Navigating the challenges of property development

In today’s challenging market, property developers are navigating a host of obstacles, with securing funding and finding buyers at the forefront.

According to our recent research, 77% of developers cited securing funding as the most complex aspect of their business, while 75% noted that there are limited options available to developers. In addition, many developers are currently having to contend with a slow market, where attracting buyers has become increasingly difficult, putting the future of their projects at risk.

Amidst these challenges, 77% of developers have found that specialist lenders offer better support, making this an ideal time to partner with a lender who provides expertise, flexibility, and comprehensive support throughout the development process.

At Shawbrook, we offer bespoke funding solutions designed to support developers at each stage of their new build or refurbishment project. Our product suite provides the reliable finance you need, precisely when you need it:

1. Planning Assistance Loan: Designed to support developers during the planning phase of their project, whether that be with property acquisition costs or to manage their cash flow during the challenging time of accessing enhanced planning permissions.
2. Development Finance Loans: Providing bespoke facilities that are tailored to the unique requirements of each development project.
3. Development Exit Loans: These loans provide short-term flexibility to help developers navigate unexpected delays, extend the marketing period or raise funds for a new project.

Want to see how our funding works in action? Here are two recent examples of how we’ve supported developers at the planning and completion stages of their projects:

Shawbrook supports experienced developer with crucial funding to enhance development plans in Surrey

We supported a developer enhance their development project in Surrey with our newly introduced Planning Assistance Loan. Initially, the developer obtained planning to build a single property on acquired land; however, an opportunity to expand the project to two semi-detached properties emerged, necessitating enhanced planning permissions and additional funding to support during this period.

To bridge this gap, we provided a Planning Assistance Loan, allowing the developer to secure the necessary permissions for their expanded project and after six months, the developer transitioned seamlessly to a bespoke Development Finance loan with us. This project is the sixth we’ve partnered on with this developer, highlighting the strong, ongoing relationships we build with our customers.

Shawbrook delivers £10.8m Development Exit loan in just 12 days

In another instance, we recently provided a £10.8m Development Exit loan for a luxury flat development in Harrow, North London. The developer, faced with slower-than-expected sales, had only sold four out of 35 luxury flats. With the project’s original development finance lender unwilling to extend their loan, the project’s future was at risk.

Their broker, PCF Financial Services, reached out to us, and our team visited the site the very next day. Understanding the urgency, we expedited the approval process and completed the loan in just 12 days. Secured at 75% LTGDV on a 12-month term with a rate fixed over base, our intervention provided the developer with crucial breathing space to sell the remaining units.

This deal showcases not only the speed and efficiency of our Development Exit loans but also our commitment to offering personalised, tailored funding solutions that meet the specific needs of each project.

These success stories highlight our ability to deliver reliable finance to developers across the UK, supporting them from blueprint to reality, and beyond. This year, we passed the significant milestone of £2bn in funding for developers across the UK, illustrating our strength in this market and dedication to delivering projects to support communities across the UK.

If you have a project in mind and would like to discuss how we can support you, get in touch or visit our website for more information about our products.

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* Research was conducted by Censuswide between 16.04 – 03.05 2024, surveying 567 property developers aged 18+ across England, Wales and Scotland.