Positive messages for 2016
Wolsey wants to support Housebuilders and developers who want to grasp the opportunities and be part of the residential housebuilding programme the Government so much wants to see happen in 2016.
The Government is stating it is opening the way for smaller developers to buy sites in England with planning permission in place. And it wants to see 40% of the new build aimed at first-time buyers. The Prime Minister is claiming it a "huge shift in government policy".
To make your schemes happen look to Wolsey funding as a source of residential development finance.
Finance for Housebuilders – £2.3bn Injection from Government's Nov 2015 Spending Review.
Without considering for too long the science behind the Chancellor's headline target of 400,000 new homes, this is a time for housebuilders to be positive. The Government is stating that it wants to create an environment that will give confidence to funding residential development rather than stifle it.
This attitude and approach will influence the reforms to the planning system and local decision making to enable more housebuilding schemes to get off the ground at a pace that reflects demand.
As in any market, residential developers and their funders want to see demand sustained. So we look forward to the opportunities for starter homes and are pleased with the increase in the support for first time buyers in London, through the Help-to-Buy scheme offering interest-free loans worth up to 40% of the value of a newly built home.
The change to stamp duty from April 2016 for buy-to-let investors is an important announcement for residential developers as one would expect to see a rush from that sector of the market prior to the legislation coming into effect. In the longer term the levels of duty raised will no doubt influence how this surcharge will develop. However, after April next year, the expectation would be demand will reduce.
Funders, housebuilders and residential developers alike should generally be positive about the focus of the Government and the support for the sector through the messages coming from The Spending Review.
The value of specialist lender
Housebuilder Magazine covered this story of a Wolsey client which illustrates how, by going to a specialist financer for housebuilders a developer can open the way to successful development.
Paul Tobin MD of Riverside Construction, Hereford, knew he had a good scheme on his hands along the bank of the River Wye, but the residential development funding he required was just not forthcoming from traditional lenders. So, when Paul first met up with Chris Foulkes of Wolsey, his problems were not so much with how to create the foundations to build his scheme, but more how to create the foundations to fund it.
Wolsey knows about housebuilding. Chris himself comes from a long and successful career in housebuilding and residential development and he now advises developers looking for funding solutions. It was his experienced eye that enabled him to see the opportunity.
Picking up the story from Paul's point of view: "After 18 months talking to brokers and banks I finally met Chris on site, and with his developer's eye for the opportunity Chris could see what could be achieved on my site. No other lender had had this vision, and I finally found myself with the funding I needed. Wolsey have proved to be the development's lifeline."
Chris went to work to put together the financial package which has financed a five story timber frame that has just been erected onto a reinforced podium above the floodplain of the River Wye to create 18 spacious two bed apartments.
"50% reservations at this stage, with a completion date of Spring 2016, is fantastic and I think justifies Wolsey's faith in funding my development," concludes Paul.
A Market for Most
Housebuilder Magazine reports that specialist lenders continue to offer a lifeline to smaller developers struggling to get the finance they need. In an interview with Housebuilder, Stephen O'Brien, MD at Wolsey, explains: "We have a speed of response that means developers can be confident they can undertake development and secure sites with planning in an efficient manner. We can also structure funding in stages, in a manner that will mean you end up focusing the financing where it needs to be focused. We understand developments from a developer's perspective and can see potential where others can't."
Housebuilder Magazine, 2015