"The problem for advisers and introducers with clients seeking such products is that this is a changeable marketplace and one that is often complex"
A quarterly comparison of the first three months of the year compared to the previous quarter in 2016 shows that development finance case enquiries were up by 72%.
First 4 Bridging says that the increase can be put down to a number of reasons, notably the tighter lending market in sectors such as buy-to-let.
F4B says enquiries for development finance now make up 16% of all those it receives, and in order to satisfy this increase in enquiries and applications has set up a dedicated development finance department.
The new department is focused on delivering the specialist support advisers and introducers seek for their clients, in a market which F4B describes as "inconsistent and complex".
Elliot Hyames, Head of Structured Finance at F4B, commented: “As far as F4B is concerned, 2017 has certainly been the year of growth within development finance, and it’s clear that developers are looking to make the most of their opportunities especially given the low level of housing supply that is coming to market. With that in mind, developers are seeking the right financing solutions which will enable them to develop multi-unit schemes whilst ensuring they are at the standard required in order to deliver them to market.
“We are now almost a year on from last year’s referendum, and even with the General Election on the horizon, interest in development finance remains incredibly high and is likely to be maintained whichever party forms the next Government. The problem for advisers and introducers with clients seeking such products is that this is a changeable marketplace and one that is often complex, especially when you are seeking to structure the deal in the right way.
“It’s also the case that development finance cases can be quite large– one recent deal we structured was in the region of £40m, and therefore advisers must ensure they get it right. This is why they come to specialists like ourselves as we have the relationships and the knowledge to source the right solution first time and execute it swiftly. The good news is that lender appetite is there for the right transaction but it must be packaged correctly and have the right fit. No two deals are the same and you can’t therefore use a uniform approach – instead you have to understand the client, the mechanics of the transaction and the funding opportunities that are suited to each case.
“Our new Development Finance department works in tandem with all elements of the development finance sector and we would therefore urge any adviser or introducer with a client in this area to contact us to see how we can make the deal work for them and, most importantly, add significant value to their business.”
