‘The government could be doing more to create awareness of alternative finance’

'The government could be doing more to create awareness of alternative finance'



Development Finance Today has been told the government needs to raise awareness of alternative lenders in the wake of David Cameron’s recent announcement on housing..


Development Finance Today has been told the government needs to raise awareness of alternative lenders in the wake of David Cameron’s recent announcement on housing.
The Prime Minister recently revealed plans to set aside £1.2bn to build 30,000 starter homes on underused brownfield land over the next five years.
At the time, LendInvest, the online development finance lender told DFT that this was great news for small developers and alternative finance lenders.
But, Ashley Ilsen, Head of Lending at Regentsmead, is not so sure. 
“The government could be doing more to create awareness of alternative finance and relevant providers of alternative funding,” said Ashley.
“Whilst pictures of David Cameron on a building site in a hardhat make for good headlines, I don’t necessarily think the government has gotten to the crux of the problem.”
Ashley added: “Finance and access to quick and easy funding is one of the main supply side factors in the housing industry, so it would be great to see more activity from the government to help show this as a viable option for SME builders and developers.
“If the government truly want to assist with the chronic new housing shortage they should simplify the planning system, and Regentsmead was very pleased to be involved in government consultations on this last year which we hope come to fruition.”
Scott Marshall, Director at Roma Finance, said the country’s housing needs could not be solved overnight and, because zoning areas for development will take time, it will be several years before the problem is resolved.
“But there will be an increase demand as plots of land are released for development,” said Scott.
“Right now we’re seeing a high demand for permitted development conversions and property renovations. 
“HMOs are growing in popularity too as landlords see a real opportunity to maximise yields and increase their profitability.”
Meanwhile John Waddicker, Director at Positive Commercial Finance, is expecting more demand for specialist finance as more residential developments are approved.
“There’ll be demand not only for lenders and brokers but other services that are needed to progress a development loan such as valuers and solicitors,” said John.
“However, all these new houses are going to need access to land to be built on, so there needs to be close co-operation between the industry and landowners too which will drive new joint ventures to progress the schemes.”
Bob Sturges, Head of PR and Communications at Omni Capital, said the government’s housing plans felt like ‘Groundhog Day’, but believed that this would result in greater opportunities for specialist lenders.
“Many smaller house builders are still struggling to obtain finance, often because they're unaware that there are now alternatives to the big banks,” said Bob.
“The government could help by providing free, educative advice in this regard. I also see a positive role for our trade bodies - the National Association of Commercial Finance Brokers and the Association of Short Term Lenders - to ramp up the great work they're already doing to make SMEs aware that there are choices."


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