PDR extension: Good news for developers and the housing market
Like most development finance lenders, since 2013 BLG had seen a flurry of ‘office to resi’ PDR conversion schemes but over recent months this had begun to slow-down as the original PDR expiry date of May 2016 loomed on the horizon. Since the Government’s recent announcement that PDR will be extended, many schemes are back on the table. Clearly this can only be good news for developers and the housing market.
Word on the street: it’s all about pricing sites
Property development remains buoyant and BLG are being presented with a good number of schemes to fund. But the cost of sites remains an issue for some developers; with those buying on the open market often facing high prices. Our New Business team work closely with developers at the early stages to model project finances and review scheme feasibility; quite often engaging with BLG early-on provides developers with professional support to assist them with their scheme planning and site purchase negotiation.
Over recent months we have been presented with more schemes with planning in place. As confidence grows, developers appear to be more comfortable to take an option on a site, secure planning and then approach us for finance. This is a step-change which, we feel, demonstrates a higher level of commitment and surety in the market.
North, south, east and west: where’s best?
At the beginning of the year we confirmed that BLG’s nationwide new business team was in place; providing local support to developers across England, Scotland and Wales. Over the year we have been slowly building relationships with regional developers and now we have a steady flow of deals from all regions. This week alone I have visited developers and sites across Poole, Sheffield and Manchester.
As for housing sales, the speed to completion is fairly consistent across the regions. Standard housing stock, such as 3-4 bed homes, are selling quickly whereas the higher-priced 5-6 bed homes are taking slightly longer to sell. Overall, sales are progressing well.
At BLG we believe we can always improve our offering – which is to offer competitive development finance and fast access to funds. We have just won 2 new schemes due to our ability to price and fund quickly. Being able to deliver what developers need when they need it is central to what we do. Put simply, our business is helping you build.
Peter Wade, Chairman of BLG. October 2015