If nothing else the last year and a half has shown us that frankly anything can happen - and not necessarily in a good way!
Markets in turmoil, political institutions undermined, media scaremongering, crisis upon crisis and an overwhelming feeling of impending doom has affected us all. Whether in our homes, afraid to put the heating on, or at work, afraid for our futures the sense of uncertainty that has permiated our country over the last few years has been unlike anything us Brits have faced in generations.
But, of course, life must go on and the world of specialist Real Estate finance is no different, with lenders reacting in different ways to the events that have unfolded and the volatile predictions ahead.
A rapid change in the fiscal landscape demands a different approach to what has been over the last few years (Pandemic aside) a playground for speculative investments with virtually zero interest rates and a recovering, bouyant economy. Greater discussion, consideration and advise around a Developers future plans and needs that takes into consideration their entire financial position and looks at all possible routes forwards not just the potential finance of any single scheme is paramount to success.
There has over the last year or more been a sense of hesitancy and prevarication in the air both with lenders and developers.
There is a need for a more considered, consultative and engaged approach when considering using a broker to help find the right development finance than ever before. So here are just some of the reasons why a good broker is essential when dealing with a development finance loan.
Over 350 specialist Property Lenders in the UK - A good broker is a specialist and knows the market!
This is the wild west of lending. Every day we see new lenders in the market. Private High Net Worth money looking for a return. Institutional lenders expanding product lines, Family Offices marketing their funds into the property space for the first time - and others. But:
Which of these can be trusted to get a deal done.
What are they comfortable with?
What is their track record?
Who to avoid?
Who will be fast? Who will be slow?
Who will be flexible? Who will throw your case out at the first hint of complexity?
Development Finance is Complicated!
It shouldn't be, but banks and other lenders have an ever increasing level of due diligence for a borrower to contend with. There are a number of factors that need to be taken into account, and if even one element is not up to scratch then it could jeopardise the chances of your application being approved.
No two lenders are the same
One of the main complications with property development finance is that each lender has different criteria on which they base their lending decisions. This means that you could have two identical applications, but one might be approved while the other is not. It can be very difficult to keep track of all the different lender criteria. This is compounded by the fact that lender A may simply not lend to you and Lender B will. Not going to the right lender in the first place can be costly in every way... that is a good brokers job!
A hugely competititive marketplace
As I have said there are hundreds of specialist lenders in the market. But i really cannot labour this point enough. The good old days of picking up the phone (or a glass or 3 of claret), talking your high street bank manager through your scheme and sealing the deal with a handshake are long gone. Every aspect of you, your cmpany, your scheme has to be assessed with the right lender in mind or your finance is likely to fall flat on its face - often after months of working on it...
Conclusion:
Consultation NOT introduction
A good broker will work with you. They will understand your scheme. They will visit the site. They will work on your costings with you and consult from a lenders perspective. They will be there for your valuation and for your Monitoring Surveyors visit. They will be there through your first and all subsequent drawdowns if required. They will be there to advise on your exit from the loan well before the end of term.. They are your partner, circumspect with your information and expert in their field. They are not a random introducer who throws your details around like confetti at a wedding
Securing funding for your project is no easy feat.
If you're considering a property development project, make sure you use an experienced, recommended broker to increase your chances of success.
We would love to help and it costs nothing to have a chat so please do get in contact to discuss any projects you may have in the pipeline and we would be delighted to let you know what options are out there
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