Development Finance Lunch

Attending this week’s Place North West Development Finance lunch, it was great to hear about public and private sector commitments to the housing market, both UK-wide and more specifically in the North West. Among the five-strong panel of speakers it was particularly interesting to hear what Glen Wilson, Head of Property at Lloyds Bank, and Bill Enevoldson, Chief Investment Officer at the Greater Manchester Combined Authority (GMCA), had to say about finance for regional housing developments.

Glen explained how, following the 2008 crash, a newly appointed chief executive set out a strategy for the business with a sole focus on UK prosperity. Amongst other things, this involved streamlining the business’s operations from 36 countries down to 11, with 97% of Lloyd’s income now coming from the UK. Glen outlined the continuing importance of a prosperous UK housing market for Lloyds, which is involved in both supply and demand through investment, lending and insurance. With a strong local team in Manchester, Lloyds is offering development finance to both builders and developers in the North West up to a value of £12.5m, with 25-year committed money. In an already improving economic climate, it was great to learn of these substantial financial commitments to the region’s development sector.

We also heard from Bill that the bulk of a £65m GMCA fund is being made available to SMEs, with the output less focused on profit than on creating and safeguarding jobs within the ten local authorities. Bill explained that that the fund’s advantage is its ability to turn around applications very quickly with a user friendly application process at a lower cost than banks. The GMCA has also just had a £300m housing fund allocated to it as part of the devolution deal, and is looking to fund construction finance of values between £1m and £24m, with all sectors of housing considered. We can anticipate that Greater Manchester’s newly appointed mayor, Tony Lloyd, and his elected succesores will be interested in influencing how this money is allocated. With development finance controlled more locally, it will be interesting to see whether it becomes easier to deliver housing projects across the region.