Property funding: What’s new for 2022?
2021 was very much a year of getting back to ‘business as usual’ in the property funding market albeit it does not take an expert to conclude that the most favored sectors remained as residential and industrial.
Funder competition across residential development heated up and we saw a number of lenders sharpen their pencils on pricing and LTVs together with the launch of new partnerships like United Trust Bank’s Housing Accelerator Fund with Homes England.
Development lenders have strong growth aspirations as we head into 2022. Perhaps some of the below options / initiatives will be of interest to developers as they bring forward schemes this year:
- Green development initiatives with Nil Arrangement Exit fees for High EPC schemes
- Recovery Loan Scheme funding to top up to 70% GDV funding for apartment developments
- Sales Guarantee scheme which underwrites sales whilst providing upfront cashflow benefits via a 10% deposit
- Larger scale development funding options (£5M+ debt) from 5% margin + Sonia at 65% GDV with Mezz options (£2.5m+ debt) up to 90% LTC / 70-75% GDv
- 100% funded JV options (land and build) for housing schemes which show a strong profit line but where developer cash is tied up.
In the short term lending /bridging market yet again we saw several new entrants in 2021 and after the usual year end staff moves the marketing machines will now be in full swing. Given the time critical nature of this market certainty of funding must be the key consideration.
PMJ Capital Ltd, Cowgills’ sister short term lending business saw continued growth having lent over £36M across a variety of schemes in 2021 and are ready to go for 2022!
If you wish to discuss funding for your next project, please get in touch.
Article by Cowgills
Author David Rainford
david.rainford@cowgills.co.uk
01204 414 243
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