Blog

2nd August 2017

property development finance blog

Game of Loans: The Devil is in the Detail

As soon as I think we have reached the maximum number of development lenders in the market, there always seems to be another round of new and existing companies that start to offer development finance products. In fact, this is a positive thing for the industry as, in theory, more competition should benefit the customer with lower prices and better products.

However, we are always subject to the usual market externalities and uncertainties that arise from changes in British politics. We always have the very real possibility that inflation and interest rates will rise in the near future.

No Change To The Industry

Regardless of external economic factors, the practices and structures that we see in the development finance world remain largely unchanged. Every lender or funder has a different approach to funding development projects and they all have their strengths and weaknesses. The end result should always be to provide maximum liquidity for the developer to enable the smooth and successful running of their project.

Lenders still need to consider all the things that potentially go wrong with any property development project. The great thing about development funding is that there are a million and one things that could go wrong, from an increase in build costs to an ecological issue such as bats and newts on site. Being able to pay close attention to detail and allow for any contingencies is what separates the good lenders.

What we learn from The Big Short

I was recently on a long haul flight where I enjoyed watching The Big Short; a dramatized film starring Steve Carrell and Ryan Gosling of how the 2007 credit crunch was triggered by adverse mortgage lending the United States. There is a scene when, before all hell breaks loose, the officials start to investigate some of the sub-prime mortgages at the time by a very simple method: they went and looked at what was being lent on.

Whilst development funding is very different to a typical mortgage, the lending principles are still the same. All good lenders should look at what they are lending on, taking into account the opinion of our surveyors but also combining our own wealth of experience and knowledge. This has required me to go through suits at an alarming rate as I visit our development sites regularly and step in all kinds of mud and building material.

We see every site that we lend on; meet the client face-to-face and nothing gives you a better impression as a lender that seeing the project in the flesh. At Regentsmead we have developed a traffic light system of basic indicators to look out for on-site and ensure that the project is running smoothly. Of course, not everything will get picked up beforehand but a good development lender should at least have sensible practices in place such as these.

There is no one-size-fits-all when funding a development scheme but everything we have learnt and executed at Regentsmead is a product of the test of time. We have experienced various issues in the past, like any other lender, but this is the nature of property development funding. There is no alternative to having experience, something that we have had since 1934. I hope that our fellow development lenders can share the same sentiment. Detail is everything in our world.

15th May 2017

Game of Loans: How the general election may play a part in short-term development funding

It's good to know that we have a prime minister that is keeping everyone on their toes...

10th April 2017

Game of Loans: Do fintech firms risk depersonalising the borrowing experience?

We seem to live in an age where we are in so much of a rush that we feel the need to constantly shorten phrases into...

11th January 2017

Game of Loans: The future of development finance

I've always maintained that ground-up development finance is a world away from bridging loans. Whilst we as development finance lenders are...

5th December 2016

Game of Loans: Can the property market trump expectations?

It's been a good year for surprises: two unexpected results with the referendum and the recent US election, Leicester....

5th September 2016

Game of Loans: Butterfly effect

I had an interesting discussion with a counterpart from another lender recently about how some of the small facets of change....

6th June 2016

Game of Loans: Is the property market getting colder?

Being involved in funding a lot of development projects around the country means that we experience many different parts of the market...

2nd May 2016

Game of Loans: Londoners need to vote with caution

As we come to the end of Boris' tenure as Mayor of London, the capital is in a very different shape to where we were when he stepped in in 2008...

4th April 2016

Game of Loans: When permitted development isn't permitted

In terms of providing much needed housing stock, I think it's fair to say that permitted development (PD) has been a reasonable success...

7th March 2016

Game of Loans: Would Brexit be the wrong medicine for the housing market?

The only thing that seems certain about the upcoming in/out referendum is the amount of uncertainty on both sides. I've overheard many knowledgeable, well-to-do colleagues and...

1st February 2016

Game of Loans: The changing face of construction - what does this mean for lenders?

One of the main skill sets for development funders today should be an ability to understand various construction methods. Whether it's a traditional brick and block structure...

6th January 2016

Game of Loans: All to play for in 2016?

There's nothing like early January for setting unrealistic New Year's resolutions and letting them fall by the wayside once the cheer from late December has died down. So what can we expect for 2016...

2nd December 2015

Game of Loans: Is alternative funding alternative?

One thing that you will never forget is your mother's maiden name. For some reason, when dealing with large organisations, this is the 'go-to' question that proves you are who...

10th November 2015

Game of Loans: Can lenders keep innovating?

I was recently asked by a journalist whether I think that lenders in this sector can carry on innovating. In other words, have we reached our capacity in terms of product offerings...

7th October 2015

Game of Loans: More than one way to broker a development deal

At Regentsmead we have various channels in place to help support both our direct clients and, of course, our highly valued introducer partners. There's quite a large spectrum as to how a development project...

4th September 2015

Game of Loans: Sourcing the right project

There's a lot to be said for developers building up their land banks. This is quite pertinent for the large national housebuilding firms that regularly bank land and are able to sit on these assets, forcing the price up and creating...

5th August 2015

Property Development Finance - Game of Loans: Let your client see the whites of your eyes

In an increasingly digitalised world, most lenders would admit to being heavily reliant on technology in communicating with clients. Long gone are the days when your bank manager would ring you up and take you out to lunch...

8th July 2015

Property Development Finance - Game of Loans: Short term memory

An appetite to lend is a great thing. In 2015 we are seeing genuine hunger from lenders with clear lending parameters and competitive offerings which is certainly a far cry from the very recent recession. On the other side...

10th June 2015

Property Development Finance - Game of Loans: "Dealing with experience"

Since the property market has emerged from the dark recesses of 2008 we have seen an upturn in applications from clients or prospective property developers that in effect, aren't really property developers. Having watched a good...

21st May 2015

Development Finance in the news - Evening Standard pull-up Regentsmead on marketing campaign

It's not often that development finance is picked up in mainstream newspapers, however just the week the Evening Standard gave full coverage to our latest marketing campaign, featuring none other than Diana Ross...

30th April 2015

Property Development Funding – Funding a development on an Island

Regentsmead have recently completed funding on a very unique property. This new build development is featured on Rod Eyot Island, an island in Henley-on-Thames and the only access to the property is by boat...

17th April 2015

Property Development Funding – Celebrating 20 years with a client!

Being established for over 80 years, one of our most valued principles is our long term relationships with our property developers. 

One relationship that really brings this home is the fact that we have now dealt with one of our clients...

27th March 2015

Winning "Highly Commended" for Best Development Finance Provider at the Business MoneyFacts Awards 2015

Earlier this year we were delighted to be announced as one of the finalists for Best Development Finance provider at the annual Business MoneyFacts Awards and were looking forward to the event which was to be hosted...

16th March 2015

Broker Survey of the Property Development Finance Market

As a leading provider of development finance, we value our relationships with our brokers and introducers very much. To gain a greater understanding of the property development finance market...

4th March 2015

Development Finance - Knowledge is Power

Having been in business for over 80 years now, our ‘reputation' has allowed us to do high levels of repeat business, with many of our borrowers citing trust as the single most important factor when looking for a lender...

18th February 2015

Delighted to announce our new partnership with The Federations of Master Builder's

At Regentsmead we believe we have taken on a number of different strategies to directly tackle the issue of Britain's housing shortage head on. This week we are delighted to give further details of a new partnership with the...

5th February 2015

Property Development Finance Industry – Looking Into The Long Term

Following a recent survey amongst their borrowers which hints at a new found buoyancy in the market, as an award winning provider of development finance, we remain optimistic about the sector. The 2008 credit crunch paralysed...

26th January 2015

Joining forces with Metro Bank & looking forward at 2015

Property development finance is at the heart of what we do. To expand further we are now looking at developing strong relationships with exciting UK companies. At the end of last year we co-hosted a joint business networking...

19th January 2015

Property Development Finance - Why would a developer choose to pay more?

Quite often we hear that the best property development finance option is the best priced option. As a long established development lender, one of our mottoes at Regentsmead is that value for money is...

9th January 2015

Development Finance enables Judas Priest Star to Rock the Property World

Being a leading provider of residential property development finance in the UK, we are constantly looking for interesting property development projects to fund. Over our 80 year history we have funded thousands of building and construction projects...