We have certainly seen no decrease in demand from investors wanting to develop or refurbish property, and few have had problems either selling or letting it out once it has been developed. This should continue, as there is plenty of opportunity for small developers and an increasing shortage of properties to rent as the growing homeless issue is a witness to.
The challenge for some developers may well be finding longer term finance to exit from their bridging loan having built or refurbished their property. Already this year, two mortgage lenders have withdrawn from new lending due to either having no more funds or having already lent out their tranche of funding.
Indeed, funding may well be the key issue of 2019 and it must certainly be on every broker’s radar to ensure they are placing their clients with the lenders who they know have the requisite funding to complete the loan. In fact it is not only about having completing the loan in the first place, but the lender having the backup funds to extend it, without punitive interest, should the borrower run into difficulty and need an extension to their loan term.
Looking towards the uncertainty ahead, lenders with the surety of their own funds and a fair policy regarding extending the loan term, have to be a safer bet for both brokers and their clients.