Two thirds of brokers expect rising demand in development finance
Two thirds of finance brokers expect demand from housebuilders for development funding to increase in 2017, United Trust Bank’s broker sentiment survey suggests.
The report, carried out in January, found that 69% of brokers believe that demand for development finance from housebuilders will increase in 2017, whilst a further 27% expect to roughly stay the same.
Noel Meredith, executive director of the United Trust Bank, said: “Based on our own start to the year, I’d have to agree with a majority of development finance brokers that there’s no shortage of demand for funding for new housing projects.
“We are confident that although there will be uncertainty over Brexit and the longer-term health of the UK economy, the fundamentals which underpin the property market persist.”
Some 63% of brokers working in fields including asset finance and bridging felt that the government was not doing enough to tackle the UK’s housing shortage.
Just 14% of finance brokers were confident that the housing shortage would be overcome by 2020 by the government.
In addition, 74% of brokers described a positive outlook for their own businesses over the coming year with nearly a third (31%) predicting that the UK economy would grow beyond expectations.
Meredith added: “Demand for affordable starter and standard family homes is strong in most parts of the country and this is still translating into price growth in most regions.
“Although developers must keep a tight rein on rising costs for materials and labour, those presenting sound proposals to build the homes people want and can afford to buy will find lenders like UTB happy to provide the funding.
“I do however share many brokers’ concerns about the government’s ability to overcome the housing shortage by 2020.
“Although some of the recommendations in the recent Housing White Paper offer some hope of improvement to the dysfunctional planning process, any significant change will probably come too late to meet the ambitious targets.”