United Trust Bank (UTB) surveyed brokers on their views of access to finance for developers in the next 12 months. Over 300 responded and 38% said it was likely to be harder to secure funding. Only 3% thought things would get easier for developers, with 59% believing the environment will be broadly the same.
Noel Meredith, executive director of United Trust Bank, said there was a perception that “jitters” about the UK property market will reduce the availability of funding for SME developers.
“There have been indications that some lenders, or the funders behind them, have reconsidered their appetite for development finance following the Brexit referendum,” he said.
However, he added that specialist banks have funds available and are willing to lend to experienced developers with strong proposals.
“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,” said Meredith.
“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,” he added.