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New life for mothballed sites

publication date: Aug 31, 2011
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A number of property schemes were mothballed following the property slump and are now being bought as funding and grants become available.

Developers are gaining confidence in the market and reviving dormant schemes as rent prices hit an all time high. House prices also increased 0.8 per cent in April representing the largest monthly growth since January 2010. The Centre for Economics and Business Research predicts the cost of an average home will gradually rise 16 per cent in London as the market returns to growth.

Chris Baguley (right), MD of Bridging Finance Limited, a provider of bridging loans, said,

“We’re seeing increasing numbers of dormant property development schemes being revived. The property market is starting to pick up again as investors gain confidence and secure funding. We’re lending to developers who downed tools during the recession and are now completing existing schemes as well as property professionals who have bought sites after the original owner wants
to offload the site or they can’t get available funding.

“News of predicted house price rises in the next couple of years means developers are snapping up opportunities to buy developments that have been idle. They are now more confident that when the development has been revived, they will be able to sell on or let the properties and achieve a good yield.

“We’re seeing lots of companies coming to us through our professional partners for bridging loans so they can purchase schemes as quickly as possible and then get long term funding in place with their traditional lenders.”

Property developer UK Land and Property recently revealed it will complete the Sarah Point scheme in Manchester, which stalled in 2008 following the demise of the property developer. The revival has been made possible by a £2.5m grant from the Homes and Communities Agency.