What finance is available to the smaller residential developer in the UK, and what is the broker's role in arranging such finance?

This paper is intended to give the reader an overview of the current funding possibilities for small residential property developers in the UK. The main focus will be on developers of new homes but most of the principles apply to those involved in the conversion and refurbishment business who are likely to rely upon broadly similar funding arrangements. It is accepted that some smaller developers are able to finance their schemes out of their own cash flow without the need for borrowings; however, even if they are in this fortunate position, many of them opt to borrow so that all of their cash resources are not tied up in land and work in progress. Their own spare funds are then available to take advantage of opportunities to acquire land, and to secure options and conditional contracts etc. The vast majority of developers borrow to ensure that they have projects in the pipeline and at various stages of maturity. Copyright © 2004 Henry Stewart Publications