Development finance and Bridging specialist, United Trust Bank believes that developers need to unlock their land banks and not allow current planning consents to expire.
The bank says that although time is often a healer of debt problems, current conditions with the economic outlook clouded by public spending cuts, the effects of tax rises, the moribund nature of the mortgage market and the high levels of deposit now required suggested that those developers and their lenders waiting for a return to 2007 price levels could be in for a long wait.
Noel Meredith, director at United Trust Bank said;
“It is our belief that there is little to suggest that by deferring development for another year or two, developers will be able to recover lost value. Therefore, given an increasingly challenging planning situation and the costs of establishing valid commencement, developers should consider pressing ahead and bringing their sites into construction. Of course much will depend upon the local market, many northern house markets remain difficult with little demand or turnover but funding is available from a small number of specialist banks and developers have an opportunity to unlock the value in their land.”