As the United Kingdom continues its extremely slow yet steady crawl back to economic stability, experts believe that 2017 will bring about significant expansion in the development
Given the way in which the UK remains gripped by an unprecedented and growing housing shortage, it is seen as all-but inevitable that more funding will be made available for developers looking to capitalise on the shortfall.
“We feel that there will be a continued increase in the players that enter the development lending space, which will continue to benefit the client, whether it be more flexible products for relatively inexperienced builders or cheaper rates for higher leverage products for seasoned developers,” said Bret Jackson of Finance 4 Business.
“Whatever happens throughout 2017, we feel the development finance sector will continue to flourish.”
The government has already announced an extensive number of housing initiatives for 2017 – all of which will require the involvement of developers at a variety of levels.
Speaking on behalf of Positive Commercial Finance, director John Waddicker reaffirmed the inevitability of growing demand spurring a significant increase in the availability of development finance.
“We expect to see a general increase in the amount of development loans being provided by lenders due to the demand for more new housing,” he said.
“We do expect new lenders to come into the market and are already in communication with a handful of new-to-market lenders.”
But what’s particularly interesting about the current picture is the way in which a growing number of newcomers are posing genuine and growing threats to traditional high street lenders and major institutions. By embracing technology and creating the most innovative and accessible development financial products available to date, they are significantly diluting the appeal of conventional financial products with complicated terms, strict borrowing criteria and comparatively high interest rates.
Speaking on behalf of Fortwell Capital, head of PR and communications Bob Sturges stated that all this competition could potentially benefit borrowers even further by spurring something of a war on borrowing costs and interest rates.
“The opportunity will not go unnoticed by opportunistic players seeking an escape from the overcrowded, low-margin vanilla bridging sector; nor by investors seeking higher returns from their capital,”
“The effect of heightened competition could be to reduce interest rates and raise risk.”
On the whole, 2017 is expected to be a year during which the government rolls out considerably fewer challenges and bumps in the road than were seen in 2016. Along with being primarily focused on Brexit, the fact that the nation’s housing shortage is only intensifying makes it difficult to envisage legislation being rolled out that poses any kind of challenge to developers. Quite to the contrary, the on-going rollout of government housing projects is likely to ensure that more developers than ever before will find themselves with plenty of work available.