Guest comment: Still plenty of mileage in real estate banking jobs

eFC logo

John Lenz, consultant at financial services executive search firm Healy Hunt, says real estate bankers have no need to fear a downturn just yet.

Despite the prospect of an impending correction in the UK real estate market, the outlook from a jobs perspective remains positive.

The majority of UK property participants are now in agreement that the real estate market is at boiling point. They argue that the extraordinary bull market of the last thirteen years has run its course and the best we can hope for is quieter times.

Rising interest rates, excessive risk-taking by property investors, higher inflation and a dollar crisis in the US has led many to believe we are now at the top of the property cycle and are on a spiral downwards.

Is the dampening of attitude towards the UK real estate market having a negative impact on the amount of hiring in the sector? Not yet - there's still plenty of mileage in the UK real estate sector from a jobs perspective.

What's the reason for this bullishness on hiring? Better returns overseas, a turn to more sophisticated forms of finance and a continued high level of property development in the UK continues to fuel the market's hunger for talented individuals.

Property development in the UK continues to increase, which from a banking perspective offers shorter-term returns and higher up-front fees. You only need to count the cranes on the skyline to get a picture of how prominent property development in the City is at the moment. The net result being more jobs!

That's not to say everyone's upbeat. Most of the property bankers I speak to are in general agreement that the UK property market has peaked and the returns experienced during the bull run will be much more difficult to achieve. There are still opportunities out there but compression on yields, higher competition for deals and rising interest rates mean that people have to work twice as hard to make money in the UK.

As a result, property bankers are increasingly turning to Europe to do business and those people with a network of European clients, a second language or experience doing deals in developing markets such as Russia or Central and Eastern Europe are becoming more sought after by banks.

So is polishing up on one's German or French the only way to get your new job in property? Maybe, but banks are also turning to more structured forms of financing such as equity and mezzanine finance, which, while riskier, offer opportunities for greater returns. Also, the tightening of capital markets means greater business for the traditional balance sheet lenders. This, in turn, is having a positive influence on the UK jobs market as balance sheet banks continue to hire.

Popular job sectors

Loading...

Search jobs

Search articles

Close