41% of brokers operating in the development finance sector believe that it has become easier to place development finance cases over the last year, according to findings from United Trust Bank’s most recent broker survey.
The lender believes this reflect a growing optimism in the UK’s residential property market.
However, even if the High Street banks are beginning to relax their lending criteria, 83% of brokers said they will continue to use independent development finance lenders. When asked for the main reason why they would continue to use a specialist development finance lender rather than a High Street bank the responses were as follows:
32% of brokers believe that independent development finance banks are more flexible than High Street lenders.
24% of brokers will keep using independent development finance banks because they supported developers, continuing to lend when the High Street banks wouldn’t.
23% of brokers believe that they get a better service from an independent development finance bank.
Noel Meredith, director at United Trust Bank, said: “It’s encouraging to hear that brokers are finding lenders more willing to consider their development finance proposals and if the High Street banks are easing their restrictions on offering credit to developers it’s a strong indication that confidence in the property market may be returning.
“However, what’s even more interesting is that even though some High Street lenders may be starting to consider more development finance loans, many brokers have built strong relationships with smaller, independent development finance banks which continued to offer finance when the big banks brought down the shutters.
“As a result, whilst specialist lenders may initially have been viewed by some as an alternative source of funding until the High Street lenders returned, many brokers and developers have been won over by the flexibility and service offered by these specialist lenders to the point that they may not automatically return to the High Street banks when they loosen their purse strings.”