Julian Troup, head of UK hotels, said lenders appear to be genuinely ‘open for business’ thanks to initiatives such as the Government’s Funding for Lending Scheme to incentivise banks and building societies to increase lending to the UK economy via the provision of finance at competitive rates.
The Bank of England’s latest Trends in Lending report showed that demand for credit from business was expected to increase in the fourth quarter because of improved business confidence emanating from the strengthening economic recovery.
And recent data from the British Bankers’ Association showed a rise in net lending to all businesses in September and lending to small and medium-sized enterprises (SMEs) holding steady.
Mr Troup said banks were reacting to coming under more pressure to lend by the Government to ensure Funding for Lending provided financial support for corporate customers as much as funding for residential mortgages.
He said lenders now recognised that growth will come from supporting quality buyers of hotels with a proven business plan.
The increasing number of hotel deals – reflected by the number of hotels sold by Colliers International in the past year rising by 28 per cent to a total of 92 and with a combined value of more than £150m – also reflected the fact that owners of hotels realised that there was now a sellers’ market as opposed to more difficult conditions in which they could only sell for a reduced price.
Improved conditions in the hotels sector benefited both corporate and private operators – there was latent demand to sell from corporate wanting to ‘churn’ their hotels portfolio while private operators deterred from selling in the downturn now saw the chance to secure a buyer.
Mr Troup said: “The hotel industry is closely aligned to the wider economy and the general mood of the nation so as we see evidence of more positive sentiment generally that is reflected in the sector’s performance with less nervousness among sellers and a willingness to make that move that they’d put on hold.
“The market has definitely become more polarised with the gap between good quality and poor quality widening and banks focusing ever more intently on the operator and the quality and location of the asset.
“We’re not anticipating a flood of opportunities coming to market but are confident of seeing an ongoing increase in transactional activity.”