The Intermediary – March 2025 - Flipbook - Page 7
SPECIALIST FINANCE
In focus
sticking points, adding unnecessary costs that
and has a clear plan to get built, we’ll find a way
ultimately are passed on to homebuyers.
to fund it. That’s the difference.”
Meanwhile, the planning system remains a
notorious bottleneck.
Dan Joyce, deputy managing director at Close
Brothers Property Finance, highlights the latest
Small but significant
If the Government’s 1.5 million homes target is
to become reality, then SME developers must
figures from The Home Builders Federation’s
be given the support they need to deliver. While
latest ‘Housing Pipeline Report’, pointing out
large housebuilders often steal the spotlight, it is
that “just over 230,000 units were granted
these smaller players that bring agility, creativity,
planning permission in the last year – the lowest
and local expertise to the table.
in a decade.”
Joyce adds: “Planning is the stage where
projects become stuck. Housebuilders are
working hard, they’ve got their finance in place,
Wayne Douglas, CEO at SME developer City
& Country, says: “SMEs play a crucial part of the
housebuilding fabric in this country.”
These firms can take on smaller, more
but they come up against delays over which they
complex sites that big developers overlook, and
have no control.”
create “more bespoke development that is a
The reality is that, without a drastic rethink on
planning reform, infrastructure investment, and
development incentives, these ambitious targets
will remain ambitious.
As Neal Moy, managing director of Paragon
Development Finance, puts it: “I would like
to believe that the 1.5 million homes target is
achievable; however, the Government will need
more attractive proposition to its surroundings,”
ensuring better placemaking and design, he adds.
However, SMEs continue to face significant
barriers – from planning delays and tax burdens
to one of the biggest hurdles of all: access to
finance.
Steve Turner, executive director of The Home
Builders Federation, warns that “the growing
to relax planning laws further and encourage
tax burden on new homes is now making
developers and councils to get building as soon
development in large areas simply not viable.”
as possible.”
Amid all this red tape, specialist finance is
stepping up where traditional lenders have fallen
short.
Unlike mainstream banks, which often have
to take a ‘one-size-fits-all’ approach, specialist
lenders tailor their funding to individual projects,
looking beyond rigid tick-box assessments.
Tanya Elmaz, head of intermediary sales at
He highlights the impact of the Building Safety
Levy, which will see SMEs – many of whom “have
never built anything higher than a family house”
– paying thousands per home to cover the cost of
remediating high-rise buildings built by other
parties.
Meanwhile, rising interest rates have made
securing development finance even harder, with
60% of SMEs identifying it as a barrier in the
Together, stresses that this flexible approach
most recent State of Play report by The Home
is key to getting homes built, as many
Builders Federation, Close Brothers Property
housebuilders struggle to access capital through
Finance and Travis Perkins.
conventional means.
“Specialist lenders like Together take a bespoke
While mainstream banks remain reluctant
to back smaller developers, specialist finance is
look at every case brought before them and look
stepping up. Yann Murciano, CEO at BLEND,
to support housebuilders wherever possible,” she
notes: “Mainstream banks have become
explains.
increasingly risk-averse, often focusing on larger
According to Neil Leitch, managing director of
development finance at Hampshire Trust Bank:
“The Government can set whatever target it likes,
but if there’s no real plan to support the people
building the homes, it’s just a number on a press
housebuilders with established track records and
significant capital reserves. This has left many
SME developers struggling to secure the funding
they need to bring their projects to life.”
Unlike traditional lenders, specialist finance
release. We’ve heard this before – big housing
providers take a more flexible, project-focused
targets, big promises, and not enough being done
approach.
to make them a reality.”
While large housebuilders will, of course, play
“We assess the viability of a scheme based on
its merits rather than applying rigid lending
a role, the market needs greater financial backing
criteria,” Murciano explains. “This means we can
for a broader range of developers.
support smaller developers working on new-
Leitch adds: “Specialist finance is critical
because we look at a project for what it is, not just
how neatly it fits into a bank’s risk model. If a
scheme is viable, run by an experienced developer,
build projects, conversions, and refurbishments
– especially in areas where there is strong local
demand for housing.”
Elmaz echoes this sentiment, stressing that
p
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