Oblix Capital believes finance for SME developers is in short supply when compared to pre-2008 levels.
The lender was commenting on research by Funding Options which showed that SME housebuilders had not benefited as much as the larger players from the improved market conditions.
Rishi Passi, CEO of Oblix Capital, said large and established developers are well on their way to recovery while the impact of the financial crash is still being felt among SME housebuilders.
“The lending landscape remains subdued, with finance for SME developers in short supply among the mass market compared to pre-2008 levels, such that only 27% of homes in the UK are now built by low volume housebuilders,” said Rishi.
“For this figure to rise, finance providers need to improve their flexibility and fasten the pace of loan provision to meet the specialist needs of SME developers.
“Only then will smaller firms be able to carve out a place in crowded markets such as London and the South East, and provide much needed homes across the regions.”
In reaction to the latest ONS House Price Index which showed another rise in house prices, Rishi said: “High volumes of mortgage activity and a shortage of properties across the country meant that prices continued to rise through November, and this situation is unlikely to change in the short term.
“Better job prospects, wage improvement and recurring delays in interest rate rises mean that it’s likely this surge in house sales and price inflation will continue, for the meantime at least.
“Further investment is needed to encourage housebuilding, stem the supply imbalance in crowded markets, and ensure that small and medium-sized developers have access to the finance they need.”
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