Government finance scheme for house builders
PUBLISHED: 15:25 03 June 2014 | UPDATED: 15:25 03 June 2014
DEVELOPERS are being urged to act quickly to benefit from a government financing scheme for house builders.
The £525 million Builders Finance Fund, which recently launched, is designed to help re-start housing developments that have slowed down or stalled due to a lack of funding.
Says Michael Beadel, a partner and chairman of Exeter-based Stephens Scown LLP and a specialist in commercial property: “The Builders Finance Fund could provide much needed investment for smaller house builders, which may have struggled to finance their projects in the past. The Fund is only open for a few weeks and I would urge developers and house builders in the South West to act quickly.
“Building projects are expected to be prioritised if they appear likely to achieve an early start date, offer value for money in relation to the number of houses being built and have a good prospect of investment recovery.
“I have been in contact with a number of high street banks and it seems that the initial response is favourable and that clearing banks will, in the right circumstances, count an equity stake from the government as being part of the matched funding to meet their lending criteria,” continues Mr Beadel.
The BFF is for developments between 15 and 250 units. Funding will be made on the basis that it is recoverable and will usually be in the form of a loan with rates of interest from 1.48 per cent to 10.88 per cent, depending on the nature of the scheme.
Funding via equity investment will also be considered, with the government expecting to recover the capital invested plus a return proportionate to the investment risk.
Expressions of interest are to be submitted by 12 noon on 25 June, 2014 to the Homes and Communities Agency.