Bridging Loan:- Home builders north of the border press government to re-open sites

Home builders north of the border press government to re-open sites

Published: May 15, 2020

by: Hank Zarihs

Bridging Loan News:- Scotland’s strict lockdown on building sites needs to be lifted to help meet housing supply and save jobs and businesses, urges a key trade body.

Homes for Scotland, HFS, has written to the first minister, Nicola Sturgeon, requesting for a phased return to work to allow 6,000 largely completed homes worth £1bn to be finished.

Among the 20 signatories are managing directors and chief executives of some of the UK’s largest housebuilders including Barratt Homes, Taylor Wimpey and Persimmon.

HFS chief executive Nicola Barclay said: “The Scottish government’s recently announced short-term loan facility for SME home builders is welcomed and will provide a lifeline for many, but there is no escaping the fact that the long-term survival of all these businesses depends on their ability to get back on site and build homes, for both owner-occupation and rent.”

She said a recent survey of HFS members showed three quarters believed they only had enough funds to sustain themselves for a further two to three months.

Product	Max LTV	Up to 50% LTV	50.01 – 65.00% LTV	65.01 – 75.00% LTV	Term & Repayment	Arrangement Fee
Residential Including Light Refurbishment	Up to 75% Lower of PP or MV	0.43% pm	0.53% pm	0.60% pm	Maximum term 24 months No minimum interest or ERCs Interest Fully Rolled Up, Part-Rolled Up or Serviced (subject to affordability) The net advance will be less total potential interest over the term with the gross loan calculated as interest for the entire term and the arrangement fee added.	1% -1.5% Full fee added to the loan.
Semi Commercial Including Light Refurbishment	Up to 75% Lower of PP or MV	0.6% pm	0.6% pm	0.6% pm
Commercial Including Light Refurbishment	Up to 70% Lower of PP or MV	0.75% pm
Residential Heavy Refurbishment	Up to 75% Lower of PP or MV	0.60% pm	0.65% pm	0.7% pm
Commercial and Semi Commercial Heavy Refurbishment	Up to 70% Lower of PP or MV	0.83% pm	0.83% pm	0.7% pm

“As we see the first sets of figures being released about the financial impact of the lockdown, we can be sure that the full impact is still to be felt. Our industry contributes significantly to Scotland’s social and economic wellbeing and we are ready and willing to re-open safely with additional measures in place to help protect our employees and customers, while also supporting the struggling economy,” said Ms Barclay.

Re-opening of sites can be done safely

The letter sent to Ms Sturgeon points to the detailed procedures developed by industry to ensure that activity can be safely recommenced as soon as the green light is given.

HFS has pointed out if the 6,000 homes, which are nearly finished, could be completed this would be a significant contribution to the country’s 50,000 affordable homes target by 2020-21.

Ms Sturgeon said on May 7^th Scotland’s lockdown would be extended for another three weeks and only essential building repairs and work for the NHS and emergency services would be allowed.

HFS said the practicalities for re-opening housebuilding sites had been fully addressed. It pointedto large companies in England using established and agreed safety policies which could be shared with its smaller home builder members.