Wolsey finds Solutions
“There is much talk at present about the need to increase the supply of housing to an ever increasing population.” comments Chris Foulkes, Director of Investment at Wolsey, the development finance specialists for housebuilders. “The major house builders are largely stepping up to the plate in this regard, but we forget that, not too long ago, it was the small to medium sized house builder that was producing nearly half the new housing supply. Not the case today.
Lack of residential development funding ‘where with all’, and starved of supplementary funding availability, combined with an ever more bureaucratic , lengthy, and expensive planning process, has largely squeezed the life out of this vital part of this housing supply sector.
Finding solutions to residential development finance requires imaginative thought combined with trusting business relationships. One such example is St Annes Road , Willenhall (pictured). Funded through Wolsey, this scheme by Dunedin Homes, has proved a remarkable example of how impossible commercial odds can be overcome.”
Housebuilder Magazine, June 2017
Stephen O'Brien interview with Housebuilder Spring 2017
Stephen O’Brien, recently interviewed by Housebuilder Magazine for his views from the property development finance perspective on the current market, focuses on the theme of segmentation in the market.
“If it is the right segment of the market things are looking OK. Certain parts I’d describe as more challenging. The upper end of the market over £2million where there are stamp duty changes or overseas buyers – they’re adjusting to the current environment. But, the adjustment in sterling has assisted a bit. Regional markets in which Wolsey mainly operates are fairing considerably better – where there is local housing for local needs.”
Since the EU referendum high street lending of development finance for housebuilders has continued to constrict, with banks agonising over market demand for schemes and their affordability. “I would say that for SMEs it continues to be a tougher environment. That’s where specialist residential development funders like ourselves come in who are comfortable with risk.”
Advice to housebuilders is to plan new homes that are Help to Buy eligible. “There is strong demand for Help to Buy product. It’s a very good initiative. The government sees housing as an important factor for the economy and social mobility. The nearer we get to its expiry date the more we need clear advice on its future.” Certainly as lenders of property development finance for housebuilders Wolsey is very supportive of the Help to Buy initiative.
Taken from interview with Housebuilder Magazine, Spring 2017
White Paper – good news for Small Housebuilders
The Government’s White Paper on housing, February 2017, is good news for the smaller developer.
As it sets out to give greater empowerment to Local Authorities to perform, we should see a move for councils to push more, smaller sites through the system – sites that the smaller/medium sized housebuilder will be well placed to deliver on. To that end one might predict that the White Paper opens up an opportunity for the smaller developer to play a far greater role in the vision for future new homes in this country.
With empowerment comes expectation and Local Authorities will be measured on what they can deliver. We can see that smaller sites will be an increasingly critical element of the mix to ensure councils meet targets.
There will be an impetus for councils to push more small developable sites through the planning system quickly to increase supply and this will inevitably generate opportunities for SME builders.
To achieve this intended increased capacity will inevitably put pressures on SMEs sourcing property development finance. While new opportunities might be created for smaller developers, the property development finance still needs to be in place to take them up. At Wolsey we are well placed, with over twenty years experience in this specialist field of development finance for housebuilders, to advise and support developers looking to a bright and busy future. Do talk to us.
Stephen O’Brien, MD
Property Development Finance not a barrier
“Securing the funding for development is not the issue,” explains Stephen O’Brien, MD of Wolsey, specialists in property development finance to housebuilders. “It is a matter of an experienced eye recognising the potential of what’s before them. If the housebuilder can demonstrate a sound proposal and level of delivery expertise, Wolsey will fund it. ”
The Riverside scheme, Hereford, is a prime example, explains Wolsey: “initial bank enquires for property development finance drew a blank, but on approaching Wolsey the proposal’s potential could be appreciated, and from that moment the residential development finance could be secured.” Now the scheme is nearing completion, with almost half the 18 apartments occupied. The finished building is striking in design rising on an elevated podium above the River Wye.
Article appears in Housebuilder, 2017.