Despite this, Oblix believes there are still existing lenders, including themselves, with plenty of appetite in the development finance market following the UK’s decision to leave the European Union.

In an exclusive interview with Development Finance Today, Rishi Passi, CEO and founder of Oblix Capital, said its distribution following Brexit was greater than ever.

“At Oblix we have seen a huge increase in enquiries throughout the year, which has resulted in us funding all sorts of developments throughout the country.

“This can range from more complex purpose-built student developments, to multi-unit residential flats and houses, as well as less complex refurbishments and extensions.

“Our distribution is greater than ever, having funded developments as far north as Leeds, all the way down to Dorset.”

“We have seen a number of new entrants over the past 12 months”

Despite the Brexit uncertainty, new lenders are beginning to enter or step up their involvement in the development finance market.

“Each lender has their unique differences and we believe this can only be a good thing for the market, as it gives the developer and/or the intermediary a larger choice to pick from.

“Development finance can be a very specialist area, and it’s important that the borrower is matched with the correct lender, one that not only has the understanding and capability of funding developments, but can provide the borrower with the much-needed comfort that they will support [them] throughout the entire cycle of the development.”

“Biggest concerns since the decision to leave the EU are market instability and lending appetite”

Rishi also told Development Finance Today about the views of developers during this period of uncertainty.

“Having spoken to many of our clients throughout the past few months, it’s apparent that their biggest concerns since the decision to leave the EU are market instability and lending appetite.

“Developers generally want to concentrate on what they are best at: sourcing and developing property.

“Today, they are also having to concern themselves with the availability and pricing of finance, as well as the potential two- to three-year process in exit negotiations and what the subsequent effects will be on demand for new homes and business premises.”

“There will be some lenders exiting this space”

Rishi pointed out that there were some signs of a retraction in lending appetite in the development finance market as uncertainty surrounding Brexit begins to develop.

“It’s important to remember that this area of the market was already showing signs of deflation prior to the EU referendum, so whether the Brexit decision has accelerated this downward pressure or not, it’s too early to say, but any reduction in lending appetite from the banks will no doubt have an impact.

“Lending to the small- to medium-size developers was showing signs of growth over the past 12 months across the nation, this was partly due to growing end-user demand, house-price inflation, and the emergence of alternative lenders and challenger banks wanting exposure to this asset class.”

Rishi concluded by adding: “There have been some lenders retracting from the development finance market, which in the short term will no doubt have a negative impact, but there are still existing lenders such as ourselves who continue to have an appetite to lend.

“Like in all market cycles, there will be some lenders exiting this space, and new ones looking to enter.”