38% of brokers predict future lack of funding for developers

38% of brokers predict future lack of funding for developers



More than a third of brokers are predicting that developers will find it harder over the next year to secure funding to start new projects.


Recent research conducted by United Trust Bank (UTB) found that of the 300 brokers in the property finance sector surveyed, 38% felt it would be harder for developers to access finance.

Just 3% felt that it would become easier for developers to access development finance, while 59% said availability of finance would remain the same.

Noel Meredith, executive director of UTB, felt that there was a perception among a large number of property finance brokers that any jitters about the UK property market would lead to the availability of funding 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.”

Noel said that UTB had supported SME developers through thick and thin as he felt development funding hadn’t disappeared, but the landscape had 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 adds real value to the lender/borrower relationship.”

Noel concluded by adding: “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.”



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