Works have been progressed and funds are needed to push on to the next phase, but progress slows (or even stalls entirely) while an external monitoring surveyor is scheduled, visits and then reports back.

It is a process that can work but one that, in practice, introduces costly fees and even more costly delays. This anachronism of the industry is lazily accepted as inevitable, but it certainly doesn’t have to be.

How a lender structures its monitoring process has a direct bearing on how smoothly a development runs, and it is worth understanding what the alternative can look like.

The traditional pain points of construction monitoring

When a borrower takes out a development loan, funds are rarely released in one go. Instead, the loan is drawn down in tranches as the build progresses, giving the lender greater control and security, and the borrower cheaper funding by only being charged on what they draw as and when they draw it.

Typically, this relies on an independent monitoring surveyor to verify that progress: assessing the works done to date and reporting back before funds can be released.

You might think this sounds fairly reasonable — but in practice it introduces scheduling delays with long SLAs, as well as not inconsiderable recurring costs.

Furthermore, across multiple tranches, those delays compound, with knock-ons affecting things like ongoing prelims, further months of interest charges and everything else in between — and time is money!

A different approach to construction monitoring

For lenders willing to invest in the right team and structure themselves accordingly, there is an alternative approach. At Aspen, our construction monitoring is handled entirely in-house, something we realised early on would provide significant benefits to our customers.

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When a borrower requests a drawdown, our team will commit to a site visit within 48 hours. This is the very same team that assessed the project at the outset, so they understand the scheme, the borrower’s objectives, the agreed timeline and any issues that may have already been encountered in the build.

The practical effect is straightforward: within 72 hours of the initial contact, a site inspection has been carried out, paperwork has been signed and funds are in the borrower’s account ready for works to continue.

The three key benefits

Speed. No third party to coordinate, no external diary to work around. When a borrower is ready to draw down, we react.

Cost. No monitoring surveyor fees passed on to the borrower. This brings an immediate and quantifiable saving.

Continuity. Our experienced team has been involved since underwriting. They’ve seen the scheme, they know the borrower’s ambitions, and they understand how the build is intended to unfold.

Keeping the works progressing isn’t just in the interests of the developer — it’s also good for us as the lender. As the build advances and additional value is created, our exposure as lender reduces, so a project executed efficiently and in a timely manner serves both sides of the funding relationship.

Building the right team

We have built a team of people with genuine first-hand experience of development, often with personal projects under their belt. This means they bring skills beyond just understanding a BCIS cost database and reviewing a Gantt chart.

More fundamentally, they know the aches and pains of pulling a project together: dealing with sub-contractors, getting to wind and watertight, navigating unforeseen hiccups and discharging conditions. They’ve been through it all before.

Looking beyond the headlines

For developers and their brokers, the way a lender approaches construction monitoring is worth considering alongside the more obvious headline terms of a facility.

Interest rate, LTV and fees are relatively straightforward to compare but the operational aspects of works monitoring and processing of drawdowns, while less visible, can have a significant and compounding impact on the overall delivery of a project and its subsequent profitability.