Lloyds Bank: Laying foundations for growth in the property sector
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Paul Varley, Senior Manager SME Banking, Lloyds Bank Commercial Banking
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There’s no denying that the property sector has been through a difficult period over the past few years, adding pressure to SMEs operating in what has always been a highly competitive industry. But as the wider economic recovery across the UK has continued to pick up pace, there have also been encouraging signs of growth for property developers and investors alike. In October average UK house prices reached a record high, as demand for housing continues to grow. Support for growth There have been several initiatives to help stimulate growth in the property sector over the past year. The Government’s Help to Buy equity loan scheme was launched to provide £3.5 billion of additional investment to help people into home ownership, with the aim of helping up to 74,000 home buyers of both new and old properties, as well as providing a boost to the UK’s construction sector. As the scheme was made available to all those looking to purchase a new build home, the focus has been very much on increasing the country’s housing stock. It’s important to ensure that economic growth and rising confidence translates into actual movement on the ground, encouraging first-time buyers to take the leap of buying their own home. But equally, it’s vital that developers have access to the funding that they need to break ground on these projects, to ensure that they are able to reap the benefits of these schemes themselves. Earlier this year we supported a property development near Wentworth, Yorkshire, providing an £800,000 loan under the Government-backed Funding for Lending Scheme (FLS) to help the completion of the project. Rockingham Homes had neared completion of the five and six-bedroom homes in Upper Haugh while with a previous lender, but when that lender began to divest from the property sector the company approached Lloyds Bank Commercial Banking to refinance the project, enabling the business to secure the sale of all of the houses. Not only did this ensure the success of the business’ first venture, but it also helped to save them a considerable amount of interest through the FLS discount of one per cent on interest payments on all loans, which is available to customers across all SME sectors. Since launching our FLS offers in September 2012, we have committed over £6.3 billion to our SME customers. Time to act The October Lloyds Bank Commercial Banking Purchasing Managers’ Index confirmed these positive trends in economic performance, revealing that the average combined business activity of the English regions had remained in growth for all of 2013. In Yorkshire, employment growth has also been recorded for five consecutive months, showing that the growth in confidence had begun to translate into positive results, as firms began recruiting additional staff to boost their capacity to meet growing customer demand. Whatever a business’ situation – whether they are looking to undertake a new property development or take advantage of new investment or growth opportunities – it is important to explore all the opportunities available and be confident in the fact that there are forms of support out there to support SME growth. More articles in
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