Risk Warning: Don’t invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

November Newsletter

Dear clients, friends and colleagues

I trust that you are all well as we push onwards through 2020.

I think we are all, in varying degrees still adjusting to the events that continue to impact significantly on our daily lives with the full economic and psychosocial impact of the pandemic remaining unknown.

No sector is immune from the effects of the pandemic but I remain optimistic for lending within the property sector, albeit values may be subject to future weakness.

I am using these updates to not only keep you abreast of how we are managing as a business through current times but also to give you an overview of the property market in general, as this is where our primary security is focussed.

I am open to feedback about future communications, as I am keen to keep content relevant.

Sancus Secondary Market

Throughout the first pandemic lockdown, we adjusted our operating model swiftly to adapt to new working conditions, which has put us in a strong position with the second lockdown that was announced at the weekend.

As well as completing on new loans we also have an active secondary market for our Co-Funders who wish to allocate further monies to seasoned loans on our books.

If you would like more information about these, please contact Emilie Golding.

The Economy & Property Market

The UK government’s post-COVID 19 stimulus package1 in July focussed on boosting sectors of the economy that were particularly badly hit by the virus (hospitality and tourism, unemployment, infrastructure and the housing market).  Although there were initial signs of recovery over the last month we have sadly taken several steps backwards as various parts of the country went back into lockdown before this weekend’s announcement of national lockdown.

To stimulate recovery in the housing market after four consecutive months of falling prices, the government also cut the amount of stamp duty owed on houses bought over £125k (in place to March 2021), to boost both the real estate sector and supporting building services.  At the same time reforms were made to planning laws to allow commercial properties to be converted more easily to housing.

These measures saw an immediate boost to the property market, with house prices in September being 7.3% higher than in the same month a year earlier, strongest growth since June 2016.2

We have also seen changing attitudes to work-life balance as one of the main driving forces behind accelerated activity in the prime housing market, with activity that could not have been predicted earlier in the year.

To put this in perspective, the number of sales agreed across the UK in September 2020 was 92% higher than the same month last year.3

Banks continue to shift their focus to lower-risk lending due to the economic environment, with the effects of both COVID and Brexit, this reticence to lend by high street lenders creates more opportunities for alternative lenders like Sancus.

The Bank of England has cut interest rates to a record low of 0.1%4 and has increased its bond buying programme by £300bn with speculation mounting about the setting of negative interest rates to stimulate the economy (encouraging banks to lend rather than deposit).

The reality of the effects of the pandemic layered with a “no deal” Brexit and the current US elections, I am sure you would agree, has led to tumultuous times for us all.  However, times of great change can also bring glimpses of new opportunities and I am a firm believer in being proactive in identifying how we can benefit from such opportunities.

I have been very proud how the teams across all our offices have adapted to this year’s challenges on a personal and more especially a business level.  When many of our competitors “closed up shop” this year, we not only stayed open for business but managed to complete loans during this period.

Property Opportunities as an Alternative

COVID has accelerated the already trending change that had started in property use.  As more real estate opportunities become available, developers and investors look towards mixed use property models with property acting as a way of diversifying portfolio risk secured on an underlying asset.

Alternative investments provide a number of potential benefits over traditional assets, including a low correlation to traditional bond and stock markets, a higher level of differentiation within the sector and in the case of short to medium term finance, more options on term length and risk/return opportunities.

Stress testing the portfolio

We continue to monitor and review our current loan exposure closely and any potential issues that may impact our security, value and the accrued interest on loans where interest is rolled up to maturity.

We are being empathetic to our Borrower’s who may be feeling the strain caused by the ongoing pandemic.  However, we are keeping pressure to bear to ensure that our loans are repaid on time, where possible, and COVID-19 is not used as an excuse for poor performance and/or behaviour.

With new loans we focus on the Borrower’s LTVs, take discounts on the valuation of security and factor in any potential delays based on the current socio-economic situation and subsequent impact thereon.  Clearly the supply chain may become stretched if a no deal Brexit take place.

In Summary

Although the world is currently in a dramatic period of flux, Sancus is very much focussed on business, supporting our local economies and sourcing funding opportunities for our Co-Funders, combining this with a heightened level of risk awareness, all supported by our highly experienced and knowledgeable team.

We continue to have a very active pipeline of new loans and the team is working hard on ensuring any new co-funding opportunities fit our risk profile within the current economic climate.

As always, we are always available to talk and answer any queries you may have, please email your relationship manager in the first instance, here are our staff contact details.

Kindest regards

Andrew Whelan,
CEO, The Sancus Group

T 01534 708900



Institute for Government

2 Halifax house price index

Savills “The UK housing market rebounds, but can it last?” September 2020

4 Reuters “BoE’s Sanders expects more stimulus as UK economy stumbles”

All news

Get in touch

Our Team of experts are keen to talk to you about your property finance requirements or funding with Sancus.

Contact us
Risk Warning: Don’t invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

Funding through Sancus is entirely at your own risk and the decision whether or not to is solely yours. The return on any funding opportunity is dependent on a number of factors and cannot be guaranteed. We cannot give assurances as to the creditworthiness of any borrowers, the collectability of any repayment, the quality and accuracy of any information obtained in respect of any funding opportunity or the enforceability of any security. In the event of a default, the timescales and outcome of any recovery is inherently uncertain. By using the platform, you knowingly accept the foregoing risks and you further accept that the role of Sancus is limited to providing an online marketplace for users and that information obtained from Sancus does not constitute legal, financial, tax or other advice or recommendation in relation to a funding opportunity, and you will conduct your own research and form your own opinion as to whether or not to participate in a funding opportunity. There is no recourse to the Financial Services Compensation Scheme, or other such government run compensation schemes. The UK platform is operated by Sancus Lending (UK) Limited, a UK incorporated company which is authorised and regulated by the Financial Conduct Authority, firm reference number 593992.