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Peer2Peer Finance News | September 23, 2019

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EasyMoney warns Brexit uncertainty is restricting finance available to developers

EasyMoney warns Brexit uncertainty is restricting finance available to developers
Marc Shoffman

A RELUCTANCE to lend among mainstream banks has led to a fall in the number of new housing developments given planning approval for the first time since 2011, EasyMoney claims.

Analysis of government data by the peer-to-peer property lender found the number of residential planning approvals hit a three year low in 2018, falling by four per cent to 47,500 last year from 49,600 in 2017.

Further analysis of Bank of England data by EasyMoney revealed that the value of outstanding bank lending to property development businesses fell to £14.5bn in November 2018, down from a peak of £35.9bn in November 2013.

Read more: EasyMoney: Savings decline “worrying” in Brexit climate

Read more: EasyMoney: Lack of funding is curbing efforts to tackle housing shortage

Andrew de Candole, chief executive of EasyMoney, said Brexit-related uncertainty is leading to banks reducing their lending to property developers, forcing them to postpone new developments.

“Britain desperately needs new homes – but developers don’t have the financial firepower to make it happen,” he said.

“Until Brexit is sorted and some certainty is provided, the funding from mainstream lenders required to get projects going is unlikely to start flowing.”

“Developers have the land and the demand for homes is there, but the increasing lack of support from lenders is making it difficult to get projects moving.”

Read more: EasyMoney calls for cash ISA risk warning