Professionals expecting bank funding for development to dry up

Over a third of property professionals (37%) are anticipating that it will become more difficult for property developers secure funding from banks over the next two years, according to research from Fitzrovia Finance. As such 60% of those surveyed said they believe property investment platforms and challenger banks will take market share from traditional lenders in the property development finance market.

Brad Bauman, CEO of Fitzrovia Finance, said: “Property investment platforms are growing their market share of the real estate development finance market and our research suggests this could be further fuelled by traditional lenders becoming less able to lend in this sector.

"While, there are many different property investment platforms for investors to choose from, they need to ensure they are comfortable with the ones they use in terms of their experience of the real estate market, their focus on risk management and their track record for delivering competitive risk-adjusted returns.”

Of those who believe it will become harder to secure property development finance from mainstream lenders, 82% said it will be because of difficulties caused by Brexit, and 55% said it will be due to the financial health of mainstream lenders coming under greater pressure.