New scheme brings hope to local developers

A leading local commercial property lawyer has urged developers to act quickly to make the most of a government financing scheme for house builders, which opens on 14 May.

The £525 million Builders Finance Fund is designed to help restart and speed up housing developments that have slowed down or stalled due to lack of finance and the government hopes it will allow 15,000 “shovel ready” homes to be built across England.

Michael Beadel, a partner and Chairman of Stephens Scown LLP is a specialist in commercial property. He said: “The Builders Finance Fund could provide much needed investment for smaller house builders that 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 when it opens this week.

“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.”

The Builders Finance Fund 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.

Bidding for the fund will be launched on 14 May 2014 and expressions of interest are to be submitted by noon on 25 June 2014 to the Homes and Communities Agency.

Michael Beadel has an MSc in Construction Law and Dispute Resolution from Kings College, London. He sits on the advisory boards of Exeter University in Cornwall and its Environment and Sustainability Institute.

Stephens Scown has over 40 partners and 250 staff across its offices in Exeter, Truro and St Austell. For more information visit www.stephens-scown.co.uk