2:28 PM 12th February 2020
£1bn Fund Will Boost Property Development In Yorkshire
Image by Сергей Корчанов from Pixabay
Property developers in Yorkshire are set to benefit from the launch of a new £1bn fund designed to increase the supply of property development finance to the region.
GBB will offer secured property development loans of between £1m and £5m, with 90% of lending supporting regional property developers and SME construction companies.
The bank plans to support residential property development projects of around 10 to 40 houses and commercial properties of between 1-3,000 square metres, across the Northern Powerhouse regions. It estimates that this will support the development of over 12,400 residential properties and over 500 commercial properties.
Steve Deutsch, GBB’s Chief Executive Officer, said: “Small housebuilders are essential to building the homes this country desperately needs but they often can’t access affordable finance. Our ambition is to become an engine of economic growth for regional SME developers by providing bespoke secured finance underpinned by long-term relationships that build trust and generate repeat business.
“This will be funded by highly competitive fixed-term savings products, aimed at customers looking to deposit between £5k-£100k of savings. We want to be a reliable source of income for savers in the easiest possible way. Our lack of legacy systems or branches and a model that is supported by modern technology results in a low-cost income ratio that benefits customers and investors alike.”
The property development fund is part of an overall lending plan of £2.9bn with around £2.6bn dedicated to supporting regional property developers and small constructions companies. A total of £2bn will be lent across the North, Midlands and Scotland.
A lack of development finance has been identified by the government as a barrier preventing smaller builders from delivering more. GBB believes that its approach will lead to an increase in the demand for finance from SME property developers and construction companies.
GBB is led by an experienced management team and has formally applied to the Prudential Regulation Authority (PRA) for a licence to trade as a bank. It intends to provide tailored lending to regional SME property developers for both residential and commercial property development, and fixed-rate savings products to retail customers.
For savers, highly competitive fixed-rate deposit rates will ensure strong appeal and that customers achieve competitive returns.
Chief Lending Officer for GBB Stephen Henman, said: “Our key differentiator is our regional and property development focus combined with a relationship-centred approach, which is unlike anything else on the market. This, combined with our specialist underwriting capabilities, local knowledge and market-leading, cloud-based technology, puts clear water between other providers and us. We hope that this will lead to an increase in property development in our target regions.
“Our locally based Relationship Managers will be dedicated to onboarding customers, understanding and managing their ongoing needs and gathering market intelligence to ensure our support evolves with our client requirements. We value repeat business and see the benefit of long-lasting relationships for the customer and the Bank. As such customer service has been placed at the heart of this new GBB proposition to drive strong returns from the outset for our investors.”
Headquartered in Newcastle-upon-Tyne, new premises are currently being secured that will allow GBB to triple its employee headcount to more than 60 in readiness for launch.