Development Financing News:- Builders merchants are being urged to support the construction industry supply chain by their own trade body with the publication of new branch operating guidelines during the covid-19 restrictions.
Builders Merchants Federation, BMF chief executive John Newcomb said it was important to help the sector as more building sites start to re-open.
“We have worked with the industry to develop a new operating model to minimise the risk of virus transmission. The new model centres around trade customers using call and collect, click and collect and pre-arranged orders, with no public access into branches.”
The branch operating guidelines set out how to maintain the two-metre social distancing between staff and customers with detailed cleaning routines to avoid transmission of the virus.
| 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 | ||
“The safety of merchant staff, suppliers and customers is paramount and every merchant must make the best decision for their individual business. We hope these new guidelines will show how risks can be managed if these safe systems of work are in place and remain effective until further notice,” said Mr Newcomb.
Supply chain starts to get back into action
The BMF has also created a list of which of its builders’ merchant members are currently open. Out of the 241 firms who responded 12 per cent were fully open, 46 per cent partially open and 42 per cent open.
Development Financing by HZA
Brokers Hank Zarihs Associates said the closure last month of major merchants such as Jewson and Travis Perkins the day after the lockdown started had led to the shutdown of many construction sites.
The brokerage added development finance lenders backed the government’s approach to keep sites open wherever possible so new homes can continue to be built to meet housing shortages.
The BMF has also created a list of its supplier members who are currently open. Nearly three- quarters of those who responded said they were open with 15 per cent partially open and 11 per cent closed.