A recent survey carried out by the Federation of Master Builders (FMB) found that 69% of SME developers were yet to see any significant changes to their businesses as a result of the EU referendum.
[color_quote]From our perspective, there appeared to be a short period when most businesses and individuals took stock of what was, for many people, a surprising outcome. However it increasingly seems that most developers quickly got back to the job in hand but perhaps with a closer eye on the potential for increased material and labour costs and a somewhat higher degree of caution with regard to house prices in certain areas.[/color_quote]
The FMB’s survey findings very much reflect our own experience as a development finance lender and the approach we’ve taken since the decision to leave the EU was made. At United Trust Bank it’s very much ‘business as usual’ and broadly speaking I think the mood of the industry is positive.
The UK continues to suffer from a chronic shortage of new housing and the SME developer sector has a vital role to play in meeting the need for new homes. Demand for new homes remains strong and we believe there are excellent opportunities for SME developers to make a substantial contribution to the hundreds of thousands of new homes we need to build each year.
Securing development finance is frequently reported as one of the key challenges facing SME builders and some may be concerned that banks will be less inclined to lend in the current environment. In our own recent survey, over a third of brokers working in the development finance sector indicated that they believed that, over the next year, it will become harder for builders and developers to secure funding to commence new development projects.
Whilst some lenders may be less active, experienced specialist lenders, like United Trust Bank, recognise that the demand for good quality, reasonably priced housing is going to endure for several years, if not decades, to come. As such, as long as developers can demonstrate a thorough understanding of their market, have done their sums properly and can prove the quality of their previous work, [pull_quote]UTB will be very keen to discuss providing the funding for their next residential new build and conversion projects.[/pull_quote]