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Lenders respond to changing conditions in building construction

Posted: January 2, 2018

Many bridging finance lenders arrange bridging loans for building developers. For new build developers, a loan can finance the purchase of the land, and help towards construction costs. When properties are sold, the bridging loan can be repaid.

There are many new innovations in construction techniques used by builders of residential and commercial property. Pre-fabricated units are increasingly being used. Parts of a building are constructed off site ready to be assembled onsite. This speeds up construction time but means that a lot of the costs of construction and materials occur earlier than traditional building construction where everything is built onsite.

Modular pre-fabricated houses can be built in a third of the time compared to bricks and mortar construction.

Some experts predict that the cost of building materials will rise after Britain leaves the European Union.

The changing nature of construction has caused confusion in some lenders. Specialist bridging lenders are aware of the changes in construction that could affect the amount of a loan and the time that developers need before paying the loan back. They can restructure their lending conditions accordingly.

Some lenders visit development sites to get first-hand knowledge of the project rather than rely solely on the loan application documents. Some home builders new to modular construction may not produce quality houses. A bridging lender can inspect the properties and suggest improvements if necessary.

A bridging finance broker can arrange a bridging loan to finance both traditional and pre-fabricated property construction.