Will a lack of construction finance stifle the Government's ambitious housebuilding plans?
22 January 2016
On Monday the 18th, Funding Options founder Conrad Ford appeared on BBC Radio 4's Today programme to discuss the housebuilding sector.
The discussion focused on research carried out by Funding Options, which reveals large housebuilders are seeing their profitability exceed pre-crunch highs while small and medium sized housebuilding firms have not recovered to the same extent — and that is holding back housebuilding levels.
As Conrad told Simon Jack on the Today programme:
"This tells us there is pent-up capacity to build new houses — if we can only unlock the plots and unlock finance, we can get more built."
Conrad's comments struck a chord in the housebuilding and construction industry, with Chris Carr, chairman of the FMB's Home Builders Group telling Construction News:
"It doesn’t matter what anyone tells you, the banks just say we are too high risk."
Mr Carr also said it has become the norm for SME housebuilders to borrow development finance from friends or private investors, rather than turn to traditional lenders.
Reacting to the coverage in Construction News, Conrad adds:
"More than any other research we've done recently, these findings have generated a big reaction within the construction industry. Chris Carr's comments are just one example of the sentiment we're hearing from property developers from all over the country who are getting in touch with us. It feels like we've hit a raw nerve by reopening the discussion on the construction industry's access to finance – or lack thereof."
You can read the Construction News story here.