I am sure that any property developer would agree that picking your professional team, whether this be your Planning Consultant, Architect or Project Manager is critical to the success of a project and the ability to maximise profit through optimum design and massing and ensuring build costs represent value for money.
Funding is no different and the wrong choice of lender can equally be costly – processes can become protracted and time consuming, there is an inability for the lender to be flexible / commercial in its decision making and ‘In Principle terms’ and even ‘Offers’ can change or even be withdrawn at the last minute.
As we continue to adjust to the post Truss interest rate regime and elements of uncertainty in the economy getting the correct advice is more important than ever before. Navigating the myriad of development lenders is more challenging – criteria and appetite will vary as indeed will pricing but the risks of being drawn by a headline rate and what often ends up in a ‘difference of opinion’ between sales at the expense of losing a deal needs to be of paramount focus as will credentials of the lender.
The general market sentiment is that lenders remain positively pre-disposed to development funding but are focusing on those schemes which are backed by a balanced and credible proposal. This is where an experienced broker earns their fees both in assisting with the proposal, supported by as much relevant detail as required, and advising on the correct lender(s) for the scheme.
My firm opinion is that a knowledgeable broker should:
- Add value to any presentation and take time in getting this right – a few lines on an email will illicit the same rushed response from a funder and any indication will simply be that and so heavily caveated it is not worth the paper it is written on.
- Be able to draw on their prior experience of a funder and their track record on delivery – if they don’t know the funder that is a risk.
- Be capable of interrogating and challenging the information presented to them, as indeed the lender will. 30+ years in banking and property finance have taught me to look at all applications from a lenders perspective and to present a ‘warts and all’ picture based on facts given it is far easier to mitigate issues at the outset rather than back tracking later.
- Not focus just on price in their assessment and recommendations – a cheap funding offer which is not deliverable is no good to anyone.
- Be honest and transparent throughout the process.
In summary
No two property developments are ever the same. There will be different timescales, different challenges and different financial requirements for each and deciding which product and provider is most appropriate for your circumstances can be bewildering and preparing the application can be complicated.
A well-presented application with the correct supporting information, pitched at the right level to a carefully targeted lender is essential and will maximise a developer’s chance of getting a firm offer within weeks rather than months.
David understands the need to secure the best deal when it comes to property development finance and is highly experienced in presenting to lenders on behalf of his clients and assisting in selecting the best provider.
For assistance or advice regarding securing property funding contact David Rainford at Cowgills on 01204 414243 / 07794490682 or email David.Rainford@cowgills.co.uk
Disclaimer
The information was correct at time of publishing but may now be out of date.
