Based on an example loan amount of £5m over one year at a rate of 0.42% per month or 5% per annum, property developers opting for the traditional route to build would see £252,000 paid in interest over 12 months.
However, opting for the modular build route could see construction complete 30% to 50% quicker than a traditionally built development.
This could lead to interest savings of £9,000 p.m — adding up to £75,600 in a single year — for schemes finished 30% faster, or even £21,000 p.m by cutting the timeframe by 50%, totalling £126,000 saved per year.
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Nicholas Christofi, managing director at Sirius Property Finance, said: “Modular builds provide a real opportunity for property developers to maximise their profit margins due to the significantly shorter build timeframes they provide.
“The quicker a project is completed, the sooner it can reach the market and generate the income required to repay any loans taken.
“With demand for housing higher than it’s ever been, developers are also under extreme pressure to deliver and this speed often results in homes reaching the market that aren’t quite up to standard.
“Modular building is the solution to these current problems, not only allowing homes to reach the market at a far quicker pace but also providing a far greater, more consistent level of quality control in the process.”