38% of brokers working in the property finance sector believe that over the next year it will become harder for builders and developers to secure funding to commence new development projects. The survey, carried out by United Trust Bank, received over 300 responses.
Q – Which of the following is likely to happen over the next 12 months?
- It will become harder for developers to access development finance – 38%
- The availability of development finance will remain broadly the same – 59%
- It will become easier for developers to access development finance – 3%
Noel Meredith, Executive Director of United Trust Bank, commented:
“There’s clearly a perception amongst a large number of property finance brokers that any jitters about the UK property market will lead to the availability of funding for SME developers drying up. Indeed, there have been indications that some lenders, or the funders behind them, have reconsidered their appetite for development finance following the Brexit referendum. However, several specialist banks, UTB included, have funds available and are very keen to lend them. UTB’s depositor base provides us with a flexible and reliable source of funding which can be increased as demand dictates.
“United Trust Bank has supported SME developers through thick and thin and when many lenders withdrew from the development sector, especially during the credit crunch, we stood by our customers and increased our lending.
“Development funding has certainly not disappeared, but the lending landscape has changed. In the last few years, established and newcomer specialist lenders have demonstrated that they are credible and in many ways superior alternatives to the larger banks which once dominated the market. UTB provides a tailored service to its borrowers and our knowledge, experience and understanding of the challenges developers can face has been built over several decades and through good and bad property markets. This this adds real value to the lender/borrower relationship.
“If an experienced developer presents us with a well-planned and properly researched proposal which includes good evidence of strong demand for the planned homes at the target sales prices and they can demonstrate previous success of developing for that sector, we will be very happy to consider lending them substantial sums of money.”