"These developers that have struggled in the early stages of their business have gone on to build significant businesses, yet it’s clear funding is still a real barrier for entry and early-stage growth"
- Terry Woodley - Shawbrook
Property developers have pointed to funding as their key concern according to new research from Shawbrook.
77% said that finding funding was the most complicated aspect of their business, with three-quarters (75%) saying there are limited funding options for developers.
Significant numbers of developers have been rejected from accessing funding, with over a quarter (26%) having been rejected by a mainstream lender multiple times.
The conception of a business appears to be the hardest stage to secure funding, with 80% of developers stating that it was particularly difficult to find funding when they were starting their business. This is followed closely by 74% of developers who felt that it was harder to secure funding for a smaller business.
However, the majority of developers agree that no matter the size, sourcing funding is the hardest part of running their business (78%), with the same number agreeing that it is the funding expertise that is difficult to source.
Fortunately, specialist funding is available for developers struggling to access funding for their projects, and 77% said that specialist lenders offer better support to developers.
Terry Woodley, Head of Development Finance at Shawbrook comments: “Without significant housebuilding activity, the manifesto targets of the main parties have no chance of success. Housebuilding is a key issue on the political agenda, but developers need support to understand the funding landscape and access the funding levels they need so that these much-needed projects can get off the ground.
"These developers that have struggled in the early stages of their business have gone on to build significant businesses, yet it’s clear funding is still a real barrier for entry and early-stage growth.
"There is funding available, and working with a specialist lender can help with structuring developers’ funding needs to surface that liquidity. If the gap is not addressed, promises to boost housing numbers will be very difficult to achieve.”
