Access to Finance 2016: How to get a housing development funded.
Regional and local home builders have always struggled to access good finance for development schemes. Like most UK SMEs, our smaller house builders do not enjoy anything like the support they deserve from lenders. Mea Culper, I have been a banker for +30 years and focused on real estate finance for the last 25 and I know we are not good enough!
However, if the road to resolution starts with acceptance that there is a problem, we have at least taken that important step. And we want to change developers’ experience of funding; we want to bring our customer service up to the best standards and grow our lending.
What makes a successful developer in BLG’s view?
Home builder finance has moved out of the dark days of the post credit crisis, funding is available from BLG and other organisations like us. Credit quality crucial and it all starts with our borrower. Construction and development is complex. In our view a successful developer manages these complexities through good organisation, a strong team and drawing on a breath of experience.
BLG will fund most types of residential development although we favour mainstream schemes. The developments must be well researched in terms of cost, planning, construction risk and sales values. We check all these rigorously. But ultimately it all boils back to the developer/lender relationship. Relationship management is an overused term but an under applied concept, at BLG it’s at the heart of everything we do. Our nationwide team are regionally based so we aim to know local markets and be on hand to support the development and home building programme.
Our business is helping you build
In general terms, specialist finance for 2016 provides a more tailored service; we know the house building market and understand development. We aim to be partners, not just finance providers, but mostly we want to help developers build more homes.
Stuart Parfitt, Managing Director, BLG Development Finance