Sourcing funding is greatest difficulty for developers

Published on

New research from Shawbrook has found that property developers say funding is their key concern.

77% of developers said that finding funding was the most complicated aspect of their business, with 75% saying there are limited funding options for developers.

Significant numbers of developers have been rejected from accessing funding, with 26% having been rejected by a mainstream lender multiple times.

The conception of a business appears to be the hardest stage to secure funding, with 80% of developers stating that it was particularly difficult to find funding when they were starting their business. This is followed closely by 74% of developers who felt that it was harder to secure funding for a smaller business.

However, the majority of developers agree that no matter the size, sourcing funding is the hardest part of running their business (78%), with the same number agreeing that it is the funding expertise that is difficult to source.

However, specialist funding is available for developers struggling to access funding for their projects, and 77% said that specialist lenders offer better support to developers.

Terry Woodley, head of development finance at Shawbrook, said: “Without significant housebuilding activity, the manifesto targets of the main parties have no chance of success. Housebuilding is a key issue on the political agenda, but developers need support to understand the funding landscape and access the funding levels they need so that these much-needed projects can get off the ground.

These developers that have struggled in the early stages of their business have gone on to build significant businesses, yet it’s clear funding is still a real barrier for entry, and early stage growth. There is funding available, and working with a specialist lender can help with structuring developers’ funding needs to surface that liquidity. If the gap is not addressed, promises to boost housing numbers will be very difficult to achieve.”

Latest POLL

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Square 1 Media announces May Mortgage Market Debate

Square 1 Media is to hold its next Mortgage Market Debate on Wednesday, 21 May,...

Coventry BS maintains status as one of the best workplaces

Coventry Building Society has been named one of Great Place to Work's UK’s Best...

Atom bank breaks Near Prime record

Atom bank has reported another record-breaking month for Near Prime activity. Over the course of...

Berkeley Alexander appoints new BDM

General insurance provider Berkeley Alexander has announced the appointment of Grant Robinson as a...

Other news

Lenders must step up on high LTV products

Things are on the up for borrowers with a smaller deposit. The financial information...

Square 1 Media announces May Mortgage Market Debate

Square 1 Media is to hold its next Mortgage Market Debate on Wednesday, 21 May,...

Coventry BS maintains status as one of the best workplaces

Coventry Building Society has been named one of Great Place to Work's UK’s Best...