Development Finance Today has been told that some sites have been passed on to smaller developers after being purchased by larger developers.

Jordan McBriar, director at Adapt Finance, said: “We have seen an increase in this over the last few months, if not over the past year.

“It is not necessarily a bad thing, though, as it means other developers, who may not be at the top of the ‘list for deals’, get a fair opportunity to develop.”

James Bloom, managing director of development finance at Masthaven, also said he had seen some isolated examples and explained the impact this could have on the property market.

“Should this happen on a large scale basis, this could dampen down site price inflation and therefore cause the same to happen to house prices.

“We will watch, wait and act accordingly.”

Rico Wojtulewicz, policy adviser at the House Builders Association, felt that sites themselves had not been ‘drip-fed’, but developers who were ‘at capacity’ had used sub-contractors to complete projects.

“For the market this only means a slight increase in expected supply.

“Not enough projects will be new planning applications and many will be delivered in phases.”

Ashley Ilsen, head of lending at Regentsmead, said that during the recession there was a case of larger developers and housebuilders buying up good sites and sitting on them, causing a lack of supply for good quality sites.

However, this time around he didn’t think drip-feeding was going on, adding: “What we are seeing is more cases of developers buying speculatively and getting planning gains before turning them over to other developers instead of building them out.

“It shows the advantage of being well-funded in the current climate as cash is king in this industry.

“We have seen some instances of cases where the clients have clearly overpaid for a site and taken a large bridge to help with a purchase, which is one of the hazards of dealing with an inexperienced lender.”

Meanwhile, Rico added: “There needs to be a greater focus on small sites and infill, typically developed by small and medium housebuilders.

“These sites are built more quickly, within the existing infrastructure and reflect local need.

“This will deliver a more competitive market and deliver the homes people want and need.”

Jordan concluded by stating that from a brokers and lenders perspective, drip-feeding could only be a good thing as there was a wider spread of borrowers to a broader audience of lenders, which would reduce concentration levels.

“The big question is will the surveyor support an uplift in value and what dialogue will be given to the underwriter.

“To us there is a skill to buying cheap and enhancing value, by planning or even just delaying completion dates, then selling on for a profit.

“If the heightened asking price is still justifiable to a surveyor we cannot see why any ambiguity should intervene.

“It must be said, this hasn’t always been the case, though.

“It goes back to the age-old ‘commercial view’ that if a surveyor is willing to advise [and] the price being paid is correct – regardless of contract uplifts etc – then the lender should lend on value given.”