The ASC Blog
The housing market is recovering, but the banks need to do more!
The banks keep talking about how much they are willing to lend to small businesses, but what about lending in the property sector.
The housing market has continued to show signs of recovery. According to Right Move’s House Price Index, asking prices for UK houses have increased by 5.5% over the last year, with the positive outlook set to continue. Commenting on the housing market in August, Communities Secretary Eric Pickles said it had "turned a corner". Others are already talking about another property bubble.
There is a reason for that. Despite the trends, it can still be hard for businesses to raise the finance needed to undertake a property development scheme. Lending by the banks to businesses shrank by £3.3billion in July of this year. According to our research lending to small property developers has come to a near standstill with maybe a handful of banks being prepared to support this area of the economy.
But we think that property development is now a crucial part of the recovery, if the country wants to avoid a bubble – one of the ways to do this is to support property development schemes as this will help to increase supply!
For more information about property finance, click here to speak to your local ASC Director