Like many other sectors, the property industry is struggling to access finance due to the economic impact of COVID-19.
With many traditional lenders taking a more cautious approach to loans and finance, developers are having to look at new ways of funding projects to meet the ever-growing demand for residential property across the UK.
To support the industry, the Government and Homes England are to launch a £250 million lending scheme.
Homes England, the Government’s housing delivery agency, is working with United Trust Bank, a sector-specialist lender, to launch the Housing Accelerator Fund.
It is aimed at small and medium-sized builders and developers and will be available under the following criteria:
- Available in regions under “greatest housing affordability pressure”
- Loan terms of up to 24 months
- Maximum lending up to 70 per cent Loan to Gross Development Value (GDV) and up to 87.5 per cent Loan to Total Development Cost
- Small and medium-sized developers can apply for funding of up to £10 million
- The average selling price should not exceed £800 per square foot
- The maximum single unit selling price should not exceed £800,000
- The minimum lending amount is £1 million.
At the launch of the scheme, Gordon More, Chief Investment Officer at Homes England, said the funding would “improve the lending landscape for SMEs by driving competition in the market, improving choice and encouraging innovation.”
Developers can find more information about the scheme and apply for finance through the Housing Accelerator Fund by clicking here.
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