Reading the government’s plans to directly commission small-scale developments on public land was certainly a good news story to start the year (‘Government to directly build affordable homes’, PropertyWeek.com, 04.01.16).

Gaining access to land is often a major hurdle for smaller building companies to growing their businesses. And recent history shows that putting the onus on big housebuilders to build more and solve the housing stock deficit simply doesn’t work.

But access to land isn’t the only barrier for small developers. Securing finance and recruiting expertise are two more critical journeys with many hazards and setbacks.

As well as unlocking land, the government must now help more developers to receive the critical access to development funds that they need to put the plots to work.

For many bank lenders, small-scale development capital is still too expensive for them to lend; for others, protracted memories of the 2008 crash have left them with little appetite or sufficient nerve to do business with builders.

This week’s news cast a warm glow on the nation’s housebuilding industry. But, if land becomes easier to come by, the money to buy and build on it must first flow more easily. Here lies the opportunity for alternative, ‘non-bank’ sources to fill the crucial funding gaps.

Christian Faes, co-founder and chief executive officer, LendInvest

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