Shawbrook Bank, a specialist lender, doubled the number of loans it made to property developers in the 12 months to April, reaching its target to lend £1bn in development finance almost a year early.
The bank, which supports developers across the UK buy assets for residential and mixed-use schemes, provided 92 loans over the period at a value of £380m up from 44 (£180m) in the previous 12 months.
Appetite for new developments accelerated through the pandemic resulting in a significant rise in funding requirements, particularly among smaller developers that the bank says are underserved. Its loan volume to developers with debt requirements below £2.5m almost tripled, funding 49 projects at a value of £56m.
The milestone follows the bank’s acquisition of RateSetter’s peer-to-peer funded development finance business last December as it focuses on supporting more smaller developers.
Shawbrook says that this increase in scale and capacity, together with the launch of Cloud Lending – a Q2 Company and a new loan management platform – and record numbers of repeat customers, positions the bank well to accelerate its growth strategy.
Terry Woodley, managing director, development finance at Shawbrook Bank, said: “Reaching £1 billion in development loans represents a significant milestone for our business. The fact we have achieved it in less than five years is a testament to the strength of our product, the expertise of our team and our commitment to supporting developers across the sector through challenging periods.
“Appetite for property endured the pandemic. We’ve seen strong demand for funding from large developers delivering significant eco-developments and regeneration projects, to the smaller developers that need a specialist lender to understand how they operate and can work with them as they deliver schemes concurrently.
“Our customers are increasingly pushing boundaries to tackle the UK’s development challenges. As we target the next £1bn, our focus will be championing the innovation that will ultimately lead to more sustainable and affordable developments in the years to come.”
Growth in Shawbrook’s development finance portfolio in the 12 months to April was particularly strong in Bristol and the South West, which represented 25% of the total lend compared with the South East 30% and the Midlands 11%.
The bank has supported a total of 238 new developments in reaching its £1 billion lending milestone, delivering 3,500 residential houses and flats, 601 commercial units and more than 1,000 student rooms.