editor's letter

Why partnering with the right lender is integral when times are uncertain




According to FMB’s Q1 2022 ‘State of Trade Survey’, nearly three-quarters of small builders have delayed jobs due to a lack of materials, while just over half have been postponed because of a dearth of skilled tradespeople, such as bricklayers, carpenters and joiners.

Sky-rocketing price tags on materials are also impacting construction work and almost all (95%) of FMB members expect costs to further escalate. Consequently, 83% have put up their prices. SME developers across the nation will undoubtedly be feeling the pressures affecting their bottom lines, and will need to work smarter with their chosen partners if they want to stay on track. While house prices have remained a positive glitch in the UK’s economy against a backdrop of surging inflation and the cost of living crisis, it simply won’t be enough to rely on. Our cover story, No longer safe as houses in the latest issue of Bridging & Commercial Magazine, brings together nine experts to hash out the challenges the property development market is experiencing — and set to face —and how SMEs can overcome them through original thinking.

Fortunately, some of those innovations have already come to the fore. Finanze MD Alastair Hoyne reveals how a train conversation with a SSAS pension administrator led to the creation of a brand new product with Elysium Bridging that could lead to significant savings for developers. We have also listed a series of proptech inventions that are taking the market by storm and should be on your radar, and how access to an exclusive funding line is allowing one brokerage to offer new solutions to its clients.

Elsewhere in The Development Issue, we discuss what you need to know about forward funding, how frameworks can help level the playing field for SMEs in construction, and the importance of downside protection.

Since we launched the first issue of Bridging & Commercial, we have been expecting M&A activity on the horizon—and it now seems to be coming in droves. SPF Private Clients, The Loan Partnership, Fluent Money Group, Enra Specialist Finance, and Connect IFA have been in the news recently, to name a few. Considering 13% of bridging companies are looking to sell their business, we look at what goes into the sale of a loan book, and the considerations that need to be made on both sides of such a transaction.

Frequently reiterated throughout the May/June issue is that finance providers, brokers and property developers will need to work collaboratively in order for each party to continue successfully—and intermediaries will need to be the conductors of this. A sound understanding of who they are arranging finance for their clients with, and how they approach problems, is integral. And this leads me to impart something intriguing which a lender recently told me: “When times are certain, people are just looking for finance. But when times are uncertain, it’s about keeping the right partner in your development funder.”

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