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
Wolsey comment on the July 2015 Budget
There was little in the budget to reflect on for funders of residential development. It will be interesting to see the impact of the taxation amendments to buy to let on lending. But, given the wider strategic issues on planning , resource requirements and development funding Wolsey do not see it will impact significantly either way on new build nor our speciality of finance for housebuilders.
At the same time, Government figures show a slowing of new build homes completed in May (a drop of 5.8%) and this has prompted a response with the announcement of proposals for a planning 'shake-up' for Brownfield sites to potentially fast track housing projects on disused land. Any such change can only be welcomed. From a residential development finance perspective, Wolsey look forward to receiving any enquiries from housebuilders in a position to benefit and who are seeking development finance for Brownfield sites they find they can now fast track through the planning process.
A grade one opportunity
Barnett Developments, with residential development funding secured through Wolsey Securities, is undertaking a significant conversion scheme in Bristol that is having a big impact on the regeneration of a classic Georgian Square in the heart of the City.
But, it appeared funding had initially been hard to secure. Chris Foulkes, Development Director for Wolsey Securities, explains, "on meeting the developer, we recognised immediately the funding opportunity, where it appeared other funders had not. Despite the challenges of having a Grade One listed facade and in a location that had been neglected for some years, we saw that it was clearly a brilliant conversion scheme and we were able to move quickly to secure the required finance."
17 luxury apartments have been created at Portland House, Portland Square, ranging from one to four bedrooms. Foulkes adds, "this scheme is the first of a number that are transforming the locality and desirability of this central location, which is clearly manifesting itself in the high quality and rapidity of the sales performance. A Grade One opportunity for all involved."
Housebuilder Magazine, 2015