Coalition must revitalise flagging development industry

Coalition must revitalise flagging development industry


Following the government’s recent proposals to breathe life into the house-building market, including the relaxation of the criteria which render 75,000 projects ‘commercially unviable’, the house-building market seems set for a revival.

This recent drive comes as no surprise, especially when considering that the level of new builds undertaken is at its lowest point since the economic crisis. 


CEO of

Regentsmead James Bloom, however, suggests that the coalition’s new measures may overlook a key factor in the attempt to revitalise a flagging industry.

Other than planning, the major constraint on new house-building projects is the availability of finance.

Such an issue can only be addressed when high-street lenders begin to get back into the smaller development sector.

Will this ever happen, though, or have the high street names deserted smaller developers?

We receive daily enquiries from A1-quality developers who should be able to walk into any sensible financial institution and obtain the appropriate finance. We are, however, seeing even experienced developers with substantial capital to put into a project, sizeable net assets and projects with excellent margins still being turned down and, in most cases, not even considered in the first place.

A recent example of this was a developer in East London who was putting over £1 million of their own capital into a project for nine flats. They had a multi-million pound unencumbered buy-to-let portfolio and their clearing bank would not even consider lending them the £550,000 they wanted to borrow, even though the deal had a GDV of over £2 million.

In an even more extreme case a developer based in Bristol, again with substantial net assets, wanted to increase his working overdraft from £10,000 to £20,000. In relation to the value of his business this figure was very small, yet he too was turned down by the high street lender because he was a developer.

These extreme examples are merely the tip of the iceberg and they represent a widespread lack of individual underwriting. Whole sectors are being blacklisted without there being any individual thought as to risk profiling.

At Regentsmead we look at everyone as an individual and for those that lack extensive experience we separately underwrite every case that is undertaken. We have the ability to accurately assess risk and will not assume that whole sectors are equally risky or otherwise.

For any government measures to have any real effect on the house-building industry the whole issue of finance needs a wide-ranging, serious re-think, as until this is resolved the industry will continue to stagnate.

From Regentsmead’s point of view, and as a lender with substantial resources of our own to lend, the market feels positive and we have never been busier. We are inundated with excellent cases which five years ago we may well not have seen. We are hoping that in this period we will create some excellent relationships which will continue even if high street banks do re-enter the market, given that we have supported developers in times of difficulty.

Introducers are a key source now for developers looking to obtain finance as they are often the only ones who have contacts with lenders. At Regentsmead we conduct nearly 90 per cent of our transactions through introducers and pay their fees at the offer stage, rather than when the drawdown of funds begins. 

Although these are unprecedented times for the house-building industry, in terms of a lack of available finance, funds can always be made available if you know where to look. 


For any help you might need with house-building finance, please contact James Bloom on 020 8952 1414 or visit


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