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Prospect Capital relationship manager Stephen House tells Emily Moore why he is feeling optimistic about the property market – and his football club
AS a Manchester United fan, Stephen House has experienced his fair share of highs and lows over the decades.
But while he may have had somewhat less cause for celebration since the glory days of Sir Alex Ferguson’s reign, Steve is beginning to see some signs of more positive days ahead.
But it is not only his side’s recent string of results that is giving the newly appointed relationship manager at Prospect Capital a reason to be optimistic.
After the somewhat ironically named “growth plan”, delivered by then Chancellor Kwasi Kwarteng in September 2022, brought an abrupt end to the property bubble, Steve feels that this beleaguered market is finally on the road to recovery.
“I moved to Jersey in 1976 and although I’ve seen the local property market fall fairly flat a couple of times since then, this is the first time that I’ve seen vendors reduce their asking prices by up to 20%,” he reflected.
“But although market conditions have stagnated, and the impact on developers has been particularly stark, the recent cut in the Bank of England’s base rate is fuelling optimism and I think that this, combined with the fact that people will only stay still for so long, is likely to kickstart the market again in the new year.”
Having moved from Lymington, in the New Forest, to the Island to pursue a career with Midland Bank, Steve has spent his whole working life in the finance industry, going from Midland Bank to institutions such as the Royal Bank of Scotland and HSBC before spending the past decade working in property lending.
By coincidence, at the same time that Steve was moving into the property-lending space, friends Matthew Lawrence and Denny Lane were setting up Prospect Capital, a business which sets out to provide “specialist finance solutions across residential, commercial and development sectors”.
“I’ve known Denny for quite a few years now, and it was over one of our regular coffee chats that he asked me whether I would be interested in joining the firm, primarily to raise awareness of the company’s offer and to increase the business’s focus on the Jersey market,” Steve explained.
Attracted by the firm’s “caring and innovative” approach, Steve took up his new role at Prospect Capital in October.
“One of the things which has struck me most about the business is how client-centric it is,” he said. “This is a local company, which has a proven track record of successful property-backed lending and a senior management team which combines an entrepreneurial approach with strong corporate governance, risk management and legal expertise, all within an environment that is focused on the security of capital.
“Its co-funding programme has provided local clients with strong and secure returns for a decade, with each loan supported by the company’s own capital.
“While Prospect Capital is well established in the UK property market, particularly in London, the firm has operated very much under the radar in its home patch, and my role is primarily to raise awareness of the company’s services and to increase the business focus locally.
“Our main area of focus is short-term finance for acquisitions, development exits, refinancing, refurbishment and investment opportunities for both residential and commercial property, with a particular expertise in high-value and time-sensitive complex transactions,” said the keen golfer and member of the Royal Jersey Golf Club.
“We know there is a lot of wealth in the Island, as well as many excellent borrowers and developers, so we are keen to support property clients who are seeking to acquire, develop or sell property, as well as individuals who are interested in collaborating with us to benefit from strong, secure returns.”
And that, he adds, can be a particularly attractive proposition for clients, thanks to Prospect Capital’s “innovative approach”, in which the co-funder’s position is “significantly derisked as each loan is supported by our own capital”.
“The company always takes a first-loss position on a co-funded loan, which gives our clients that extra reassurance that their capital is protected,” he said.
“In the unlikely event that any loan has an issue, we would lose our entire capital before any of our co-funder capital would be exposed, something which I believe is unique in the market. Our proposition is also appealing to co-funders because all our loans are secured by way of a first legal charge over one or more high-calibre liquid assets, such as prime residential property in London and Jersey, which enables us to provide strong and secure returns.”
While acknowledging the challenges in the property and construction industries, Stephen shares Prospect Capital’s founders’ conviction that a “difficult market offers opportunities” and is confident that market conditions are now improving after a “challenging 18 months driven by the sharp increase in the base rate over a short time”.
“Entrepreneurs, borrowers and investors are still finding these opportunities, and our message is that we are very much open for business and ready to support those ambitions,” he said. “Whether people want to borrow from us or place funds with us, we are ready to facilitate those deals, and, importantly, to commit our own money by placing significant amounts of capital into each of those transactions. I would welcome an approach from anyone who is interested in finding out more about Prospect Capital, and I would reiterate that client care and security of capital is always at the heart of anything we do.”
