© JD8 / Adobe Stock

With the Labour government set to overhaul planning regulations in order to pave the way for delivery on its ambitious housing targets, property development is expected to accelerate over the coming months and years. With this, developer demand for flexible short-term property finance is going to increase. As such, Excellion Capital,  the boutique debt advisory and investment firm, has released a comprehensive expert analysis of the UK’s bridging loan market—offering clarity for investors seeking the right funding solution for their specific needs.

What is a bridging loan?

Bridging loans are a valuable tool for property investors and developers who need fast, temporary access to capital. They are short-term loans used to bridge the gap between two financial transactions. Example uses include purchasing one property before selling another, or funding the refurbishment of a property in order to then sell it.

But selecting the right bridging product is essential because loan types differ significantly based on property use, borrower profile, and a lender’s tolerance for risk. Below, Excellion Capital outlines the the products available to investors depending on their precise requirements,

1. Bridge to Let

A bridge-to-let loan is designed for property investors or landlords who intend to refinance onto a buy-to-let (BTL) mortgage once certain conditions are met. Initial bridging finance is provided to allow the investor to purchase a property quickly – often one that wouldn’t qualify for a traditional BTL mortgage at the outset..

Once the property is renovated, let, or meets lending criteria, the borrower can transition to a long-term buy-to-let mortgage. As such, the exit strategy from the bridging loan is the BTL mortgage refinance, rather than a sale of the property.

The key benefits is the ability for investors to quickly unlock future rental income potential

2. Bridge to Development

Ideal when an investor needs to secure land or property prior to obtaining full development finance. It effectively bridges the gap between acquisition and development, thus giving developers time to arrange planning permission, detailed costs, and satisfy lender requirements for full development funding.

Such loans are intended to work on a short timeline of 3-12 months, are secured against the site or property, and the exit usually comes via development finance.

3. Second Charge Equity Release

A second charge bridging loan is taken out when an existing primary loan, such as a mortgage,  already exists on an asset. It is secured against the existing equity in a property, and the lender takes second priority behind the senior, or primary, lender when it comes to repayment. This type of loan allows property owners to unlock equity without selling the asset, remortgaging, or interfering with their primary loan. This equity can be used to finance another acquisition.  However, it is important that the senior lender agrees to the loan.

4. Development Exit Bridge

Designed to enable property developers to exit development finance once a project has reached practical completion but before the property has been sold or let. Usually more affordable than full development finance, in essence it gives the developer time to market the completed property and thus make their full exit or start generating income against which they can take out further, more suitable financing.

5. Refurb Bridge

Used to finance property renovations – either light (non-structural upgrades such as kitchens or bathrooms) or heavy refurbishment (structural work, extensions, or change of use) – and enable investors to add value to and reposition assets for resale  or refinance. Lenders don’t usually have to monitor Refurb loans too closely.  Essentially, these loans enable an investor to increase the value or mortgageability of an asset before seeking further financing or, of course, selling.

6. Acquisition Bridge

Used to acquire a property quickly with the intention of moving onto long-term investment finance (such as a buy-to-let or commercial investment mortgage) once it has better mortgageability or is ready to be let.

Such a loan is ideal for investors, landlords, and commercial buyers who need speed or flexibility at the point of purchase but then plan exit onto investment finance which will enable them to keep the property for rental income or other forms of long-term income.

7. Auction Finance Bridge

When a property is purchased at auction, the buyer typically has 28 days with which to pay the agreed price. Auction finance bridging loans are specifically designed to help buyers honour this tight deadline which can otherwise be impractical through a more  traditional mortgage. The loan is usually repaid through the mortgage eventually gained.

Robert Sadler, Vice President of Real Estate at Excellion Capital, commented:

“With planning reform on the horizon and demand for new housing set to rise, developers are increasingly seeking flexible funding options that match the pace and complexity of their projects. Bridging finance is not one-size-fits-all. The key to successful property investment lies in choosing the right loan structure to match your objectives. In terms of pricing, investors can expect rates starting at 0.70% per month and up to 0.80% LTV. At Excellion Capital, we work closely with our clients to understand the nuances of each deal—whether that’s securing land pre-planning, funding a heavy refurbishment, or bridging to a long-term investment loan. Each bridging product serves a specific purpose, and selecting the wrong one can compromise timelines, profitability, or refinancing potential. Our role is to cut through the complexity and structure the most efficient, cost-effective solution—ensuring that our clients move quickly without sacrificing strategic foresight.”

For more information on Excellion Capital click here.

The post Which bridging loan do you need? appeared first on PHPD Online.

Mike Burton, Director of Hampshire-based housebuilder Metis Homes, has commented in advance of this week’s 2023 Spring Budget by the Chancellor Jeremy Hunt.

Housebuilding
“More support is desperately needed for the housebuilding industry to enable us to build more homes, so it is disappointing to not see this being tabled, ahead of Wednesday’s Spring Budget.  Simon Clarke, former housing minister, reportedly said that every 100,000 homes built in the UK adds 1% to GDP, so the importance of increasing housebuilding output to aid economic recovery and growth is obvious at a time when the UK needs all the help it can get.

“The Home Builders Federation (HBF) recently reported that housebuilding rates are set to fall to their lowest level in decades, due in a large part to planning policy changes and the impacts of government department intervention on environmental grounds. 93% of SME developers said that planning was the most significant barrier to growth, and I couldn’t agree more. This is an area which requires urgent focus from Ministers to both benefit the economy and ensure that appropriate housing for generations to come is delivered.”

Energy Bills Support & New Builds
“As energy prices have a real impact on all households and businesses, the decision to extend the Energy Bills Support Scheme would be welcome in providing further certainty. Energy costs have a significant financial impact on housebuilding, from premises, raw materials, and the production of new homes, to the costs for our labour force and our buyers. Over the past 12 months, energy price hikes have raised awareness of the benefits of buying a highly sustainable energy efficient new home, which has been an unintended positive for the industry. It would be good to see this promoted more by the government.”

Fuel Duty Cuts
“At a time when costs are still a challenge for many, any continuation of control over fuel prices is welcomed, even if it’s only avoiding an increase rather than providing a saving. Fuel costs affect all elements of the housebuilding lifecycle – the cost of running plant and machinery, deliveries to site, the cost of manufacturers’ raw materials, the site’s labour force commuting costs, and the impact of rising costs on our customers and how this may affect their ability to purchase a house. This inherently increases construction cost and can reduce the pool of new homes buyers. Any financial help here would be well received by the housebuilding industry.”

Corporation Tax Rise
“At a time when economic growth should be a core objective of the government, continuing with the proposed raise in corporation tax will only stifle economic growth, as well as making the UK a less attractive business environment from a global perspective. Where there is normally reliable profitability, the housebuilding industry is seeing this projected to fall this year, as a result of the economy’s current state. The government’s ongoing changes to planning policy and environmental issues – and then taxing businesses at a higher rate – will only further impact investor sentiment and the amount of capital available to reinvest.”

Super Deduction Axed
“The UK economy is in a global marketplace for investment, however we are in an unsettling position. Having only just staved off entering into a recession at the end of last year – we must ensure we are a comparative investment proposition to other countries. The removal of investment incentives does the direct opposite of this and by cutting the super-deduction, it will discourage reinvestment. It is vitally important that it is replaced by a new scheme which can continue to attract and incentivise investment at such a critical point in the economic cycle.”

Getting long term sick back to work
“Absence because of long-term sickness is an area that all employers must deal with in a careful and respectful manner to ensure that employees’ needs are looked after, first and foremost. The idea of changing the system to allow people to work with more support, rather than being signed off must be managed on a case-by-case basis. One rule for all simply won’t work in practicality and may even become more challenging for employers and employees. Providing employers with a greater breadth of options to make sure that the needs of the employee can be met whilst also ensuring that economic productivity is improved is the key and should be the focus of the government’s policies.”

The post Metis Homes comments ahead of the Spring Budget 2023 appeared first on PHPD Online.

Speaking ahead of Jeremy Hunt’s Spring Budget announcement, Paul Sams, Partner and Head of Property for Dutton Gregory Solicitors, said:

“We very much doubt this will be a Spring Budget to remember, but hopefully it’s not one full of missed opportunities. There are three simple initiatives that could have a transformative impact on the UK’s property sector, with every new transaction pumping circa £10,000 into the wider economy.

“As Help to Buy was self-funding, it should be reintroduced. The tightening of the original Help to Buy criteria – which was open to first timer buyers, as well as existing homeowners until two years ago – was a sensible change. The scrapping of Help to Buy entirely has made no sense. First time buyers are now scarcer than we have ever seen, so there is a danger of a generation of young people being denied accessible homebuying opportunities. Prior to a decade of Help to Buy, there was Home Buy Direct and First Buy, so how is it right that there is no longer a government initiative to make home ownership a possibility for those without a substantial deposit?

“If we want to see the UK’s homes become far more energy efficient, landlords need to be incentivised to make the investment into retrofitting eco-friendly technologies into their buy to let properties. There are some grants available, but the uptake is very low because of the complexity and red tape. A largescale residential property upgrade scheme could be rolled out, mirroring the simplicity of the 2020 furlough system. By seizing the opportunity to see millions of homes upgraded to an EPC-C performance, the Chancellor could deliver a very welcome shot in the arm to the property, construction, and manufacturing sectors, while also reducing the energy bills and carbon footprint of renters.   

“The climate of demonising buy to let landlords should also end. Modernising and upgrading buy to let properties has been far more scarce in the three years since landlords stopped receiving interest tax relief on their mortgage expenses. This is not beneficial to the wider economy.

“Our property conveyancing team has just received the highest number of weekly new instructions of the year. This number even exceeds March 2022, when the housing market appeared to be more buoyant. The media hype about a property downturn has now been proven to have been blown out of proportion. Now is the time for the Chancellor to reintroduce some much-needed levelling up and help vying first time buyers in the way that nearly 300,000 before them were given assistance to become homeowners.”   

Hampshire-headquartered Dutton Gregory Solicitors is a full-service legal firm for private and corporate clients. The multi-award-winning practice has offices in Bournemouth, Chandler’s Ford, Poole, London, and Winchester, with a new office launching in Liverpool.

The post Dutton Gregory Solicitors on what they’d like to see from the 2023 Spring Budget appeared first on PHPD Online.

Speaking ahead of Jeremy Hunt’s Spring Budget announcement, James Dickens, Managing Director of Birmingham-based housebuilder Wavensmere Homes, said:

“We are bracing ourselves for a lacklustre Budget, but every individual and business operating in the UK needs to believe there might be light at the end of the tunnel. To stimulate the economy and create increased revenue for the Treasury, some existing initiatives should be extended, and new timely incentives are now required from the Chancellor.

“With the weakness of Sterling against the Euro, a cut – rather than the planned significant rise – to corporation tax would be advantageous, given the UK is a net importer. Wages are high and yet the productivity of the country’s workforce is lower than it was prior to Covid. Businesses need access to new initiatives to be able to remain competitive within the global marketplace.

“It makes no sense to go through with April’s proposed change to the energy price guarantee as it would disproportionately affect the lowest income households – many of which are already reliant on foodbanks.

“With mandatory housing targets scrapped, there is a significant reduction in the number of affordable homes coming onto the market. Above inflation rises in the cost of raw materials, and additional new costs facing housebuilders for environmental mitigation – which would be more appropriately directed at those using fertilisers – are also negatively affecting the supply of lower cost new homes.

“With the recent conclusion of Help to Buy, the only help first time buyers have is the current Stamp Duty exemption for homes valued up to £425,000. But with less homes being built, there has been a marked impact on the rental market. For every home available to rent, there can be as many as seven people vying to occupy it. It is no surprise we have therefore seen rent hikes of 24% for soon to be completed homes at our Belgrave Village scheme in central Birmingham, and similar increases of 22% at Nightingale Quarter in Derby City Centre, where the final phases of the £165m scheme are being matched with buyers. With the continued rise in the cost of living, hard working people are more trapped than ever as renters, because mortgage deposit payments are so hard to save for.

“While no one is expecting the Chancellor to announce an unexpected silver bullet, the fragility of the UK’s economy is in need of a timely boost.”     

Wavensmere Homes is constructing three major urban regeneration schemes, located in central Birmingham, Derby city centre, and Ipswich, and has further projects in the immediate pipeline. The Edgbaston-headquartered housebuilder has around 2,500 new homes either under construction or in planning.

The post Opinion | Why Jeremy Hunt Needs to Stimulate Growth – by Wavensmere Homes appeared first on PHPD Online.

With a clear need to encourage more women to consider careers in plumbing and heating, and a concerning skills gap to be filled, CEO of the Chartered Institute of Plumbing and Heating Engineering (CIPHE), Kevin Wellman, discusses the problem of gender inequality. 

This piece was written in collaboration with Gemma Williams.

Kevin Wellman

A recent Government report found that 95% of UK plumbers are male, suggesting a systemic issue within our industry that we have a duty to correct. While society is taking steps toward gender equality, the plumbing and heating industry still has much to do to become a viable and appealing option for women – especially those leaving school, in their early teens. We are currently experiencing a major skills shortage so it’s more important than ever that the industry broadens its horizons.

Why do so few women join the industry?
Part of the problem is that young girls tend to be steered away from engineering. One study found that just one-third of girls between the ages of 11 and 19 perceive engineering as a desirable profession, compared with more than half of boys the same age. Data paints a picture of girls having a similar level of interest as boys, but that interest wains as they get older. At GCSE level, 48% of pupils in STEM subjects are girls, but by undergraduate level, that plummets to 16%, despite women being more likely to join higher education. Starting at school age, with careers advisors and teachers taking a leading role, it would benefit children and teens to be informed on the benefits of a future in engineering, while being given opportunities to explore the subject for themselves.

As an educational charity, the CIPHE has a duty to dedicate resources to this topic and, as such, we support schools and colleges across the UK and provide resources for apprentices and college students. We are currently working with schools in Birmingham to introduce pupils to plumbing, heating and renewables and support greater funding for the Plumbing and Domestic Heating Technician apprenticeship. Recently we announced that we are providing education resources in partnership with the Multiply project, aimed at improving maths and numeracy in the UK. More must be done, however, if gender parity is going to be achieved and if we are to bridge the current skills gap.

The future of plumbing and heating
It is key that young people of any gender are educated on the potential that plumbing and heating engineering has for them and their future. It must be made common knowledge that university is not the only path to a successful and profitable career, and that a variety of pathways into plumbing and heating, including paid apprenticeships are available. If we are able to increase the esteem of our industry in the eyes of young people, and especially girls, we will soon see the benefits that gender diversity has to offer heating and plumbing.

One woman who is having a positive impact on the plumbing and heating industry is Emma Wray EngTech MCIPHE RP. Emma has faced many challenges as a woman in engineering but continues to work hard to cement her success in the water industry. In September 2018, she was named Installer’s Apprentice of the Month and is now a water regulations inspector for Yorkshire Water. She presents seminars to plumbing students and to engineers so they can better understand what water regulations are and why it is so important to comply with them. Visible role models will play a critical part in encouraging more women and girls into careers in the plumbing and heating industry and all of us at the CIPHE applaud Emma’s  dedication to her chosen career and the impact she is having.

The post Tackling gender inequality in the plumbing and heating industry appeared first on PHPD Online.

With a record 1.2million households currently on waiting lists for social housing, Dorset-based affordable housing specialist AJC Group fears rural communities will be starved of much-needed affordable homes.

The latest available industry reports state that fewer than 4,500 social homes were built in 2019-20, but there were over 250,000 people on a housing waiting list in rural areas by 2020. Across the entire UK, only 157,000 of the Government’s own target of 180,000 affordable homes were built during 2021. Homes England only distributed grants for 6,250 rural homes – half the number required under the policy.

David Cracklen, Director of AJC Group, said: “With Michael Gove’s recent amendment to the Levelling Up and Regeneration Bill scrapping mandatory housing targets, a huge population of people in rural areas will be forced to relocate away from their home town or village. Local authorities and communities will now be able to determine how many homes might be built in their area, but the voices and needs of those on housing waiting lists are unlikely to be considered.

“Even when there were mandatory housing targets, a high proportion of planning applications for new homes went to appeal, even for designated and allocated sites. The costly appeal process typically delays a development start by at least 12 months. However, planning barristers’ success rates have been relatively high because housing targets were in place and a non-NIMBY approach to determining planning applications could be applied. Without clear housing targets, I fear rural development will become scarcer than we’ve ever known in our lifetimes.”

AJC Group is currently concluding the construction programme at a development of 21 houses in the rural Dorset village of Hazelbury Bryan. Located off Pidney Green, the nearest small town of Sturminster Newton is nearly five miles away. The terms of the S.106 for AJC Group’s planning permission required a 40% affordable housing allocation, however in line with the company’s social and corporate strategy, the site has been delivered in partnership with Abri Housing Association as a 100% affordable scheme.

AJC Group has applied the same scenario to its development of 27 homes in Okeford Fitzpaine, which is another rural village in Dorset. The company is delivering the 100% affordable scheme for Aster Communities, despite the planning conditions stipulating a requirement for only 11 affordable dwellings.

David Cracklen continued: “Jeremy Hunt’s announcement of a below inflation 7% rent cap for the social rent sector will hopefully not stifle growth at a critical point for this sector, but the disastrous planning policy change will. The UK’s broken planning system – and the prolonged debacle to determine phosphates, nitrates, and nutrient neutrality – means green lights for new development has already been few and far between for some time.

“For developers such as us who do have live sites, the cost of delivering much-needed EPC-A and B rated homes has sky-rocketed. We are currently delivering a total of 230 homes at seven sites across the Wessex region. The cost of labour, materials, plant, and machinery is incomparable to the original budget forecasts. With the planning system in crisis, and affordable homes completions already falling far short of demand, how can the industry strive towards delivering the new homes the UK desperately needs?”

AJC Group works in partnership with Registered Providers, Local Authorities, and charities. The multi-award-winning company will shortly be under construction with 300 much-needed mixed-tenure homes, becoming the leading affordable housing contractor in the Wessex region.

The post UK’s broken planning system will starve rural communities of affordable homes appeared first on PHPD Online.

Following the release of the ONS’ latest CPI data, Jatin Ondhia, CEO of FCA-regulated investment platform Shojin, gives his expert analysis.

Jatin Ondhia, CEO of Shojin said: “As inflation makes its second consecutive dip, investors will be hoping that this marks the start of a downward trend that could ease pressure on the Bank of England to press ahead with its tightening cycle.

“Yet caution must still surround today’s figures. Inflation continues to stand above 10% – an incredulous prospect barely a year ago. And while this is a step in the right direction, the path ahead is not easy to predict with so much dependent on global macroeconomic and geopolitical factors, not to mention the decisions made by the UK government which is still regaining market trust.

“As such, investors must proceed carefully, continuously re-evaluating their assets to ensure they have the pieces in place to protect their portfolios against market uncertainties. Undoubtedly, the diversification of assets will remain a paramount objective in order to achieve this. The rise of alternative investments demonstrates that for many investors this process has already begun.”

The post Shojin comment on ONS’ latest CPI data appeared first on PHPD Online.