The survey carried out by United Trust Bank found that 28% of brokers had seen a decrease in the availability of development funding this year with a third (33%) seeing no change.
Over half of the brokers felt that the availability of development finance would be a key factor in the success of the construction industry over the next three years.
Noel Meredith, Director at United Trust Bank, said:
“It’s encouraging to see that most brokers are experiencing an increased demand for development finance which may signal that developers are gaining confidence in the market and are looking to increase activity. The availability of development finance still seems to be an issue however with most brokers seeing no change or even a reduction in lender’s appetites to offer funds for building projects.
"We continue to experience a high level of enquiries and are taking forward an increasing number of quality proposals. These are mainly for family housing in affluent areas where the market remains reasonably active.
“Whilst it’s vital that developers are able to gain access to funds to allow them to build it is equally important that there are buyers ready and able to purchase the end product. Initiatives to boost the supply of new homes will not, on their own reinvigorate the property market. For the property market to really start moving again younger people, first and second time buyers need access to mortgages requiring realistic deposits.
"It is not reasonable to expect potential new homeowners to be able to save 20-25% when their finances are already stretched by high rents and the rising cost of living. The market in many areas will only start to recover when 85 – 90% mortgages are commonly available at reasonable rates. The irony being that in most cases it is cheaper to pay a mortgage than to rent but deposit requirements are keeping people out of the market.”
