Octane Capital: 2019 to show shades of similarities to 2009

Michael Lloyd

January 18, 2019

This year won’t be as dire as the financial crisis in 2009 but will show ‘shades’ of it, Mark Posniak and Jonathan Samuels from Octane Capital forecast.

While it could be a difficult year for the bridging market, they believe Octane, which launched in May 2017, is well placed to grow despite the difficult conditions.

Posniak, (pictured), managing director of Octane, said: “We started our last business in the height of volatility and uncertainty.

“We don’t think it’ll be the same as 2009 but there are shades of similarities. And with uncertainty comes opportunities.

“Those who are well positioned, well capitalised and here for the long haul, will make hay. You need to have gone through the down to understand there’s different scenarios and you can still prosper. We are very much looking forward to the future.

“We’ve set up our business and we’re trying to grow it. We’re here to support our introducers. We’re working with partners that understand you’ll all in it together. I think we’re in for a great ride.”

Samuels, founder and chief executive of Octane, said: “It’s a very different market now than in 2009.

“We haven’t been in a market that’s been increasing with rapid year-on-year growth in property prices – it’s been quite flat. Growth has been small and depends on what part of the country you look at.

“And I think a lot of the Brexit concern has been factored in. It’s resulted in a plummeting of transactions and both buyers and sellers have been sitting on their hands but the real issue that could hurt us more than Brexit, and even a no-deal Brexit, is a general election that goes the wrong way for the property market.

“It would slow the property market down and we’d see a few lender difficulties if those things happen.”

Brian West, director at Central Bridging, highlighted that the bridging industry grew out of the last recession and is now worth £4-5bn. He predicted that the market will remain robust in 2019.

He said: “I don’t think there will be any material growth this year but I think the market will stay about the same size as last year.

“It’s a much bigger, experienced industry and if we end the year a little bit leaner and fitter with a few casualties, that’s all well and good from a purely selfish perspective.”

He said he doesn’t necessarily see more lenders facing difficulties as a by-product of Brexit and that Central Bridging has prepared as much as possible for it by strengthening its funding lines.

He added: “Our funding is perhaps more diverse but not as rate driven. In the event of a no-deal Brexit we’ll probably have some funders that’ll sit on their hands for six or 12 months.

“But after the referendum vote we had some funders that pulled away from us for a period while we had others that said ‘get lending, there’s an opportunity here’ so in the immediate aftermath of the referendum vote we had a considerably busier six months than the six months prior.

“I don’t know what’ll happen with Brexit, I’m just hugely frustrated with the shambolic nature of the situation we’ve reached with politicians that seem to be consumed with their own self-interests rather than the national interest.

“Many funders and investors across the globe have faith in the UK and are not fussed about Brexit. They still want to come over to London for the summer.

“They see the temporary uncertainty but also the long-term big picture of the stability and rule of law. Many people we’ve talked to see it as a blip that’ll pass.”

Nick Hilton, director of lending at Glenhawk, remained optimistic about the year ahead and said that Glenhawk is looking to grow and become FCA regulated to be able to offer both unregulated and regulated loans.

He said: “I think the industry will survive and will look to grow. You have to mitigate your risks which is what we’ve done. You have to build your business sensibly and lend pragmatically.”

Enter your e-mail address to receive updates straight to your inbox



Show Comments