The world was moving along nicely, when in 2020 the dark cloud which is COVID-19 emerged over Britain and, like a wrecking ball, demolished much about the way we live our lives. Property finance firm Goldcrest looks at the role finance can play in developments.
After decades of building smaller homes for city dwellers, we are now being told that people want to live further into the suburbs/rural communities, moving from urban apartment developments into bigger houses with home offices and garden space being the new ‘buzz’ phrases that every Estate Agent talks about.
For developers then, this should mean more demand, bigger profits and easier sales? However, as COVID-19 has taught us, life is never so simple, and, like opportunity, challenges always lie around the next corner.
Shortages, resulting in rising material and labour prices, are making it difficult to accurately budget, and also to keep to programme. It’s a tough job.
Housebuilding at its core is a simple exercise:
- Purchase materials and employ labour
- Build the property
- Sell
The one crucial factor that many seem to overlook is that the ‘building works’ can only be done with money. Money to purchase the materials, and money to pay the labour. Given income only typically comes right at the end as the sales come in, it means that the vast majority of housebuilders require finance.
Development finance used to be the business of the banks. However, since the Financial Crisis, banks have largely pulled out of development finance other than for either the large regional/national housebuilders, or long established clients.
It has therefore fallen to the secondary banks and specialist finance houses to fund the large number of excellent, local builders building the small schemes (1-30 properties), providing the core of British homes.
We are a specialist finance house, established back in the 1990s, and funding through the boom and bust cycles since. We’re still here, and keen to lend you the money to build your scheme, and hopefully the ones following too.
A personal team, where you can pick up the phone to our office, and speak to the same people each time, who understand your project, and not a random operator in a random call centre.
We understand the markets you’re working in – the housing market and the construction market – are tough and move quickly. Our in-house building surveyor visits our clients’ sites, as they require drawdowns, keen to offer help if needed, and crucially, to quickly certify the completed works and approve the drawdowns to keep your business liquid – in turn, keeping the construction, hopefully progressing as smoothly as possible.
Problems are inevitable; solutions are what really makes the difference though, and we hope to be able to help with those if you require any help in finding them.
Why not send your development details across to us at propertydeals@goldcrestfinance.com and see if we can help.
