Our new Regional Director, Ben Jenkinson discussed with Bridging & Commercial where SME housebuilders can get support to grow faster, the sheer challenge of quantifying carbon emissions from new homes, and the increasing demand for its offering.
‘The idea of increased deal leverage and an improved credit profile can seem paradoxical’
The article below was included in Bridging & Commercial’s March / April edition.
Ben joined the business in 2022, having spent the previous four years in senior roles at Homes England, where he helped deliver more than £2bn of development finance joint ventures alongside private and public sector partners. He has worked in the real estate finance market for 20 years and, in his new role, will be forming alliances with lenders to combine sales guarantees and development debt to harness the potential for SMEs to build more homes.
How does being part of Landmark Group bolster your offering and expertise in the specialist finance space?
Landmark Group has been established for 22 years and is both stable and profitable. It now has a core investment portfolio approaching £200m. We’ve got great relationships across the property market and a reputation for simplicity, pragmatism and reliability—guiding principles that we are applying as we scale LDS and form connections with a wider cross section of the market.
What is the biggest misconception of a Sales Guarantee?
Because the offering is relatively new, at first glance, people tend to interpret it in different ways. There’s a little bit of, “This sounds too good to be true”, which we can understand as, from a lender’s perspective, the idea of increased deal leverage and an improved credit profile can seem paradoxical. It is therefore important for us to communicate the mechanics and credibility of the product in simple and straightforward terms.
How many proposals do you expect to supply in 2022?
As of 28th March, we have issued over £750m of Sales Guarantee proposals this year. Our live pipeline is approaching £1bn, meaning that we expect to enable the development of new housing worth hundreds of millions of pounds in 2022.
How else can the country help unlock SME housebuilding?
While the development finance market is presently strong and competitive, SME builders and new entrants can still have a tough time securing sufficient support. This is a problem, since it is these SMEs that can go on to become the larger developers of the future. More must be done in this space to reap the rewards of a diverse and robust housing market. Honourable mentions here go to my former employer Homes England for its partnership with Invest & Fund, which was specifically designed to allow the government to support micro and smaller builders with access to competitive finance, and to Close Brothers for its Tomorrow’s Developer initiative, which will equip new entrants with the skills and networks necessary to allow them to grow quicker. Along similar lines, we’ve reduced our minimum site size to five homes, enabling us to support a larger range of SMEs. We will also shortly be launching an interactive online platform, LDS Boost, which will provide a compendium of free industry contacts and resources to benefit all our partners.
How will you be looking to stimulate sustainable development going forward?
Our growth trajectory is such that we will support the building of potentially thousands of new homes over the coming years. The benefits that this will create are manifold, but we do recognise the significant impact that building has on the environment. So, we want to encourage the industry to build cognisant of both embodied and operational carbon emissions. We believe that simply offering nominal financial incentives for more environmentally efficient buildings, for example, does not fully [fix] the problem. I can’t say too much more at this stage, other than watch this space!
What are the biggest hurdles and opportunities in property development this year?
Rising labour and material costs are already causing challenges, with this dynamic not likely to ease in the near term. In a buoyant sales market, this may not inhibit supply, but if it does soften—and it is hard to argue that we’re not now at the later end of a property cycle—this will certainly impact housing supply in the absence of intervention. Another key obstacle is that the industry currently cannot adequately quantify carbon emissions from new homes, and measurement is an essential precursor to mitigation. With this comes opportunity however, and it’s clear that the market is starting to focus on the quality of new homes being built and funded, as well as the quantity. Solutions are on the way!
How did you spend your very first pay cheque?
My first paid employment was working in my grandad’s garden every Saturday morning when I was about 12. I saved up for what seemed like ages until I was able to by a stereo system.
Most memorable moment from your time in the industry?
Being coached by Professor Damian Hughes a few years ago. I’m really interested in sports psychology and high-performance cultures, and he is world-leading in this field. It’s no exaggeration to say that the learnings and feedback I got from him influence my approach every single day.
Your dream job—if you weren’t doing this, what would you be doing?
Playing football, specifically centre forward for England. I’m nearly 43, but I haven’t yet given up hope of a call from Gareth…
Click here for Bridging & Commercial’s full March / April edition.
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