How can developers best access the finance they need?

The latest RICS Construction and Infrastructure Market Survey shows that developers are struggling to gain access to suitable funding from banks, and as a consequence reporting issues with cash flow and liquidity. Financial constraints are reported by 78% of surveyors to be by far the most significant impediment to building. Since the last report 20% more respondents highlight a deterioration rather than improvement in access to finance.

The report also shows some areas of construction at a standstill but 20% of contributors report a rise in private housing workloads, the report shows.

With mainstream banks limiting their exposure to development finance, Positive Commercial finance have access to a much broader panel of lenders so we can help with a much wider range of funding needs.

Another reason to work with a specialist broker to help getting finance for a development is a recent report by the Building Cost Information Service (BCIS) and the Private Housing Construction Price Index (PHCPI), which states that house builders’ costs rose 3.9% in the year to 3Q 2018. In the latest quarter, 62% of contributors reported increases in costs and the responding contractors also stated that they expect their costs to continue to rise.

The reasons for the cost increases reported by individual house builders included bricklayers, blocks, timber and electrical works.

As costs of building materials and labour are on the rise, it’s vital for developers look at other parts of the project that can save them money. Development finance is a key part of this and by working with an expert broker such as Positive Commercial Finance, we can ensure that the very best rates and transaction structure are achieved that best match your project.

References:

https://www.rics.org/uk/news-insight/latest-news/news-opinion/housebuilders-costs-rising-steadily/

https://www.rics.org/uk/news-insight/latest-news/press-releases/uk-construction-and-infrastructure-survey-q42018/