Blend calls for recommitment to bank referral scheme
Specialist property lender Blend Network has called on the government to recommit to the bank referral scheme in order to help more property developers access much-needed funding.
Roxana Mohammadian-Molina, chief strategy officer at Blend, said that many small- and medium-sized enterprises (SMEs) are simply unaware of the lending options available to them.
She noted that a recommitment to the bank referral scheme could see more banks refer declined borrowers to alternative lenders, such as specialist developer finance providers.
“Currently, many SMEs simply aren’t aware of the other lending options available to them,” said Mohammadian-Molina.
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“It is particularly important to support mid-sized developers because it is often these businesses who build-out the complex and much-needed small schemes in our towns and villages that larger housebuilders avoid.
“Specialist development finance lenders have a vital role to play in supporting small and medium housebuilders, by easing the funding pressure.”
Well-capitalised, agile, and flexible specialist development finance lenders are in a strong position to lend to small and medium-sized housebuilders who need access to finance, Mohammadian-Molina added. Access to these funds could ensure that developers can keep building despite the ongoing economic crisis.
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Her comments came after the IMF’s latest World Economic Outlook reported that the UK’s economy will be the only country across all advanced and emerging economies to shrink this year – contracting by 0.6 per cent. This could lead to “further downward pressure on the supply of housing in an already stretched market, due to a lack of access to lending,” Mohammadian-Molina predicted.
“Government and industry must act now to support the housebuilding sector in a bid to ensure quality and affordability for UK tenants and renters over the next decade,” she added.
“We know that many SMEs approach their banks first for lending and when they get refused, they sometimes feel that there is nowhere else to turn for finance.
“This sometimes means that viable, but slightly higher risk schemes can become stalled due to a lack of lending.”
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