At the recent Alternative Funding Forum, lenders were asked for their stance on lending without planning permission.
The event, held in London last week, invited discussion from attendees on the topic of alternative funding solutions.
The panel of four lenders included: James Lloyd of Mayfair Capital, Tomer Aboody from MTF, James Bloom from Regentsmead and Victor Librae from Urban Exposure.
One of the forum’s most engaging discussions was whether or not the panel would lend without full planning permission.
Victor Librae, Director of Urban Exposure, stated he would do a deal without planning permission only if the fund recovery path was fully clarified. He said: “If we do do a deal which has a planning risk associated with it, no matter what the planning risk is, we are always going to want a profit share.”
James Lloyd, Director of Mayfair Capital said that the lender would take limited planning risk as the ‘oven ready’ deals are often of limited availability.
James Bloom, Chief Executive of Regentsmead, added to the discussion, he said: “We will lend on an existing property without planning if somebody is going to change the planning on an existing property.”
Picture: Guest speakers (Left to right) James Bloom, James Lloyd and Victor Librae
James added: “In terms of land, we won’t lend without planning, we’re not central London focused as you can see, so there has to be at least outlined planning for us to lend.”
Tomer Aboody, Director of MTF said his stance was: “We lend on the current value.” He clarified that MTF lends on what the property value is today, with the planning in existence.
The event, which was hosted and sponsored by CMS Cameron McKenna, allowed investors and developers to pitch questions and potential business opportunities to the lending panel.
UK Property Professionals (UKPP) founder, Mark Antscherl, said he was delighted with the response to the forum.
He said: "The London event was part of a programme of funding forums we are running across the UK and links in with our drive to assist our members with their funding requirements.”
The open discussion during the event also lead to a burning question from one audience member, who asked the panel what their approach was to lending high up on the risk-curve.
Victor started by stating: “The only way we would do a deal with no money at all in the deal is if there is a significant [amount of equity] or this property has gone up and died and they are putting that property at a lower value.”
Victor also added they would put in good construction milestones and rely on good developers.
James Lloyd agreed with Victor saying: “The more skin in the game they have got, the better.
“London is a big city but the developers we are working with in Chelsea, Kensington, they probably only work in 15 streets in that locality, they know it absolutely like the back of their hand, so they’re delivering a product into that market that they have been doing for the last 10, 15 years, so that obviously gives us a certain amount of comfort.”
Industry figurehead James Bloom also agreed with the panel. He said: “Backing the right person in the right area with the right product, coupled with the capital they are putting into the scheme usually gives us a pretty [good] result.”
The forum was run by UKPP, the UK’s fastest-growing property network, which includes the London Property Professionals (LPP) who are represented by key property professionals.
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