Some big regeneration schemes could be delayed as the credit crunch affects the transformation of some of the country’s most despoiled tracts of urban land. Financial Times
Developers are braced for a hiatus as banks, nervous about debt financing and the slowdown in the housing market, take a cautious approach to regeneration projects that seek substantial funding.
'The banks are looking very closely at their risk profile and at the schemes’ exposure, prices and returns on capital,' says Kevan Carrick, policy spokesman for the RICS in the north-east of England.
But regeneration consortia are viewing the banks’ reappraisal more as a blip than a significant issue, Carrick says. 'They are saying it’s part of the economic cycle.'
And while there is plenty of discussion about the credit crunch in the regeneration press, 'there’s an absence of evidence of deals being put on hold or stopped', says Gareth Potts, research and policy director at the British Urban Regeneration Association.
One explanation, he says, may be that regeneration has become an asset class in its own right in recent years. The sector is benefiting from market predictions that it will generate greater returns than commercial property.