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Development Finance

The History of Development Finance

Development finance refers to the financial activities, instruments and institutions aimed at promoting economic growth and reducing poverty in developing countries. It encompasses a range of activities, including the provision of long-term funding, investment in infrastructure projects and support for small and medium-sized enterprises.

The history of development finance can be traced back to the post-World War II period, when developed countries began to provide financial assistance to their former colonies in an effort to support their economic development. In 1944, the Bretton Woods Conference established the International Monetary Fund (IMF) and the World Bank, both of which have played a key role in development finance ever since.

The World Bank, in particular, was established to provide loans for large-scale infrastructure projects, such as the construction of dams, bridges and roads, in developing countries. Over time, the World Bank has evolved to become one of the largest sources of development finance, with a focus on reducing poverty, promoting economic growth and improving living standards in developing countries.

In the 1970s and 1980s, the World Bank and IMF faced criticism from developing countries, who argued that their policies were too focused on macroeconomic stability and neglected the needs of the poor. As a result, new development finance institutions were established, such as the African Development Bank, the Asian Development Bank and the Inter-American Development Bank, which had a specific focus on regional development.

IFC LogoIn the 1990s and 2000s, private sector participation in development finance increased, as more and more companies and investors saw opportunities for profit in developing countries. This led to the establishment of new development finance institutions, such as the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), which focused on promoting private sector investment in developing countries.

In recent years, microfinance has emerged as an important tool for development finance, providing small loans to individuals and businesses in developing countries that may not have access to traditional banking services. Microfinance institutions have been successful in reaching populations that have been excluded from the formal financial sector and have helped to create new economic opportunities for many people in developing countries.

Despite the growth of development finance in recent decades, many challenges remain. Developing countries still face significant barriers to accessing international capital markets, including political and economic instability, corruption and limited infrastructure. Additionally, there are concerns about the impact of development finance on the environment, with many large-scale infrastructure projects having a negative impact on local ecosystems and communities. However, this can be combatted by signing up for projects such as Ecologi. A project in which you fund the planting of tree’s every month, a project that we are part of with our profile being found here

In conclusion, development finance has a long and complex history, with many institutions and instruments being established over the past several decades to promote economic growth and reduce poverty in developing countries. While significant progress has been made in this area, there are still many challenges that need to be addressed to ensure that development finance continues to support sustainable and inclusive economic growth in the future.

Development Finance

Should Property Developers Hire Agents to Find the Best Deals?

One of the first things you learn when you become a property developer is the importance of being at the front of the queue for prime plots or pieces of land.  After all, this represents the very foundation of becoming a successful property developer – beating others to the punch where high-potential build units are concerned.

What’s discovered quickly by newcomers to property developments is that there are countless different options available for tracking down land and properties. You can view listings, head to specialist auctions, speak with commercial state agents and so on. Play your cards right and with a little luck (i.e. right place at the right time) thrown into the mix, you could score yourself something seriously profitable.

But when it comes to the best of the sources available, opinions differ from one developer to the next. Many professionals within the sector (established and aspiring) have chosen to go with the ‘armchair’ approach, and to put their faith in web portals.

There is no shortage of online resources for developers in search of profitable investment opportunities and browsing online opens the door to a full nationwide search at the touch of a button. You can even check out what the UK’s major auction houses are planning to put under the hammer and get a head start on your due diligence.

Best of all, you can add your name to a mailing list, set a bunch of preferences and be alerted each time something pops up that might be of interest to you; all with no effort required on your part.

All well and good, but there is a flaw to what seems like a wholly logical approach to seeking development opportunities; that is the fact that there are probably several thousand more developers just like you, who have adopted the exact same approach. The army of armchair-dwelling developers who wait for good investment opportunities to fall (literally) into their laps is growing all the time, creating ferocious competition for those who adopt this approach.

Missing Out on the Best Deals?

Even if you are happy to contend with this kind of competition, there is another huge issue with this particular approach. If there is one important lesson to learn about property developments, it is this:

Some (if not most) of the most lucrative deals available are never listed or marketed online.

The best deals of all have a tendency to be completely ‘off-market’ in nature, meaning you will never even catch sight of them by staying glued to your computer. It is not that these plots and properties are not put up for sale, or that numerous potential buyers may find themselves bidding against one another to seal the deal.

Instead, it is simply a case of established commercial estate agents being right at the front of the queue, when and where the most enticing deals pop up. The owner of the property or plot being sold puts together a description of what is on offer, they send this to the commercial agents on their mailing lists and these agents immediately contact the clients on their own books who are looking for these types of investment opportunities.

In doing so, sellers shift their lots with little to no fuss and get the best possible price for them, without ever having listed them on the open market.

Of course, all of the above only holds any real value if the agents a property developer hires have the right contacts in the first place. Even so, it illustrates how even the most committed approach to ‘armchair’ research as a property developer could still leave you right at the back of the queue.

Development Finance

Small-Scale Property Development FAQs: Key Questions Answered

  1. What qualifies as a ‘small-scale’ development?

The designation ‘small-scale’ in relation to property developments does not actually have a clear or formal definition. Even so, most regard a small-scale development as one that is made up of around 5 to 20 units (such as flats or apartments), capable of generating a profit of say £100k to £500k over a period of 18-24 months.

  1. Are small-scale development projects comparatively simple?

Compared to large-scale development projects, the answer is yes – small-scale developments tend to be less complex and labour-intensive. But when compared to a standard flip or refurb, even a small-scale property development project can be a much more extensive undertaking. Costs are significantly higher and the scope of the work is greater, calling for the involvement of a knowledgeable and experienced project manager.

  1. What are the most profitable small-scale development projects right now?

It depends entirely on your knowledge, experience, expertise, budget and location. Even so, conversion projects (whereby existing properties are repurposed) tend to be the preferred options for new and aspiring developers.  Across the UK, there is a huge and growing contingency of abandoned and unused commercial buildings with enormous potential for residential conversions, many of which have the potential to be exceptionally lucrative.

  1. Are first-time developers inherently at a disadvantage?

Yes, at least when it comes to funding their first property development project. This is due to the fact that many specialist development finance products are issued exclusively to experienced developers with an established track record. Many lenders exclude first-time developers from consideration, reducing the number of viable funding options available. Even so, it is perfectly possible to fund almost any type of small-scale development project with a bridging loan, a secured commercial loan, or any other viable commercial mortgage.

  1. How difficult is it for new developers to qualify for funding?

Newcomers to property developments looking to get their first projects on the ground are strongly recommended to seek independent broker support at an early stage. An experienced broker can help pair your requirements with an appropriate lender, while at the same time negotiating on your behalf to ensure you get an unbeatable deal. In addition, your broker will help you prepare a strong and convincing application, increasing your likelihood of qualifying for the funding you need.

  1. Is it not cheaper to apply for funding directly with a lender?

No, and for two important reasons. Firstly, brokers know exactly how to negotiate the kinds of deals that would not be accessible directly from any lender. They also have the kinds of established relationships with lenders that can lead to significantly reduced borrowing costs and lower fees. In addition, many development finance specialists offer their services exclusively via broker introductions. This means that many of the best deals on the market may be completely inaccessible if you do not apply with the help and support of a broker.

  1. How are development finance loans issued and repaid?

Specialist development finance differs from bridging loans and other commercial mortgages, in that the funds are transferred in a series of instalments. The release of each instalment is tied to the completion of a specific phase of the project, overseen by a surveyor (hired by the bank and paid for by the borrower). Most development finance loans are designed to be repaid within 6 to 24 months, during which interest accrues on a monthly basis.  The full balance is either repaid upon the sale of the completed development, or by transitioning the loan to a longer-term repayment facility (like a buy-to-let mortgage).

Development Finance

The Benefits of Private Lending as Development Finance

As economic uncertainty continues to escalate, the UK’s biggest banks are becoming increasingly inflexible. Strict lending regulations coupled with complex in-house policies are making it more difficult than ever to qualify for specialist funding on the High Street.

Property developers and real estate investors in particular are feeling the pinch.  Potentially lucrative projects are being left in limbo, or in some instances failing to even get off the ground in the first place.

But this lack of flexibility and product availability on the High Street need not spell doom and gloom for investors and developers. It simply calls for a search for affordable funding beyond the High Street, which is where private lending comes into play.

A Rapidly Evolving Segment

Demand for the kinds of flexible financial services that simply do not exist on the High Street is being met by a rapidly expanding specialist lending sector.  Across the UK, dozens of private lenders have gone into business to effectively (and in some cases literally) ‘bridge’ the gaps in the services provided by mainstream banks.

From bridging loans to auction finance to specialist development finance, it’s all available from an extensive network of private lenders.

What makes this specialist lending sector unique is how all applications for funding are assessed individually. None of the usual ‘binary’ application criteria apply – all requests are considered based on their broader merit.

This means that rather than being offered a limited range of off-the-shelf products, loans and development finance facilities are built from scratch to meet the exact requirements of the client. As a result, they get exactly what they need at a price they can afford, with terms and conditions that suit both the borrower and the lender.

The Advantages of Private Lending

Seeking support from a specialist lender (as opposed to a mainstream bank) can be beneficial in the following ways:

1.     Flexibility – All aspects of the facility arranged can be tailored to meet the unique requirements of the applicant. This includes LTVs as high as 90% or more, a wide variety of repayment options (loan terms) to choose from and the option to ‘roll up’ interest into the final repayment.

2.     Accessibility – None of the normal restrictions apply when seeking financial support from a specialist lender. Even with poor credit, a history of insolvency and/or no formal proof of income, it is still possible to qualify for flexible and affordable products like bridging loans.

3.     Speed – With all required paperwork and documentation in place, bridging loans and development finance loans can be arranged within a few working days. On the High Street, the closest comparable products could take weeks (if not months) to underwrite.

4.     Affordability – Interest rates and overall borrowing costs are always open to negotiation with specialist lenders. Some short-term facilities can be taken out from as little as 0.5% per month, with no initial arrangement fees, admin fees or deposit payments required.

5.     Freedom – Importantly, specialist lenders place few (if any) restrictions on how their products can be used. While traditional banks limit their loans and mortgages to very specific purposes, similar products for specialist lenders can be used for any legal purpose.

It is also possible to request a decision in principle on a bridging finance or development finance application, without posing a risk to your credit score.

Far from a last resort, more businesses (and mainstream borrowers) than ever before are setting their sights on the UK’s growing specialist lending sector. With the support and representation of a skilled broker, a product search that goes beyond the High Street can pave the way for significant savings.

Not to mention, a far faster, easier and less stressful experience than applying for funding via conventional channels.

For more information on any of the above or to discuss property development finance in more detail, contact a member of the team at UK Property Finance today.

Development Finance

What Investors Need to Know About Development Finance in 2022

Development Finance is an ideal solution for developers and property investors looking to fund the construction or refurbishment of their properties using short term funding solutions. When looking at funding for your development project it is imperative that you familiarise yourself with all the options available so that you can make an informed decision.

What is Development Finance?

Development Finance is a short-term loan for property development that is exclusively used for the construction or refurbishment of a property or properties. It provides funds for investors and developers to manage project purchases and build costs.

Whether you are considering a residential, commercial, or mixed-use project- development finance could be a funding option available to you, including ground-up new builds, knock-down and rebuild projects, conversions, and refurbishments.

Development loans are typically arranged very quickly as opposed to other long term funding products, such as mortgages, which can take considerably longer to be approved. 

Most lenders will offer a loan period of 6 to 24 months however some, but not all, may extend this should you need to.

Although similar to bridging finance, development finance can provide both an upfront loan towards the site acquisition as well as further funding released at different stages throughout the project.

The Advantages & Disadvantages of Development Finance

Development finance offers unique benefits to property developers that other loan products can’t, however, it is vital that you take into consideration both the advantages and disadvantages before starting your development project.


  • Quick to Arrange

Development finance can be made available quicker than applying for a traditional mortgage. Funds can be arranged in a short space of time, typically between 1 to 4 weeks which allows the development project to get underway while alternative funding is arranged.

  • Short-Term Loan

Development finance loans are available for a short term, usually between 6 and 24 months. The transient nature of this type of finance reduces the risk of being burdened by debt for an extended period or facing high early repayment penalties should you wish to repay early.

  • Roll-up Interest 

Development Finance offers developers the opportunity to repay all the capital and interest in a single payment at the end of the term. The interest ‘rolls up’, eliminating the need for regular monthly payments.

  • Competitive Interest Rates

If you are an experienced developer, you may be able to secure a development loan at a lower interest rate than inexperienced developers. Loans can be secured at a lower interest rate for larger projects and can be further lowered if you borrow a lower proportion of the gross development value (GDV).

Considering all these factors leaves us with a realistic range of 16% per annum as the upper limit for the interest rate on a development finance project that can go as low as 5% per annum for experienced developers borrowing a large amount at a low proportion of the GDV. 

  • Take On Large Projects 

Development finance paves the way for developers to take on ambitious projects with higher complexity and enables them to work on multiple development projects simultaneously. Traditional financing options can restrict developers from experimenting with more complex projects, whereas development finance offers the flexibility to work on projects of varying size and complexity.

  • Available For a Wide Range of Projects

Development finance is ideal for new build, residential, commercial, and semi-commercial property development projects. It is especially beneficial for properties that require remedial works prior to being funded using traditional forms of financing. Developers can borrow loans even for derelict properties that would be impossible to get a mortgage for. The short-term financing option allows developers to refurbish any property and sell at a profit.

  • Limited Capital Outlay

Development finance doesn’t require any upfront payment other than your deposit. Instead your cash on hand can be used for other expenses or simply to improve your cash flow position.


  • Eligibility Criteria

Most lenders have strict eligibility criteria when approving development finance, particularly when the borrower is a first time property developer. Developers with extensive portfolios will find it significantly easier to be approved for this type of finance.

  • Planning Permissions

Many lenders will require you to have all planning permissions needed for the development to be in place before considering any application for development finance. Issues with planning may cause considerable additional costs and problems down the line and therefore the lender will want to see evidence that planning has been approved prior to approval.

  • Paper Work

As the application process for development finance can be complex, it is imperative that you have all your paperwork in order before you apply. Lenders will expect to see an extensive plan detailing all aspects of the development including planning permission, designs, drawings and most importantly, costings.

  • Additional Fees

It is important to take into account any additional fees when costing your development project. These include arrangement fees, valuation fees and legal fees which can usually be added to the loan amount and therefore will not need to be paid upfront. There is also likely to be an exit fee at the end of the loan period when full repayment is made.

  • Development Finance for Limited Companies

For limited companies applying for development finance, most lenders will require some form of personal guarantee from the company’s directors to minimise the risk to themselves. It is worth noting that individuals applying will be personally liable for the entirety of the loan.

Who Uses Development Finance?

As the name suggests, development finance is primarily used by property developers and investors, for ground-up and extensive renovation projects. Funding can be used for land purchases as well as for the entire building costs. It is not unusual for a lender to fund, for example, 50% of the land purchase and 70% for the building costs, meaning that the developer will have less upfront costs which in turn positively effects their cash flow which can be utilised in other areas.

Is Development Finance Right for Me?

Once you have conducted your due diligence, it is time to make a final decision. So, how do you determine whether development finance suits you and your business needs? Answering a few simple questions can help you gain a better understanding:

Evaluating your business needs is the first step to determining if Development finance is ideal for you:

  • Analyse whether your business needs a short-term cash inflow or long-term financial aid.
  • Assess your current financial situation to determine your ability to repay the loan on time without disturbing your finances.
  •  Lastly, gauge if you can provide the necessary paperwork to qualify for and access the development loan.

If you can answer these questions comfortably, development finance might be what you need to fund your project. An experienced development finance broker can help developers access the most comprehensive list of development finance lenders at the lowest market rates.


Individuals, builders and businesses looking for quick, short-term funding can benefit from development finance to fund their development projects. It provides access to the funds developers need to develop or renovate residential, commercial, or mixed-use properties.

Working with an experienced Development Finance broker, such as UK Property Finance Ltd, ensures that the funds you require will be delivered on time and professionally. Talk to our team today for flexible, fast property development loan financing.

Development Finance

Development Finance: What Documentation Do I Need to Apply?

Each development finance product is unique – a bespoke agreement reached between the issuer and the borrower. There are various different types of development finance that can be issued, each targeting different kinds of developments and fulfilling developers’ individual requirements.

But what remains consistent with all types of development finance is the importance of submitting the appropriate paperwork. The documentation you provide to support your application will play a major role in determining your eligibility for funding.

It is therefore essential to ensure you have the right documentation in place ahead of time, reducing the risk of delays and disruptions.

What Paperwork Do I Need?

The extent of the paperwork required as part of your application for funding will be determined by the nature and extent of your requirements. 

However, the overwhelming majority of lenders will expect to be presented with formal evidence of the following as standard:

  • The value of the property at the time of your application
  • The estimated final value of the completed development
  • An overview of all construction and renovation costs
  • A complete dissection of the project’s schedule and deadlines
  • Extensive evidence of your experience and track record
  • Examples of successfully completed similar projects
  • Full disclosure of all providers involved in this project
  • Confirmation of receipt of planning permission and permits
  • Acknowledgement of any restrictions that may apply

In addition to the above, you will also need to provide your lender with evidence of a workable exit strategy. Your job is essentially to convince your lender that you are a safe candidate for development finance, by showing them exactly when and how you will repay the facility.

This could be in the form of a lump-sum payment following the sale of the completed development, or by transitioning your development finance loan onto a longer-term repayment product.

Do I Need a Broker?

While broker support is not mandatory when applying for development finance, it can be beneficial in a variety of ways.

A few of the many advantages of enlisting independent broker support:

  • Access to the broadest possible market of lenders and development finance products, as many specialist service providers offer their services exclusively via introductions.
  • Independent expert advice on the various types of development finance products available, helping you make the right choice for your project.
  • A knowledgeable and experienced professional to negotiate on your behalf, ensuring you get the best possible deal from a top-rated lender.
  • The advice and support you need to present a convincing application, complete with all necessary documentation and supporting evidence.
  • A faster and simpler application process – essential when looking to secure funding in a time-critical scenario.

As broker support is offered 100% free of charge to the client, it simply makes sense to take advantage of their knowledge and expertise.

For more information on the logistics of development finance or to get your application underway, contact a member of the team at UK Property Finance today.

Development Finance Other Finance News

Exactly How Much Did Boris Johnson Borrow to Refurbish His Downing Street Flat?

It is no secret that Boris Johnson chose a rather questionable time to refurbish his luxury London flat. While most people across the UK were struggling to make ends meet, the Prime Minister raised eyebrows by spending a small fortune on predominantly unnecessary adornments.

The exact amount he borrowed to pay for the refurbishments has been revealed: an eye-watering £52,000.  Having been questioned on where the funds came from, the Conservative Party has now admitted that Boris Johnson “personally settled the costs incurred by Lord Brownlow”, a party donor who helped finance the work.

Having previously described what was once the home of Theresa May as a “John Lewis furniture nightmare”, his wife, Carrie, made no secret of her disdain for its décor. Disdain so severe that the pair thought it sensible to hire top designer Lulu Lytle to oversee its overhaul, which according to insiders included £840-a-roll golden wallpaper.

Not that such a high price guarantees quality, as rumor has it the elaborate wall covering has peeled away from its surface.

A Painful Price Paid by the Taxpayer

Documents have now confirmed that the loan repaid by Boris Johnson came alongside an additional £28,600 paid by you, the UK taxpayer. Tasks including painting and sanding his floorboards were funded straight from the pockets of the Great British public, leaving sour tastes in the mouths of many.

Published financial accounts from the Conservative Party indicate a “bridging loan” of £52,802 repaid by Johnson out of party funds last summer. Lord Ludlow would then go on to cover these costs, but no declaration was made to the Electronic Commission.

Even though the law clearly states that all donations and loans to political parties of five-figures or more must be reported.

“All reportable donations to the Conservative Party are correctly declared to the Electoral Commission, published by them and comply fully with the law. Gifts and benefits received in a ministerial capacity are, and will continue to be, declared in government transparency returns,” was the response from the conservative Party, clearly refusing to acknowledge any wrongdoing.

Questions remain as to how the refurbishment was originally funded and how much the project cost in total. Despite the declaration from the Conservative Party, numerous reports suggest that he may have spent more than £200,000 breaking in his new flat.

Again, all at a time when the rest of the country was struggling to make ends meet and facing a terrifyingly uncertain financial future.

Development Finance Other Finance News

House Building Alone Will Not Solve the Current Housing Crisis

There are two things driving the UK’s real estate sectors record performance right now; the growing desire among movers and first-time buyers to escape the city and pick up spacious properties with private gardens and rock-bottom interest rates, this usually takes priority.

For some time now mortgage rates have been hovering around all-time lows, and for those able to qualify for a mortgage it has been a tempting venture. Particularly where larger deposits are being handed over, some of the mortgage rates available right now are lower than they have been in years.

You have to sympathise with what is fast becoming an entire generation of frustrated first-time buyers. Or should that be, would-be first-time buyers, who for a string of reasons are unable to capitalise on the lowest mortgage interest rates they may ever see in their lifetime.

Growing Wealth Inequality

Young people in droves are accepting that they are unlikely to ever own their own homes. It is an issue that is more prevalent in some parts of the UK than others, but is nonetheless an undeniable crisis the whole country is facing.

Many continue to point the finger of blame squarely at the lack of new housing inventory; The government isn’t close to reaching its own house building targets meaning there simply aren’t enough affordable homes to go around. Even if the government was to fulfill its overly ambitious goals, chances are it would have little to no difference on average property prices.

Affordability is not something that changes overnight, particularly in an era of unprecedented demand. Give things a decade or so and we could see added inventory knocking 3% off the average price of the UK home; as things are going right now this is the kind of growth house prices are seeing every few months.

Irrespective of how many ‘affordable’ homes are built over the coming years, catastrophic wealth inequality is still going to price most first-time buyers out of the market.

Access to Affordable Mortgage Rates

Another issue compounding the problem is the difficulties first-time buyers are facing when attempting to access today’s competitive mortgage rates. For most, coming close to saving a 20% deposit or even 10% deposit has always been completely out of the question; highlighting the value and importance of the government-backed 5% mortgage initiative.

For the first time in a long time, first-time buyers were presented with the opportunity to qualify for a 95% LTV with a deposit of just 5%, until it became clear that OTT scrutiny and excessive affordability tests are making it all-but impossible for most to qualify.

A 5% deposit mortgage is all well and good, but not if you can only borrow four times your annual income. Applicants without a good credit history are also being declined, as well as those who took advantage of government grants or those who were furloughed during the COVID-19 crisis.

The addition of affordable inventory to the housing market would of course be welcome, but is by no means a silver-bullet solution to the escalating housing crisis.

Development Finance

How Much Does Development Finance Cost?

Development finance is a specialist funding solution for experienced builders and developers. The funds are issued by lenders for the exclusive purpose of developing or refurbishing residential, commercial and mixed-use properties.

Development finance differs from other types of commercial finance in that it is typically released in stages as the project progresses. In addition, lenders consider the projected value of the completed property, not just its value at the time of the application.

What Costs Are Incurred with Development Finance?

Our online development finance calculator provides helpful insights into what to expect when applying for funding. Along with fixed or variable development finance rates (APR), as with most if not all finance products, there are various additional costs and commissions to factor in.

The most important of which are as follows:

Arrangement or Facility Fee

This is the initial fee charged by the lender for setting up the facility and to cover the admin costs of arranging the loan. Arrangement fees vary significantly from one lender to the next – anything from 0% to 2% – and are normally added to the loan when the loan is agreed, and the first instalment is made.

Broker Fee

Due to the large standing costs involved in simply being a broker, it has become more and more common for brokers to charge a fee for the services they provide.  Whether a fee is charged, the amount and when the fee is due is something to verify with your broker before going ahead.  The fee in most cases can be added to the loan.

Commitment Fees

This is something of a deposit or insurance policy for the benefit of the lender, which may be payable before due diligence begins. Development finance specialists undertake a variety of operational costs which must be considered.  These are often covered in advance by way of a non-refundable ‘commitment’ fee payable by the borrower.

Legal Fees

The applicant will also be expected to cover their own legal costs, even if the lender has its own in-house legal team that handles all pressing matters.  Solicitors in general require an up-front payment before commencing their services.

Valuation Fees

The current and projected future value of your property (or properties) must be independently verified and presented to the lender. Typically, development finance specialists allocate surveyors they know and trust to perform valuations, though the costs are always covered by the customer.

Monitoring Fees

This refers to the costs incurred by the lender of quantity surveyors hired to monitor the progress of the project at various stages. Development finance is released in instalments at agreed milestones as the project progresses and this requires careful continuous monitoring.

Exit Fee

Lastly, lenders often charge an exit fee for development finance. This could be imposed by way of a commission on the entire value of the loan, a fixed fee agreed when the loan was taken out or a percentage of the total value of the completed project.

Coronavirus Development Finance

Property Development Restriction Relaxations Draw a Mixed Response

Boris Johnson has confirmed details of an overhaul to planning permission requirements and restrictions, which will give housing developers and homeowners alike more direct control over their properties.

Despite facing accusations of having unnecessarily delayed essential reforms until now, the Prime Minister firmly believes the new planning system will boost affordable home availability across the UK.

“We’ve got fantastic builders that do a great job but for some reason or other, and planning has a lot to do with it, it takes far too long to build a home in this country,” he said.

However, some have warned that the alterations to existing policy could lead to a dangerous loss of control at a local council level, while at the same time leading to an influx of “bad-quality housing” on the market.

The statement from the government suggests that the new rules will reduce both the amount of time it takes to complete housing development projects and the number of planning applications that are declined. The result of which, according to the Prime Minister, being greater affordable housing availability and the opportunity for more first-time buyers to get on the property ladder.

Reduced Local Influence

One of the main sticking points for critics of the new scheme is the way in which it will limit local influence, where planned property developments are concerned. Housing Secretary Robert Jenrick confirmed that those in the locality of a planned development would still be given a “meaningful say” at an early juncture but would not be able to block housing development schemes at a later date.

Mr Johnson said that the removal of red tape would make it much easier for developers to complete projects, resulting in far more affordable housing becoming available across the UK.

By contrast, Labour leader Sir Keir Starmer argued that this reduction of local influence could prove harmful for the housing market, while highlighting that the new rules make no direct mention of the need for affordable housing.

“This is a developers’ charter, frankly, taking councils and communities out of it,” he warned.

“And on affordable housing, which is the critical issue, it says nothing. In fact it removes the initiatives that were there for affordable housing.”

His sentiments were shared by the President of the Royal Institute of British Architects, Alan Jones, who stated: “While there’s no doubt the planning system needs reform, these shameful proposals do almost nothing to guarantee the delivery of affordable, well-designed and sustainable homes.”

Eased Planning Permission Requirements

The government also recently confirmed a series of new planning measures, which from September will enable homeowners to conduct certain home improvements and alterations without the need for planning permission.

Developers will also be permitted to convert various different types of commercial premises and business properties into homes, though critics argue that such conversions often result in cramped, low-quality residences that are subsequently sold or let out at disproportionately high prices.

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