20-03-2008
Property developers hit by cash shortfall
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
Property development in the UK has been negatively affected by the deteriorating market conditions surrounding credit, it has emerged.
A report by the Financial Times has highlighted a sentiment by insiders within the property development sector that the speculative side of the UK market has become frozen.
"There is no market at all for speculative development funding. You need a letting, a track record and your own equity, otherwise you might as well not bother," said a banker specialising in real estate.
Tony Edgley, international director for Jones Lang LaSalle Corporate Finance, added: "I've seen the market tighten over the past three months to the point that development finance has all but dried up."
Perhaps as a consequence of the deteriorating situation, the property investment group Assetz, next week plans to launch a new fund designed to assist builders who are having difficulty raising debt finance revenue.
Assetz is split into a number of different divisions, including those relating to finance and fund management.