Availability of finance to be key development issue
Some 28% of brokers suggested the availability of land to be the biggest issue whilst 15% were most concerned about the impact of rising house prices.
The availability of mortgages and the ‘Help to Buy’ scheme were rated as most important by less than 1 in 10 brokers.
Noel Meredith, executive director at United Trust Bank, said: “The availability of development finance has been an issue for brokers and developers these past five years.
“Although I expect the High Street Banks to gradually increase their willingness to lend I believe this will be on a much more conservative basis than pre-credit crunch criteria and levels.
“In the meantime established specialist lenders, such as United Trust Bank, along with some new entrants to the market have been able to keep developers building when their own banks weren’t interested.
“Having become accustomed to the flexible, bespoke nature of funding from an experienced specialist lender coupled with the very high service levels offered, there will be many who will remain with the ‘challengers’ even when the bigger banks decide to open their vaults.
“Developers with well-planned and fully thought through projects should be able to find enthusiastic and competitive finance partners if they, or their brokers, look beyond the High Street.
“Experienced developers able to demonstrate a good track record and a sound financial footing shouldn’t have too many problems finding funding for most types of projects with one of the specialist development finance lenders.”
Brokers appear split on whether the government was right to withdraw its ‘funding for lending’ support package for residential mortgages with 52% believing it was the right move and 35% believing it was wrong.
The Bank of England withdrew FLS support for residential mortgages from February this year fearing it might contribute to rapid house price inflation.
The announcement, in November 2013, hit the shares of the UK’s biggest house builders but it remains to be seen if the move will have an effect on transactions or curb rising residential prices.