Partner Article

Property developers look to specialist lender for support

A specialist lender is breaking new ground with an innovative financial product designed to support property developers.

North East-based High Street Boutique Finance has seen demand for its Development Finance product soar in the first six months of 2013, with a 30 per cent increase in enquiries, compared to the final two quarters of 2012.

The Development Finance product was launched last spring after High Street Boutique Finance recognised that many private property developers were being left frustrated by banks and were unable to secure funding for new schemes, or for the completion of stalled projects.

Unlike many traditional lenders, High Street Boutique Finance will fund 100 per cent of build costs and can support schemes that have been part-developed.

It will consider finance of up to £1 million and can fund both residential and commercial developments, including new builds, refurbishments and student lets, throughout the UK.

The Development Finance product allows developers to draw down funds when they need them and High Street Boutique Finance will lend against the 90 day valuation figure, rather than the purchase price.

High Street Boutique Finance is currently helping to fund property developments in London, Cornwall, Yorkshire, Scotland and the North East, with £18 million worth of schemes potentially coming on-stream in the coming months.

Willi Thompson, business development manager of High Street Boutique Finance, said: “The financial landscape has changed drastically since the onset of the credit crunch and private property developers have often found support from traditional lenders hard to come by, or had their funding withdrawn after work has started, with the bank effectively ‘pulling the plug’ on their projects.

“Many perfectly viable projects have stalled or have never been able to get off the ground.

“As the demand for our Development Finance product shows, many developers are eager to move forward with their projects and are looking for alternative funding in order to do so.”

The lender recently supported Yorkshire-based PDS Construction in the building of a private residential development at Green Lane in York, providing just over 50 per cent of the building costs.

Commenting on the Development Finance product, Bruce Clemmit, director of PDS Construction, said: “We were left very frustrated by our bank, which didn’t seem interested in lending in the construction sector.

“We had already laid the foundations at the site but found that a lot of traditional lenders only wanted to fund developments right at the start: they didn’t want to touch them once a spade had been put in the ground.

“High Street Boutique Finance, however, was very supportive of the development – the team were accessible, easy to deal with and responded very quickly. And the ability to draw down on funds when we needed them was very useful, as it greatly helped with cash flow.”

Willi Thompson added: “The Development Finance product offers a flexible solution for developers and can help bring projects such as the Green Lane scheme to life. We are delighted to be playing a part in supporting the UK construction sector in this way.”

High Street Boutique Finance is part of The High Street Group, which was founded in 2008 and includes a range of complementary financial services companies including High Street Financial Claims and High Street Tax Issues. The group, which has offices in Newcastle and Sunderland, employs 130 people.

This was posted in Bdaily's Members' News section by High Street Boutique Finance .