As lockdown restrictions ease, property developers, investors and professionals are seeing lenders and new opportunities return to the market.
With a continued lack of supply and ever increasing demand for stock, there is still a requirement to build quality housing stock as buyers come back into the market.
Now is the time to strategise and prepare for any new market opportunities.
Whether the site or property has potential- for planning gain, to carve up or title split or simply an option completion date is upon you – the opportunity can be supported by bridging finance until you are ready to progress the scheme or exit.
A bridging loan may be used for a simple case of site enablement, or that the contractors are not yet appointed. Acquisition bridges, with terms up to 18 months, can also give you the valuable time to work with planners, tackle pre-commencement conditions or parcel up a viable site. It may also be a period where you are deciding on strategy to trade the land to crystallise a return, or begin construction.
In the current climate, you will need a lender willing to understand your requirements and the related risks, much like a joint partner.
We have demonstrated this over the last few months by taking the lead in the market to offer higher LTVs at 75% for residential and 65% for commercial and land.
While there is an element of caution in the marketplace, this shouldn’t put property investors off using their existing assets to raise capital and acquire their next projects. Afterall, the market turbulence breeds opportunity.
Capital raising and refinancing gives support to changes in strategy and the repositioning of development-led businesses; if, for example, you do not wish to take on construction risk at this stage, you can refinance to focus on further planning enhancements or land carve outs before trading the land or reassessing the market.
Alternatively, if the lockdown imparied your ability to sell the completed stock, you can refinance on to Development Exit, securing your finances while waiting to sell and also raising capital for, say, acquiring your next project.
Building for the future
It feels like a long time ago, but before the full force of Covid-19 hit the country the Chancellor, Rishi Sunak, announced huge investment in home construction and a review of the planning system to help overcome Britain’s long-established housing crisis.
The housing crisis has not gone away as a result of the lockdown, and early indications from agents and property portals have shown a sharp hockey-stick curve whilst the restrictions have been eased.
This reinforces that for the UK, increased homebuilding is a necessity not a want, and that the UK market will continue to be one of the most resilient in the world today.