Unlocking development sites matters more than finding them – Syrett

From where I sit, the bigger challenge isn’t finding sites. It’s keeping viable ones moving.

All too often, we are seeing viable schemes falter as they become tangled in a web of planning delays, changing regulatory requirements, funding complications and shifting market conditions. Even when sites have strong fundamentals, clear local demand and an experienced developer behind the project, they can become stuck somewhere between concept and conclusion.

Most viable sites don’t fail because the opportunity isn’t there. More often, they stall because circumstances change during delivery.

So how can brokers and lenders help developers to navigate that?

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Changing paths

Very few projects end up looking exactly like the original plan, but being able to adapt to shifting requirements can make all the difference.

For example, we’ve worked with developers whose planning permission for a residential scheme has been refused, prompting them to switch to commercial use or restructure the development to meet the local authority’s requirements.

Working with a lender who can support those changes, but also adapt the funding itself, is equally important. A case we worked on in Manchester demonstrated that well. HTB funded the original land purchase, then a Gateway Two bridge facility, refinanced the bridge when the Gateway regulations changed, before subsequently approving the development finance needed to make a success of the site.

Lenders who support a site from acquisition through to delivery can be key allies.

If we are to push on with building the homes and business premises needed, then developers need to be able to adapt, and to work with those who are similarly nimble in finding solutions, even if they differ from the original plan.

Understanding local nuances

Local knowledge often makes the difference when it comes to unlocking stalled sites. Understanding how a particular planning authority approaches development, alongside local demand and delivery conditions, can be a real asset in finding the right way forward.

Brokers can’t have that sort of in-depth knowledge of every area in the country, which is where lenders need to step up. Funders with a genuine presence in different areas, and the muddy boots to prove it, can not only assess cases in a more balanced way but can also provide insight that helps keep projects moving.

Unlocking not just this site, but the next one

One conversation we’re having regularly with developers isn’t about a lack of opportunities. It’s about maintaining enough momentum to pursue the next one. If a project stalls, that doesn’t just spell trouble for that build, but the next one after it. After all, small developers don’t have the sort of cash flow to pursue every opportunity as and when it emerges. They often need capital released from the current project before they can commit to another.

For many SME developers, success isn’t simply about completing one scheme. It’s about releasing capital quickly enough to move on to the next opportunity.

If brokers and lenders can work together in supporting developers to unlock these sites, then that spells good news for the rate of housing development more generally, beyond the specifics of the current deal.

This is where revolving credit facilities can be particularly effective. Having a facility available that developers can draw on as new opportunities emerge can mean slower or stalled sites don’t put the handbrake on their ambitions or abilities. Not all funders offer these facilities or even understand how to utilise them to their potential, so it’s important for brokers to identify the lenders who do.

The importance of specialist expertise

Specialist asset classes such as purpose-build student accommodation (PBSA), care homes and hotels can be particularly susceptible to becoming stalled schemes. As they aren’t traditional residential projects, developers may find themselves facing additional scrutiny from local authorities – over everything from transport links to the potential economic impact on the area.

That can lead to a more protracted planning process, holding back progress and resulting in frustration for everyone involved. They’re specialist asset classes for a reason. Not everyone understands the intricacies and nuances involved. Keeping these cases from dragging means working with firms who have that experience across their team, and so can identify practical solutions that help keep schemes moving.

Keeping development moving

There will always be schemes where progress slows or stalls, but now it’s happening more often than it should. Unlocking more sites won’t come from a single policy change. It will come from brokers, developers and lenders working together to keep viable schemes moving when circumstances change.

If we’re serious about increasing housing delivery, that’s where I believe we can make the biggest difference.