Lending a hand to SME builders in the UK

Regardless of snap elections or Brexit, there’s a bigger underlying issue at the heart of our economy – the British housing market remains chronically under supplied and has done for the last two decades.

Various figures are bandied around but many agree that around 300,000 new homes need to be built each year to cope with demand, even if net migration were to fall substantially.

There has been some improvement. In 2015-2016 almost 190,000 net additional homes (including 164,000 new builds) were created but even this is 15% below the 2007-08 peak. With still only about half the amount we need is built each year, this situation is likely to get worse before it gets better.

For the past decade, SME housebuilders and developers in particular have had a tough deal. Between 2007-2009, with the financial crash heavily affecting businesses, a third of small companies ceased building homes.

Over half the countries entire new build are built by just 7 PLC Housebuilders, who have the scale, finance and synergies to dominate. It’s a tragedy that along with the usual challenges of red tape and bureaucracy, many lenders simply shut their doors to small and medium housebuilding companies, scared of their own shadows and that of the regulator.

Now we have the rising cost of imported materials thanks to the drop in Sterling, and the fear that one in four construction workers could be lost from a ‘hard’ Brexit.  It’s in this sort of environment where housebuilders and developers, in need of finance, must seek out a fast, flexible and compliant alternative to the mainstream lenders that are poor quality and inefficient.

One such refreshing alternative is Go Develop’s unique joint venture property partnership.  It has been described as a game changer, a proposition like no other and we would agree.

Our unique joint venture funding solution allows us to support our partners with 100 per cent LTV full funding for all land and build costs. Indeed, it is often 115% of cost at the outset when all the developer’s soft costs and SDLT are paid for, by us.

Delivering funds on time, every time, fast and fuss free and being simple to do business with, enables our developer partners to do what they do best, crack on and develop.

Our developer partners have no outlay with us, not a penny, so there’s no drain on reserves or resources and our team are driven and motivated, with a long housebuilding track record. We get paid at the end, like our developer partner, so we are all aligned as one close relationship.

We want to help return the number of housebuilders in operation to 2007 levels which could equate to boosting the housing supply by 25k homes per year. So cut through the lenders doing U turns, cut through the macro-economic noise, and be certain that in these uncertain times, housebuilders and developers can use our money to make more.