We were delighted to feature in this months Showhouse Magazine with the following article:

 

As we head into 2015 I can confidently state that there is a plentiful supply of development finance options from a vast range of lenders. 2014 was the year of “stretched” senior debt where specialist lenders provide up to 90% of project costs, offering a cost effective alternative to mezzanine finance, and a much slicker funding transaction given only one lender involved.

We have seen an increase in the number of senior debt lenders offering up to 65% of GDV (or 80% of project costs), and the number of lenders now operating on that tier keeps the pricing competitive. Facility structures have also been modified to demonstrate lender flexibility to enable them to win deals. Some lenders have waived and even removed exit fees altogether to stand out from the crowd.

It's fair to say that even the first tier lenders have had to “sharpen their pencils” in some instances to maintain existing relationships and retain market share.

Whilst the institutional lenders still focus on established locations, the healthy number of specialist lenders in the marketplace now means the whole of England (and some parts of Wales & Scotland) is covered.

As a broker at the “coal face”, we have specialised in property development finance since 2007 and the funding landscape has changed dramatically even in that relatively short time. Lots of developers now look beyond existing bank relationships to the specialist providers where the increase in the cost of funds is more than offset by enhanced loan to costs, greater flexibility and speed of decision making.

John Waddicker