Steve Larkin, Director of Development Finance

Steve Larkin, Director of Development Finance

This interview was originally published in Commercial Reporter.

LendInvest recently dropped the exit fee from its development finance products – why was this?

We have big plans for development finance at LendInvest. We want to be the first choice for small-scale developers up and down the country, offering the most competitive pricing and an outstanding service.

We have got off to a good start, writing 14 development deals ranging from £400k to £10 million in our first few months. But we want to make our loans even more attractive, and dropping the exit fee was an obvious way to do that.

You’ve said that you’re committed to helping smaller-scale developers; why do you feel this is so important?

Small-scale developers have a huge role to play in addressing the housing shortage that we are currently suffering from in the UK. The Government wants to see one million new homes built by 2020, but we are currently miles off that target.

Over the last few years, it has not been cost effective for the more traditional high street lenders to work with small-scale developers. As a result accessing the finance they require has been difficult. We want to address that funding gap and work with quality, experienced developers who know what they are doing, have exciting projects in prospect, and need a fast and efficient service from their lender.

What do you think will be the biggest drivers for change in the development market in the next 12 months?

Planning is a big one. It’s so important that viable land is unlocked for developers, so that we can start addressing the housing shortage in the UK. Local planning councils have a big role to play here.

The Government is taking steps to help too, by opening up public sector land. For example, it is looking to convert the land around railway stations into up to 10,000 new properties in the coming years. We hope that some of that land is earmarked for the small-to-mid-sized developers in order that they can build their product and enhance their reputation in this market.
The role of the alternative lender will also be an important feature of the development finance market during this period. According to the CBRE, alternative lenders account for 13% of the market already, and that will undoubtedly grow.

Do you think the planning process is still an issue for developers, and if so what do you think needs to change?

The planning process could certainly be a little quicker and easier to manage. At the moment it can take up to three months to get the approval through, which is a long time for the smaller developers to wait.

It would be welcome if planning authorities took a more collaborative approach with developers. This would help all parties, and result in developers getting on site quicker.

What headline would you like to see about financial services?

LendInvest named No.1 choice for small-to-mid-sized developers”.