinch.
I manage the property team, and a loan book of £75 million and growing. We support developers across the UK on residential and commercial projects with short-term bridging and development financing solutions.
You have moved from accountancy to property. How did that come about?
I worked at a big 4 accountancy firm where I did have some exposure to real estate deals but was always passionate about real estate investing. I had several personal development projects around property and was focused on investing. I wanted to move from an advisory to an investment role with a real estate perspective. So working at Blackfinch was an ideal opportunity.
What is your team’s current focus?
We have just completed our first deal in Scotland. We’re funding a restaurant in Glasgow run by a regional leisure group. We have taken on all the new challenges, including with legal documents, to arrive at a deal that is akin to asset-backed lending.
We will also soon be providing a development loan to fund an eco-park in the north of England. The funding will help around 50 lodges to be built.
More generally we are growing the team ahead of expected growth of assets under management. Scalability is always a consideration due to growth and we are always trying to make our due diligence process more robust while remaining efficient.
What wider resources does the team have in its work at Blackfinch?
Legal is an essential part of the Property team, integral to our work. Last year we brought the finance documentation on deals in-house which gives us greater control over managing the deal process as well as structuring the commercial terms of loans. We also work closely with the Technology team here. They are currently developing new software for one of our investment products that is going to create greater efficiencies as we scale up.
We’re also regularly in touch with the Renewables team within Blackfinch Investments, as we share some of the same funding pot. And we are increasingly working with the Group Marketing function to help us get our messages to market.
What are the outcomes for a business offering more flexibility than most?
Property developers can have a lot of hoops to jump through, and face a large amount of due diligence. Feedback from developers is often that larger institutions’ lengthy diligence processes mean they can sometimes almost have finished a development by the time they have got funding finally approved.
We obviously have due diligence, which is mandatory as we need to protect our investors’ interests, however we take a risk-based approach to some areas of a deal. This means we can take on deals where some other lenders may not be as pragmatic and employ a more commercial outlook. We also always have direct access to senior management, which helps with making faster decisions and less to and fro.
How is the market developing and what would you like to see change?
Whereas some regions of the South and London have hit a plateau, property prices are rising in the Midlands and North. So we are seeing a shift to more development opportunities becoming viable there as land value rises and investors increasingly seek higher yields in secondary cities such as Manchester and Birmingham.
In order for the entire market to grow, I’d like to see the conveyancing process sped up through technology, as at the moment this can slow down transactions. And recent tax changes including to stamp duty have not been helpful, so legislation to support the market is also key.
What’s next for your team?
It’s a great team full of people who are enthusiastic. Everyone has experience and interest in their field and we value that. Blackfinch is continuing to expand and we’ll be taking on more staff. We’re looking for those who are good communicators, commercially minded, and have attention to detail, which is essential for due diligence.
I also value people who have a proactive approach and will come up with answers, sometimes before I’ve thought of the question. Above all we’re keen to meet people who are hardworking and enjoy life, and will like the pace and variety at Blackfinch.
What is it about property and your role at Blackfinch that inspires you?
The work I’m doing here is part of my own interest: property is something I’m always happy to focus on in the office or at home. And in my role, I’m always learning something new; every day is different to the last. The challenge is fundamentally deploying money with a view to getting the highest return for the least risk possible.
Blackfinch as a whole is dynamic, entrepreneurial and ambitious. It’s always moving forward with new people and products. And it’s a meritocratic culture, one that recognises people who are hardworking. So it’s a great place to be.
For more information on our range of property deals, click here