Extension rules offer secured loan opportunity
Tim Wheeldon is joint managing director of Fluent Money
Earlier this month Prime Minister David Cameron announced that the UK government intends to relax planning regulations for homes, shops and businesses, allowing owners to build extensions and add on conservatories without planning permission.
Warmly welcomed by many in the property market it is hoped that this action will go far in resurrecting the building industry, encouraging home owners to spend money on improvements and ultimately, boosting the economy.
Whilst this seems like a step in the right direction, it’s not the whole story.
We need to remember that just because the planning process has been made simpler it doesn’t mean that home owners will automatically have access to the funds to take advantage of it.
Although the new legislation does go some distance in financing this, with the Treasury underwriting up to £10bn of borrowing by property developers and housing associations, it has to be asked, who will help home owners benefit from this relaxation in regulation?
Let’s face it, very few people have a pot of money big enough to fund an extension or refurbish their property.
There is a real opportunity here for the secured loan industry.
In a time when it is becoming increasingly difficult for home owners to remortgage their properties, this could be the perfect chance for secured lenders to step in and show their worth, offering competitive loans to those who need access to the funds that could help increase the value of their property.
Everyone in the industry should seize the opportunity to fill this potential gap in the market and expand their customer base, in order to bring this potentially economy boosting move to fruition.