2015-12-31-莱坊-UK_Residential_Development_Finance_Report_2016_4页_1mb

Summary of Knight Frank's 2016/2017 Residential Development Finance Report

Key Highlights

• Post-EU referendum, market fundamentals for residential development finance remain unchanged despite political and economic uncertainty. Lending activity increased, with over two-thirds of respondents seeing business growth since the vote.
• London remains the primary focus for development, but regional markets, particularly the South East and Midlands, are experiencing significant activity growth. The proportion of lenders operating in central London decreased from 78% in 2015 to 60%, indicating a slight slowdown.
• Loan-to-value (LTV) ratios are expected to fall for some developments as lenders adopt a more cautious approach amid Brexit uncertainty, potentially increasing developer equity and reducing leverage levels.
• Build-to-rent developments are increasingly attractive due to flexibility and faster build periods, with over 80% of respondents willing to fund them. Larger schemes (GDV > £100 million) also saw increased interest.
• Activity in London's commuter belt and outer London markets is rising, while the South East, Midlands, and North of England show growing residential development finance. This reflects house price growth outpacing central London.
• The outlook for the sector is positive over the next 12 months, with expected increases in business activity across all regions. Post-Brexit, activity in outer London is likely most affected, but alternative lending markets are filling gaps in traditional financing.
• Overall, despite Brexit concerns, the residential development finance sector is viewed as attractive for investors due to ongoing housing demand and policy support.