83% of brokers say specialist lenders trump the High Street

83 per cent of brokers have condemned the use of high street lenders in development finance cases, according to recent research carried out by United Trust Bank.

The survey, which received 118 broker responses, showed that brokers will continue to use independent development finance lenders, even if the High Street Banks continue their current trend in relaxing lending criteria.

The survey also suggested that 41 per cent of development finance brokers believe that the sector is becoming easier to complete deals, partly owing to the recent growth in the UK’s residential property market.

The results coincide with various predictions on house price increases over the next decade, partly assisted by various government initiatives which are beginning to take effect in the economy, such as the ‘help to buy’ scheme.

Speaking on UTB’s findings, Noel Meredith, Director at United Trust Bank, said: “It’s encouraging to hear that brokers are finding lenders more willing to consider their development finance proposals and if the High Street banks are easing their restrictions on offering credit to developers it’s a strong indication that confidence in the property market may be returning.

The survey also found that 32 per cent of brokers believe that independent development finance banks are far superior in the flexibility of lending criteria.

A further 23 per cent of brokers also suggested that they get a far better and more personal service from using an independent development finance bank.

Noel added: “What’s even more interesting is that even though some High Street lenders may be starting to consider more development finance loans, many brokers have built strong relationships with smaller, independent development finance banks which continued to offer finance when the big banks brought down the shutters.

“As a result, whilst specialist lenders may initially have been viewed by some as an alternative source of funding until the High Street lenders returned, many brokers and developers have been won over by the flexibility and service offered by these specialist lenders to the point that they may not automatically return to the High Street banks when they loosen their purse strings.”