Boutique commercial finance consultancy Mantra Capital has reported that March was its biggest ever month for debt arranged.

The firm arranged £62m of loans for its clients in March, compared to £32m in the same month last year, an increase of 94%.

March reflected a growing momentum during the first quarter of the year, its biggest yet. In Q1, Mantra Capital arranged £87m of loans in total, compared to just £62m during the same three months last year, an increase of 40%.

Mantra Capital’s founders attribute the growth in the development market to the sharp rise in small and medium-sized ‘challenger’ developers, the higher risk tolerance of challenger banks and the increased value found outside the capital.

Nick Neophytou, managing director, Mantra Capital, said: “With the supply deficit so extreme, the development market is seeing unprecedented activity levels. There is no shortage of experienced developers hungry to build, and equally a raft of lenders that are ready and willing to provide finance.

“At the current point in time the challenger banks and niche lenders are particularly active. We are seeing a definitive shift away from price and product towards speed and certainty of execution, which is where the challengers come into their own.”

“The UK’s development map is changing fundamentally, added Nimesh Sanghrajka, fellow managing director. “Developers and investors are increasingly looking beyond the capital in search of better value, with current hotspots including Birmingham, Bristol, Edinburgh and Peterborough.

“While the high street banks certainly haven’t gone quiet, there is a growing synergy between challenger developers and challenger banks that could have a material impact on solving the UK’s housing crisis.”