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An interview with Neal Moy

Neal Moy-hero.jpg

Neal Moy joined Paragon Development Finance as Deputy Managing Director in September last year. We speak to Neal about the first half of the Development Finance division’s financial year and the drive to go green in the housing market.  

Neal, the Development Finance division grew lending by 41% in the first half of the financial year. What do you put that down to?

There are three core reasons for the growth.

Firstly, we have invested heavily in the team over the past two to three years and we are seeing the benefits of that. We have successfully recruited a number of Relationship Directors from a range of competitors who have helped us expand our client base and regional presence in order to drive our new business levels up.

At the same time, we have built a strong Portfolio Management team to support the origination function, enabling them to focus on increasing our lending. In turn, we have improved the customer delivery on both sides and expanded our reach across more parts of the country.

Secondly, there continues to be strong demand in the market for the products that our customers build. People like new build homes, whether it be for the niche developments that many of our clients build or the smaller housing estates that some of our larger clients develop. For those developers who secure new planning permissions or acquire sites with planning, the sales market remains buoyant and gives our clients the confidence to launch new schemes.

Thirdly, I believe that our clients like working with Paragon and often recommend us to other developers too. They know we are experienced, we deliver what we say we will, we are consistent in our approach and we understand their requirements. Being part of Paragon Banking Group, a FTSE 250 Listed Company, also provides the benefit of being part of a well-capitalised and successful specialist bank.

What have you been particularly pleased with during the period?

Growing our book in a competitive market has been pleasing in itself but I think that our growth in the Purpose Built Student Accommodation sector has been particularly impressive. We successfully introduced our stabilisation product during the period, which means that we are able to support a PBSA developer throughout the lifecycle of their project, from acquisition of land to the stabilisation period post completion. There has been a good response to this offering from both existing and new clients.

It is also pleasing how we are further diversifying our portfolio on a geographical basis. During the period we have been particularly strong across the Midlands and South West, which we will look to build on going forward.

What are the key challenges for the sector?

Clearly, supply chains and inflationary pressures are biting construction as a whole at present and our clients are not immune to that. That is generally delaying projects or extending the time that it takes projects to complete. This is impacting the whole industry and will take a little bit of time to play through.

However, underpinning the sector is the strong demand for property. We simply aren’t building enough new homes in the UK and with a tight planning regime this is unlikely to change soon.

How are you clients adapting to the green agenda?

This is something the whole housing industry has to get right and there are new requirements for homes to be built to new energy efficiency standards on the doorstep.

We have already seen developers moving in the right direction and the vast majority of new homes today will be at least an EPC C rated. We launched our Green Homes Initiative late last year, which gives developers a financial incentive to build EPC A-rated properties and we have been pleased with the interest in that.

What can we expect for the remainder of the year?

Our aim is to continue doing what we are good at and that is supporting the needs of SME property developers and housebuilders. We want our clients to know we are committed to this market and to growing our business.

We expect to be launching some interesting new product initiatives soon, so watch this space!