When discussing what was causing delays in the property development market, Neil (pictured above, left) said that the aftermath of Covid-19 resulted in “huge” issues.

“Factories were locked down, naturally, so supply chains became compromised and inventories were depleted — and we're still seeing the effects of that now. 

“Local planning authorities are probably under resourced — [they] still have a lot of people working from home even now — and it's more difficult for people post-Covid to get consents and discharge on planning conditions than it was before.”

Uliana (pictured above, right) explained that, when developers buy sites, they rely on factors known to them at the time of purchase — such as build and finance costs — to decide what they are prepared to pay.

“In the past couple of years, the increase to material [costs] and interest rates, the slowdown in the market, and the weakening of demand effectively impacted site purchases and made those transactions unviable,” she stipulated.

“Developers are now sitting on sites that are not worth developing.”

Uliana explained that while developers could “sit and hope” that the markets would improve, some of these site purchases would have finance costs attached.

“The interest is ticking and it's eating into the profits and cash flow further,” she warned.

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In terms of a solution, Uliana suggested that a developer could pause the site, exit, and cut their losses — but not many are prepared to do this. 

“Or you can try to rework the planning,” she added, to help salvage the situation and create value on the sites, “[but] that takes forever”.  

Neil described the development industry as a bit of a rollercoaster ride. 

“It's a cyclical market, but generally property developers are quite resilient; most of them will hold their nerve and come through it,” he said. 

The struggles from the aftermath of the pandemic, however, have made the industry more inventive, according to Neil. 

“[Covid’s] been a challenge — but out of that, innovation spawned.”

The bank — which is fully operational across England and Wales, especially since the opening of its office in Leeds in 2019 —  has recently started delivering ‘development finance masterclasses’ with Uliana at the helm to educate the market. 

She explained that lots of people were eager to get involved. 

“The demand for [the latest] masterclass was insane,” Uliana shared. 

Due to its success, the masterclasses will continue and develop into other regions.

“I think HTB managed to create quite a unique proposition where we're not just saying we cover regions, we live and breathe regions,” added Uliana.

“The first masterclass was in London — but we cover all regions, so we are now looking [at hosting these in] the North and Midlands,” said Uliana. 

Looking forward, Uliana and Neil hinted at the details of HTB’s enhanced green development finance product which is expected to launch in 2024. 

“It's a combination of a discount, of course, but also some sort of specialist help that will provide guidance on how to improve energy efficiency and the performance of the buildings,” divulged Uliana.