Century Capital Q4 2024 Market Report

Executive Summary

By Paul Munford, Founder and CEO

Despite some challenging market conditions, Century had a phenomenal final quarter, with nearly £30 million lent in December alone. Some notable highlights from the past year include completing and redeeming our largest loan ever, doubling the size of our fantastic team and successfully diversifying our loan book with several big-ticket deals in the Home Counties.

The launch of our newest product, Century PLUS, expanded our reach beyond that of Prime Central London, and subsequently generated a flurry of activity off the back of our competitive rate reductions. At the end of Q1 2024, deals completed in PCL made up 75% of our book, down to 56% by the end of Q4. Whilst prime London properties are still our domain, our efforts to expand regionally have been paying off with various completions on some incredible properties located in West Sussex, the Cotswolds and Oxfordshire.

In the meantime, we have had a number of brilliant new additions to the finance team, including Dilshan Manamperi as Management Accountant and Varun Devjani as Financial Analyst. Both are uniquely equipped to deliver forward-looking insights that will drive Century’s business strategy and growth in the coming year. Ky Benjamin has also been promoted from Head of Lending to Director of Lending & Operations, and will now be overseeing the sales, marketing, lending and loan management teams.

As always, the festive period brought with it a busy social calendar. Century hosted our annual Christmas Broker Lunch at Mark’s Club, which is always a great opportunity to thank our key brokers. We also held the Century Christmas Dinner at The Maine in Mayfair, and exhibited at the FP Show in November, returning with our signature Century Gin Bar.

A strong pipeline positions us nicely for the year ahead, and we are confident that our exceptional team will continue to deliver outstanding, bespoke solutions for our borrowers. We remain committed to fostering lasting relationships with our clients by consistently exceeding expectations and driving sustainable growth.

Market Insights:

By Luke Navin, Managing Director

The short-term property finance sector continues to evolve and prosper alongside dynamic political and economic shifts. The end of the year is always a time of reflection; from legislative overhauls to turbulent markets, this past year has certainly been challenging for many.

In spite of this, it is important to remember the positive drivers of change in this period, including a slightly more stable outlook for inflation and a strong likelihood for decreasing interest rates. Bridging finance continues to rise in popularity and repute as a mainstream financial solution, with the BDLA reporting that its members’ loan books now total over £9 billion. Appetite for short-term solutions is increasing – a promising start to the year for the industry.

While sustained international interest keeps the prime London property market buoyant, forecasts suggest more challenges for the broader UK market. The aftershocks of the Autumn Budget and an affordability ceiling could mean that housing prices are beginning to plateau, potentially becoming more aligned with pre-pandemic levels. The majority of prospective buyers are hesitant to firm interest rates as they currently stand; torn between concerns over the potential economic impact of the budget and the urge to complete transactions before Stamp Duty changes take effect in April. Changes to taxation structure as a result of new employer national insurance increases is also a cause for concern.

Economic buoyancy in the US will have a positive knock-on effect for the UK, with historic levels of wealth generation in the States flowing over to the UK market. Several lenders reported a mass influx of enquiries immediately after Trump’s re-election, as affluent Americans seek a trophy home in London’s most prestigious areas.

With interest rates set to reduce and inflation rates largely nearing the target 2%, we are optimistic that market activity, specifically in prime central London, will recover. The general sentiment seems to suggest that there will be minimum three interest rate cuts this coming year, and we expect this to settle at around 3.25 – 3.75% by the end of 2025. Most likely, though, the pace will be slower than initially projected due to pressures from the Budget and sluggish economic growth.

Q4 Featured Deals

1. St John’s Wood Apartment

Century Capital lent £5.6 million on a six bedroom apartment in St John’s Wood, valued at £8 million. The flat occupies the third and fourth floors of a purpose built block, and benefits from exceptional facilities and amenities, including a communal garden and 24 hour concierge.

Loan Amount: £5,600,000

Property Value: £8,000,000

LTV: 70%

1st Charge

The borrower is a HNW British entrepreneur with a large property portfolio, who required additional capital quickly to refinance an existing first charge.

PROPERTY USPs

• Excellent central London location
• Close proximity to amenities
• 24 hour concierge and communal gardens
• Large terrace and balcony 4 underground car parking spaces

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2. London Development Project

Century provided a first charge development loan to a seasoned building developer based in London. They required additional capital to refinance the funds used for the initial purchase, and to provide cash flow to develop the property.

Loan Amount: £4,636,766

Property Value: £3,375,000

Property GDV: £8,500,000

LGDV: £54.6%

1st Charge

The borrower proposed to redevelop the former 4 storey hotel building into a large entertainment venue, with a co-working space and several food and drink spaces. As such, the loan will be provided in two tranches – a day 1 drawdown for initial refinancing, followed by an additional sum to fund development works as the project progresses. With this slightly more complex loan, Century worked hard to provide flexible financing to suit their timeline and needs.

PROPERTY USPs

• Promising commercial development opportunities
• Near prime location in a pedestrianised zone of the high street
• External terraced garden

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3. Oxfordshire Country House

Century Capital recently finalised a 2nd charge loan on a country estate in Oxfordshire – a stunning Grade II detached house with 9 bedrooms and an annexe flat. This completion is an excellent example of a Century PLUS deal, fitting the criteria perfectly.

Loan Amount: £945,000

Property Value: £10,000,000

LTV: 70%

2nd Charge

The borrower owns a real estate investment company, and has ample experience in identifying promising development opportunities. He had previously refurbished the property to a very high standard, but required a second charge loan to provide cash flow for his businesses.

PROPERTY USPs

• Refurbished to a very high standard
• Orangery extension with direct access to rear gardens
• Planning permission acquired for a new swimming pool, pool house, and tennis courts

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4. Coastal Development Project

Century have recently completed a first charge loan on a detached 6-bedroom property located in West Sussex, in a charming coastal town. With planning permission already acquired, the loan will be used to redevelop the property into two detached 5-6 bedroom dwellings, and complete a full refurbishment of the interior.

Loan Amount: £1,450,000

Property GDV: £2,330,000

LTGDV: 62%

1st Charge

The borrower required the loan to refinance another charge with a different lender, and also to fund development works

PROPERTY USPs

• Excellent coastal location, occupying a significantly larger plot of land in comparison to neighbouring properties
• Good links to transport and amenities
• Will be refurbished to an extremely high standard