Brokers consider flexibility, fees and charges as key factors in choosing a development finance lender, research from a specialist bank has uncovered.
A new study undertaken by United Trust Bank (UTB) has discovered that most brokers consider ‘flexibility’ (25 per cent) and ‘lender fees and charges' (25 per cent) as the most important factors to consider when sourcing development finance.
Surprisingly, only 7 per cent of those surveyed chose ‘speed’ as a necessary aspect of development finance, rendering it the option chosen by the fewest number of brokers.
UTB’s survey also found that nearly two thirds (62 per cent) of brokers are usually given complete autonomy to choose a lender by their clients.
Nearly three quarters (73 per cent) of intermediaries working in the development sector also confirmed that they encounter the majority of their new clients through referrals.
37 per cent of brokers sourced new clients through recommendations from architects, accountants, estate agents and other professionals, while 36 per cent said that new customers were obtained through existing clients.
Speaking about the survey’s findings, UTB’s Director, Noel Meredith, said: “Lender flexibility is paramount in development finance when perfect proposals are rare and builds don’t always go to plan. Brokers should, of course, have a close eye on the costs for their clients and it’s an important factor when choosing a lender.
“However, comparisons of fees and charges should take into account the possibilities of delays in the build or the sales period. Decisions made purely on taking the most optimistic view of a project’s progress can come unstuck.
“At United Trust Bank, we also feel that the capability of the lender - in terms of expertise, knowledge and the ability to guide and advise the developer beyond just aspects of the financing - can be an extremely useful addition to the usual lender service."
Noel added: “The importance of referrals to brokers mirrors our own experience with borrowers. Also, new customers referred to us from previous borrowers and professional contacts tend to be better prospects than those coming to us through other means.”
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