Bridging Loans News:-Clarity over which construction sites should stay open and which must close is essential, the industry has urged.
Construction Industry Council, CIC, chief executive, Graham Watts, said work to make good unsafe buildings or dangerous structures should continue.
“In the absence of firm advice, some construction companies are taking matters into their own hands and closing for the foreseeable future or until there is more clarity. It is currently a matter of mess and muddle,” said Mr Watts.
Taylor Wimpey, Galliard, Travis Perkins and Saint Gobain have already closed their construction sites. Mr Watts stressed sites needed to be prepared for closure and left in a way to make them safe and secure.
| 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 | ||
However, the CIC said some projects should continue such as essential repair and structural work.
“It would be incredibly dangerous for all construction sites to close, but it is also incredibly dangerous for all construction sites to remain open,” said Mr Watts.
Making safe roofs with loose tiles, chimney stacks and weathering was given as an example of the sort of work which ought to continue.
The CIC also advises general building control work for NHS properties and emergency services such as the police and fire should carry on.
Critical maintenance work on buildings of businesses involved in the NHS supply chain such as manufacturers making ventilators should be done.
Mr Watts said: “If construction sites remain open, and my argument is that they should only remain open if the work is critical, then construction work should only continue if it can be carried out under the guidance issued by Public Health England without compromising safety and health.”
He said the CIC was working with the government to have a clear message over what was essential and what was not essential in the same way as it has done for the retail sector.
The chancellor, Rishi Sunak’s taxable grant of up to £2,500 a month was seen as a step to help the self-employed and prevent them from risking their lives by working on non-essential projects.
The amount will be based on 80 per cent of their average monthly income based on their last three tax returns.
The Federation of Master Builders, FMB, chief executive, Brian Berry, said construction workers would be taking a ‘collective sigh of relief’.
“Building companies will now also be able to close sites to protect workers and public health without having to worry about the losses faced by self-employed workers on those sites. We now urge the Treasury and HMRC to ensure that all support packages are up and running as soon as physically possible.”
But business consultants EY said the grant only applied to those earning less than £50,000 a year.
EY head of personal tax, Tom Evennett, said: “There will be a group of taxpayers who are just over £50,000 – such a hard cut-off could be seen as rough justice.”
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Help for owner-directors who cannot furlough themselves and the recently self-employed is less clear. Brokers Hank Zarihs Associates said development finance lenders would be keen to see these people helped too otherwise many SMEs might face going under.