LDS Boost - Issue 2 Summer 2023

Foreword

Since our first issue, whilst conditions have remained challenging, the collective endeavours of the market continue to impress. Builders want to keep building and, with some exceptions, lenders want to help— we know this as we have projects progressing with plenty of them!

First up in this issue, our partner lender Sancus shares their story. Where have they come from? Where are they now? Where are they going? Richard Whitehouse and Jaxon Stevens tell all and illustrate just how important SME developers are to their business; this common purpose is at the heart of our growing relationship.

Lee Jackson then introduces WholeHouse, Travis Perkins’ revolutionary new offering which allows SME developers to fully design and cost houses online. Having attended the launch event in March where we heard from an SME who was already building some fantastic new

homes in Somerset using the platform, it is clear to me that this system is potentially game-changing.

Our feature article sees us delve deep into the world of finance brokers—an expensive luxury, or more important than ever? Once you have read the views of our experienced panel, it’s for you to decide. At LDS, we work with quality brokers who package our Sales Guarantee with senior debt to deliver high geared and low risk funding, allowing developers to build more whilst reducing risk.

Rounding things off, our Investment Committee chair Gordon More shares some eye-opening market reflections including around planning and government regulation. Informed by his time as CEO of Homes England and his current work on the boards of both builders and capital providers, Gordon is always insightful and never dodges challenging or controversial matters.

Enjoy the issue, have a crack at the competition (the prize is certainly worth winning) and do get in touch to let us know what you think.

“ We work with quality brokers who package our Sales Guarantee with senior debt to deliver high geared and low risk funding, allowing developers to build more whilst reducing risk ”

Hello and welcome to the second edition of LDS Boost—bringing SMEs the knowledge and resources of PLCs.

Ben Jenkinson, Regional Director (London & South)

Straightforward with Sancus

“Straightforward property finance” is a tagline used by Sancus, and, really, that sums it up nicely.

This is a business built on the real estate finance know-how of an experienced senior team, prepared to back its judgment rather than rely on formulas.

Much like LDS, Sancus puts great value in building relationships, gaining an understanding and insight into how the people it works with like to operate. It’s a method that has served it well, with £1.2bn successfully lent in recent years, supporting an appetite to accelerate the growth of SME developers of all sizes with loans of between £1m and £15m.

Origin story

Sancus was launched in 2013 as a response to the financial crash—not unlike other alternative finance providers. Primarily, it aimed to serve real estate borrowers in the Channel Islands where two of the main high street banks were dominant.

The backing for the lender came from a mix of its own equity, high net worth individuals and family offices, all of which remain key ingredients in the mix today. The largest shareholder is the Somerston Group. A business was launched in Ireland in 2018, and a UK operation began in 2019.

Richard Whitehouse joined in 2016, becoming Managing Director (UK) in 2022. He says: “In the senior team at Sancus, there’s a wealth of experience among people who’ve been in very senior positions at important institutions, right across banking, construction and development finance.” Whitehouse’s own CV includes roles at RBS and Allied Irish Bank in the UK and Europe.

Jaxon Stevens joined in 2021 to head the sales function, with 25 years served in short term commercial lending. He says: “I like stuff you can get under the skin of, and there’s no better product than development finance for that; there are so many moving parts, and every day is different.”

Each issue, Boost will profile a trusted lending partner of LDS. This time, we spoke with Managing Director Richard Whitehouse and Sales Director Jaxon Stevens at Sancus

Richard Whitehouse, Managing Director

Jaxon Stevens, Sales Director

As to how the business operates, Whitehouse says: “We’re squarely on the side that the team are the product. We’re not about predetermined solutions, like a bank with a credit policy that measures loan quality. Our thinking is more in line with an equity provider.

“Once we commit, we like to back builders delivering homes for people who like living in them, and every action we take is with that in mind.”

The LDS relationship

Whitehouse says: “From the word go, we were impressed by the scale of the ambition LDS have. Like ourselves, they’ve assembled a good team with a breadth of experience. They’ve been generous in sharing networks and making introductions, helping us to solidify relationships, and we’ve been able to support each other in projecting each other’s presence in our sectors.”

The two businesses are literally neighbours in London Bridge, allowing for regular face-to-face dialogue around deals, markets and events.

As Whitehouse says: “It’s handy to have people there to discuss trends and how projects are performing, it all helps to build our own knowledge. At a functional level, both the capital and Sales Guarantees provided by LDS are important to us—really, the value of the relationship comes in both that and the sharing of knowledge.

“Associating closely with another business isn’t anything we, or anyone, should do lightly, as our corporate and personal brands are so important to us, so it shows how comfortable we are working with LDS.”

The borrower, and everyone keen to increase housing supply, can be the winner: “Ultimately, for SME housebuilders, there’s a lot of benefit in working with people who are able to sense-check things and cut through thinking time quickly.”

As Stevens adds: “Outside of the box thinking is integral to everything we do. At any one time, the market has issues,

whether that be a lack of equity, exit concerns, any number of things, and it’s good for us to be able to introduce LDS as a potential solution; there’s a very strong synergy there for us.”

Capital ideas

Somerston Group invested £20m in November 2020, with a further equity injection of £2.1m in late 2022. Pollen Street Capital also increased its funding line from £75m to £125m in November last year.

On top of that committed funding, which Sancus uses to underwrite new business and undrawn facilities, it also benefits from a Loan Note programme which is run by an associated company, Amberton Asset Management, and the aforementioned high net worth individuals and investors.

Whitehouse says: “We have always focused on having multiple sources of funding and, importantly, those funding sources have different incentives to deploy capital. We try as much as we can to limit the correlation between different sources of capital, because people act differently at different points of the economic cycle.

“Covid was a great example for us of the benefit of that low correlation. We had funding sources keen to deploy into UK real estate and that allowed us to write a lot of business when we know some of our competitors had to reduce their appetite due to their funding structures. In a market like today’s, we can provide reliability and certainty for developers.”

Sancus is looking to expand both the amount of business it does and the size of its deals. Whitehouse says: “We’re in growth mode; there is a corporate plan to double our loan book over the next 24 months, so we’re looking to differentiate our offering further and strengthen those key relationships, such as with LDS, to make this happen.”

“A recent example of something we’ve worked on is with a developer who, not untypically, is spread a little thin at present, isn’t cash-rich, and needed a ‘day one’ injection. We like the scheme,

we can see there’s a good exit route, and we were happy to provide a good chunk of funding,” Stevens explains.

“We’re working with a few developers who are realigning sites, and we see it as a case of looking at the challenges the market is throwing up together to find a solution.”

Moving on up?

Defying expectation, the first part of 2023 has been… OK. As Whitehouse says: “Liz Truss and Kwasi Kwarteng have a lot to answer for, but, actually, enquiries have been at record levels since the start of the year, far ahead of what we’d have predicted in the last quarter of 2022.”

That’s not to say things are easy, though: “Developers have so many complexities to deal with. They’ve gone from Covid lockdowns to a supply chain crisis, labour shortages, cost inflation, the Truss/Kwarteng issues and interest rate changes. It’s no surprise they’re being extra-diligent.

“While developers are displaying caution before pushing the button on schemes, we can definitely say now that things have at least stabilised in some of those areas of concern, such as material availability and cost, so there is a bit more certainty.

“That does still leave the issue of ‘can people afford to buy a home?’ but we’ve not seen a dilution in that area for the type of product we like: good schemes in and around nice locations.”

It comes back to the basics: there are headwinds, but the market fundamentals are still strong, and business is very much continuing for developers ready to look for solutions.

As Whitehouse says: “There are challengers for developers, but we get a lot of confidence from the likes of LDS being in the market with Sales Guarantees getting projects over the line.

“We’re engaged with developers day in and day out and don’t get any sense they’re reluctant to build—they’re just being diligent. The mood music as we read it is that developers want to progress sensibly.”

SMEs in the driving seat

This could be big. A major investment for Travis Perkins, WholeHouse is a first for the housebuilding sector, and it means that SMEs can now plan and design a bespoke digital model of a house before physically constructing it.

The model ensures detailed and accurate design, plans and material pricing from day one. Start to finish, the process can be completed in under an hour—saving weeks of work.

Based on BIM, WholeHouse has been developed by Travis Perkins over several years, in partnership with leading industry experts, including architects, engineers and planners, as well as customers and suppliers.

To contact WholeHouse directly, please email lee.jackson@travisperkins.co.uk

The portal is specifically designed for housebuilders building up to 250 units a year, and means they can bring plots and developments to life through 3D visualisation in designs that can be easily adapted, personalised and tailored depending on customer requirements.

When did the thinking for this start?

We’ve been working with partners on this for the last few years; there have been 40 manufacturers and 20-plus consultancies and designers involved in the wider design team, representing more than 500 years of industry knowledge.

In a sense, WholeHouse has been incubated over 15 years, and brings together the accumulated knowledge of the challenges facing SME housebuilders, manufacturers, subcontractors and customers. This is an industry where 2,500 players are collectively twice the size of the single largest player, but suffer from structural disadvantages. With WholeHouse, Travis Perkins is supporting them in being agile and flexible.

So, how does it actually work?

WholeHouse is based around a simpleto-use online portal that streamlines the design process, enabling builders to create costed construction drawings with accurate elevations, floor plans, specifications, cross sections and more at the click of a button—traditionally, many of these items would need to be manually costed from drawings and separate subcontractor quotes.

With the WholeHouse concept, Travis Perkins has created a new model for SME housebuilders. We sat down with director Lee Jackson to find out all about this revolutionary tool

The platform, which works in real-time, collates and automatically processes all relevant information in one place and is fully compliant with the latest regulations and industry standards.

In under an hour, WholeHouse can supply housebuilders with an entire set of drawing sheets, up to 200 pages of construction details and a full bill of all the items needed to build a property, saving weeks on design development.

It also reduces risk greatly, which is what lenders want to hear—after all, they are the ones with money on the line.

It adds certainty, too?

It is common that a builder will start a house knowing only about 20% of the actual design is there; they’ll be working off a sheet of paper and the design has to

come together ‘on the fly’. What actually gets built and when can often depend on whether the plumber gets in before the electrician or vice versa, and whether the right furniture or fittings are available on time.

half a billion house types. That’s correct, half a billion. In a way, it is similar to a car configurator, with five chassis types providing the basis for a whole world of choice.

Too often when people talk about value-engineering it’s in a negative sense. This is quite the opposite. The model takes out cost by driving efficiencies, which can be reinvested where it adds value.

Such as where?

Is it important to note this is not a ‘standardisation’ process?

It’s absolutely true that this isn’t ‘standard’ in any way—SME housebuilders rightly pride themselves on not doing ‘standard’. Rather, the portal offers five basic footprints that can then be configured into

One of the potential benefits here is the ability to devote more time to the ‘hero’ plots within a development, those at the boundaries of developments, which need to respond to local nuances and character. With design time freed up, there can be more focus on these, they can be removed from the critical path; you can buy yourself time to get those

“ WholeHouse reduces risk greatly, which is what lenders want to hear ”

designs truly mastered.

Future-proofing and flexibility is key. Design elements such as large windows in kitchen and dining room areas mean that should the home-owner want to extend in the future, that will be made easier, because creating that hole in the wall is often the largest cost. Similarly, extending into the roof space can be facilitated better.

A specific example of simplifying things is concerning door width; with one uniform size, it makes things considerably easier. Builders can always get hold of the supplies they need, without any danger of the programme being disrupted and housebuyers being delayed with moving in.

So, really, it’s about empowering the housebuilder and democratising BIM?

For housebuilders, as things stand, there’s a huge amount of risk in doing anything ‘outside the norm’. What this does is elevate the position of the SME builder in the process. It is a genuine

WholeHouse in a nutshell

• The WholeHouse digital platform means SME housebuilders can create high quality, bespoke homes quickly, sustainably and costeffectively

• WholeHouse generates designs, materials schedules, detailed construction and marketing elements needed to plan, cost and build projects at the click of a button

• Gives SME housebuilders greater control and reduces their risk, optimises their costs and limits waste

MMC (modern methods of construction) solution, but delivered in a traditional brick and block style, in a streamlined process that brings in principles from other industries.

In time, we intend to add in other build methods, but this moment is a line in the sand—a value-engineering proposition for building traditionally. Everything becomes an informed choice for the customer. It’s not about Travis Perkins saying, ‘This is the most efficient way to build’, rather, ‘This is what it will cost to do this, and what it will cost to do that.’

Ultimately, this brings digital construction technology to the regional housebuilder, because we believe digital design and BIM has a huge amount to offer to them. We’re not reinventing the wheel in how people work on site, but the future possibilities are mind-blowing: early adopters will be in a really strong place.

Being at the heart of construction, we take great pride in supporting our customers with new value-added services that help them to navigate an increasingly

complex construction landscape with new legislation and decarbonisation targets.

WholeHouse will do just that, and help SME housebuilders, who are the lifeblood of regional property markets, to build better, more sustainable homes quickly and safely, whilst retaining control over the creative design elements and saving time and money.

How’s progress so far?

The WholeHouse launch went even better than expected; there’s really firm interest from people who knew a bit about what we were hoping to do, and real conversations are taking place now.

The first two homes built using the platform will be ready by September and are based in the Midlands. Extensive work has been carried out on pilot schemes across the country. The platform has recently won Best Business Product at the Housebuilder Product Awards.

A small price

What is the case for using a broker when sourcing finance? Boost asks the market for its take on the role of the broker in development funding

For an SME housebuilder, development finance is often a major hurdle: get it right and the whole process—from site acquisition, through construction, to the last unit sale—is smoothed. Get it wrong and you could miss out on the deal of a lifetime.

There are now numerous funding structures available and even the possibility of removing sales risk as part of the deal - so which will work for you? How do you know what you don’t know?

This is where specialist finance brokers come in – the art of good business is, as the old saying goes, in being a good

The broker perspective

Oliver Holden, Arc & Co: Development finance is a fairly saturated market, where it’s hard enough for us to keep up with the variety of new products on offer—and it’s our day job. So, for SME housebuilders to try and keep abreast, while coping with everything else they must deal with, feels [overwhelming]. It’s a better idea to partner with a professional who will be acting in your best interests; even if you have a CFO or similar who is well versed in this, there is still a lot else for them to do, so why not work with a someone whose sole job is to create value?

A broker can focus on what is the best deal for you, that will maximise the return not just on your investment, but on your time as well. An [experienced] broker will look to get the utmost out of any lender or product for their client.

Martyn Pollock, Hallcroft Finance: We provide a tailored service that will offer a number of potential solutions. Without wanting to oversimplify, we save our clients’ time: without a broker, they’ll get bogged down in too much information, and they’ll become pressured for more information from lenders.

One of the things we can bring is the ability to push back. Debt and equity providers will ask for everything they can get on a client’s track record: ‘Show me three schemes of a similar debt quantum they’ve delivered,’ asking for information down to inside leg measurements. That’s all fair

middleman. Developers are specialists, having spent many years honing their trade; it is no different with specialist finance brokers.

We consulted several industry stakeholders to ask their advice on how best to negotiate the world of development finance.

enough—if they’re lending £10m, they have that right.

But we can counter: The client wants to know about you: what was your last deal; who’s on the team; who will be running the process?’ Once you can show you’re a serious operator, it puts a bit of pressure back on them and they’re usually prepared to play ball a bit more.

Martin Johnson, Empire Commercial Finance: One of the first things to differentiate is those who generally broker property finance versus those who specialise in development finance. As development finance facilities are larger than most other property loans, it attracts a lot of interest from brokers. We often see a ‘kingdom of the blind’ situation where a developer has trusted, say, a mortgage broker, to source them £5m of development finance. This is no different to expecting your electrician to do your plumbing— same trade, wrong area. Mixed results, at best.

The value we add is typically easy to demonstrate. We get enquiries where the developer may already have terms which act as a baseline. We can then use our knowledge and experience to improve upon these terms, easily evidenced within a viability model. There is often a lot of value in simply knowing where not to take a deal or who not to deal with— things a developer wouldn’t know unless they were in the market every day.

price to pay

Going the extra mile

A good broker will be prepared to think in creative ways and drop other things when it might make a difference to whether a deal happens or not.

Martin Johnson explains: “In a recent example, I went with the developer on a Sunday morning to see the vendor and negotiated terms for a purchase price and deferred element.

I sorted a VAT loan, and then worked with the developer, solicitor and VAT

What the lenders say

Vishal Dixit, Pivot Finance: “A knowledgeable broker on a complex scheme can prove instrumental in bringing it to fruition.

For someone relatively new to the sector, using an experienced broker with a wide network of lenders is an obvious solution as there are so many finance providers out there. And, of course, some are much better than others when it comes to reliability, speed, specialism and/or availability of funds.

A competent broker will understand each of their preferred lending partners’ appetites and parameters and thus can source the relevant solution to best suit both lender and developer in the build cycle of a scheme.

loan provider, and had to revisit the deferred element of the loan with the vendor and agree an additional amount. What made the difference was a hands-on approach and coordinating all parts to make sure the lawyers could progress to a swift conclusion.

Valan Redmond, West One: “Using a broker for development finance can add certainty to the whole process. The last thing any developer wants is to go through quite often a lengthy application process, only to get knocked back. Brokers with a specialist market knowledge will be able to help them avoid this.”

Suraj Lakhanpal, BLG Development Finance: “What a broker can do is introduce a developer to a lender that is most appropriate to their project and experience. And they will help in the closing process for developers who obtain loans infrequently.”

Can you ever get best value without a broker?

Oliver Holden: “Possibly, although it would arguably be down to luck rather than skill. Working with a broker gives certainty of process and, to a degree, success, as brokers tend to only work with cases they think will transact. How happy borrowers can be with it depends on their aspirations at the outset, and a good broker should be setting expectations early. This, in itself, can save the developer a lot of time and money if the site simply isn’t viable.

It comes down to developers having to invest time and resource into something. You have to think about value in what is the best way of maximising your time, money and chance of success.

Valan Redmond: “I’m not sure that even with a broker you can be 100% sure you’re getting the best value, so,

by forgoing this, a developer might be at a disadvantage. There’s such a variance of products in the market, and brokers have the expertise and awareness of what’s out there. You could be ‘going in blind’ without good advice.”

Martyn Pollock: “SME developers have to wear a lot of different hats: site finder, planner, site manager, managing director… Simply outsourcing the broker function allows them to focus on what they excel at.”

Suraj Lakhanpal: “Value is not solely about the numbers; it’s as much about service, how a lender reacts when plans change, and how easy the drawdown process is. In times of uncertainty, it is important to have lenders and suppliers you can trust.”

How do you choose the ‘right’ broker?

Oliver Holden: “Word of mouth is a good place to start, whether that be via a lawyer, quantity surveyor, or any professional you know who’s had prior dealings with someone you’re considering. If somebody you trust vouches for a broker, that’s better than going in ‘cold’. Recommendations in a personal and professional capacity go a long way.

What are the perceptions in the market of the firm you’re considering? Do they have accreditations and industry awards? A lot of awards in this sector do hold meaning, because they often involve a process that takes a lot of time and effort.

Valan Redmond: “The old-school approach can be the best way of doing this: word of mouth through your professional network.”

Suraj Lakhanpal: “Recommendations from other developers would be a good starting point, and to seek references to ensure that the broker concerned is a good fit for your business.”

Martin Johnson: “You need to find someone that has experience, ideally via referral from a professional advisor or another developer. You then need to get on with that broker and have confidence in them.

Look at their LinkedIn profile, the website for the company, and have a discussion with them to make sure they understand the project you’re undertaking.

Vishal Dixit: “Go to a show like the Finance Professional Show, or something similar in the property development sector, both nationally and regionally, where many brokers will be exhibiting who you can meet face-to-face.

Check out one of several trade associations who represent finance and mortgage brokers (eg FIBA or the NACFB) or one of the trade publications that cover this market. Then, speak to fellow developers or contacts who they have used and would recommend . . . to find out in depth of people’s experiences—good and bad.

Summing up

Oliver Holden: “If there’s any misunderstanding around brokers, I’d say it’s that people think it’s something they can do equally well in-house, through a director who’s got a mate at one of the banks, or just Googling ‘development finance’, and that it’s all down to negotiation from there.

They might consider it just another cost, whereas, in fact, it’s about adding actual value. It can be a very time-consuming element—time that is taken away from the developer focusing on their core business.

In 2022, members of trade body the National Association of Commercial Finance Brokers facilitated £45bn in borrowing by small businesses, many of them SME housebuilders. Here, Norman Chambers, managing director of the NACFB, spells out what its members can do for clients

Instructing an experienced and knowledgeable commercial finance broker – particularly one backed by an independent trade body such as the NACFB - is an excellent way for SME housebuilders to extract the best value for their developments.

With their active knowledge of supply chain issues, rising interest rates, and acute labour shortages, commercial finance brokers can help SME housebuilders navigate the complex world of property development financing, secure funding, and mitigate risks.

Should you require a recommendation for a trusted broker, please contact boost@LDSyoursite.com

Vishal Dixit: “It will

possibly be cheaper to not use a broker, however, unless the developer has extensive knowledge of the lending landscape, they will not know the best ones to approach for the finance they require. Especially if the loan is needed in a hurry, eg if a site has become available at short notice and needs a quick completion, selecting the right lender requires an expert.

Also, if a broker has a good relationship with a particular lender, it’s possible they can get the developer a better deal—a benefit that would be lost by going it alone.

One of the primary benefits is the ability to access a wider range of financing options. These brokers have connections with a variety of lenders and investors, and by tapping into these resources, SME housebuilders can secure financing that is tailored to their specific needs, rather than settling for a one-size-fits-all solution.

Current supply chain issues in construction have made it increasingly difficult for SME housebuilders to secure materials, leading to rising costs and delays. But by working with a commercial finance broker, housebuilders can explore alternative funding options to get back on track.

Rising interest rates can also be a challenge. A broker can help navigate this issue by identifying lenders who offer competitive rates and terms. Brokers can also assist with negotiating favourable loan terms, such as longer repayment periods or lower interest rates.

Acute labour shortages are another challenge. Brokers manage these issues by providing access to funding sources that can be used to hire additional staff, invest in automation technology, or secure financing for training and development programmes. Housebuilders should choose with care. We would recommend that they work with a NACFB member, giving them confidence that the broker meets a certain standard. NACFB brokers are required to undergo regular performance audits to ensure they operate according to the rules and regulations set out by the Financial Conduct Authority and meet the Association’s Code of Practice.

Coupled with this, the NACFB also works directly with the lenders to foster and strengthen relationship for the benefit of borrowers. We currently have more than 165 lenders acting as patrons.

State of the market: Challenging times to focus minds

With his experience as a Managing Director at Lloyds Banking Group and Chief Executive Officer for Homes England, Gordon More has seen pretty much everything in housing.

He is now strategic advisor and investment committee chair at LDS, senior adviser at JLL, and non-executive director at Sigma Capital, Allison Homes and Kingswood Homes. We caught up with Gordon to get his thoughts on how SME housebuilding looks in early summer 2023.

It has been a topsy-turvy time for housebuilding, with the sector going from a ‘hot’ selling market last year, and production struggling to keep up, to a sudden halt following the infamous Kwasi Kwarteng mini-budget in the autumn.

Literally, the market stopped— and it was only in late March that sales have stabilised, albeit at a significantly lower rate than the previous year. So, for housebuilders, and SMEs in particular, what might the coming months bring? Here are some factors everyone should be aware of.

1. Consultation delaying planning decisions and Local Plans

The recent climb down by government in the Levelling-up and Regeneration Bill, with the intention of removing centrally imposed building targets and including more local decision-making, is already slowing down the planning process. Indeed, a number of local authorities have declared that work on their Local Plans is being paused.

This is delaying existing permissions in the planning system and reducing certainty. At a time when housebuilders are tentatively recommencing land purchases, this is another barrier they are facing. This, added to the fact that there are large areas of the country where building is halted as the government struggles to come up with a solution to nutrients in rivers, is keeping land prices high.

2. Uncertainty in the sales market

While enquiries and visits to sites have improved over recent weeks, sales are running at around 0.55 sales per site, per week (according to figures published by the Home Builders Federation), significantly down on the last 18 months and below the long-term, pre-pandemic average.

Uncertainties over the cost of living, interest and mortgage rates, and inflation (which is still affecting material costs) makes predicting the market in the short-

those smaller housebuilders that rely on raising development finance. This will only strengthen the attractiveness of the LDS Sales Guarantee to support new lending.

4. Adoption of new government regulations on building performance and energy efficiency

Finally, building regulations are evolving at pace, the latest being Part L, which covers the conservation of fuel and power in the building of new homes and establishes how energy-efficient they should be.

From 15th June 2023 all homes that have not commenced by that date will be subject to the new regulations, which require improvements in lighting efficiency and new low-flow temperatures for heating systems, amongst other requirements. All new homes must produce 30% less carbon emissions, a figure that will be increased in due course as the Future Homes Standard comes further into play.

term challenging, all of this is are being factored into appraisals. More bulk and partnership/pre-sold deals are emerging as housebuilders manage this uncertainty. I suspect this will continue in the shortterm until there is more confidence in buyer demand.

3. Are banks and other financial institutions ‘de-risking’?

Fortunately, there is still little evidence that banks and financial institutions have tightened lending criteria for development lending—although experience tells me that this will happen. The recent banking crisis (with Credit Suisse and US regional banks) will have put credit departments on notice. In any event, with the base rate at 4.5% (and potential for another increase likely) the overall cost of funding is higher and there is a strong probability that increased pre-sales will be a condition attached to lending offers for

So, what does this mean? Different materials, heating sources and increased evidence and testing will be required. For the major housebuilders, with large technical departments and the ability to test and source different solutions, that’s not such an issue. The smaller SME, however, with less in-house capability, requires the support of the wider building community to ensure that they are prepared to meet this challenge.

In the short-term, compliance is likely going to increase cost, which may be difficult to reflect in sales prices and put already squeezed margins under yet more pressure.

To summarise, I foresee a challenging environment until at least late summer, and potentially into next year—and I am by nature an optimist.

If you would like to be put in touch with Gordon, please contact us at boost@LDSyoursite.com

“ With the base rate at 4.5% as of early June (and potential for another increase) the overall cost of funding is higher and there is a strong probability that increased pre-sales will be a condition attached to lending offers for those smaller housebuilders that rely on raising development finance ”

LDS News

A successful MIPIM for LDS

A four-strong delegation from LDS attended the 2023 staging of MIPIM, the world’s largest property conference—and it’s already paying off, with transactions entering legals following connections made in Cannes.

LDS’s week kicked off with what is now established as an annual lunch, cohosted with Tom Bloxham at his jawdropping Maison Bulle. One of the most iconic homes on the French Riviera, it provided an unmatched setting for attendees who came from businesses including Ingenious, LendInvest, Close Brothers, United Trust Bank, Housing Growth Partnership and Avamore.

Throughout the course of the week, the LDS boat welcomed an endless procession of lenders, brokers and housebuilders, showing that MIPIM is an unrivalled chance to pull together the people in the industry that can make things happen.

The second event of the week, co-hosted with gunnercooke and Watts Finance, saw LDS hold a boules tournament on La Croisette, introducing a light element of competition.

Among the companies we’d like to thank for invitations to their events are Together, United Trust Bank, Deloitte and BuildZone.

Mark Hawthorn, CEO of LDS, said:

“MIPIM has been an enormously useful tool for us in the many years we’ve been coming to the event. It provides the opportunity to meet new people and strengthen existing connections in a range of settings. The hard work done in Cannes is only the start, and we’re delighted to say that MIPIM 2023 is already proving fruitful for LDS.”

Ready to rock

The ninth Manchester International Festival (MIF) will take place in summer 2023, and we’re proud to be back on board as a sponsor.

The biennial arts event was conceived as an ‘original, modern’ festival that challenges world-renowned artists to come up with work that is ground breaking.

The 2023 event is going to be something special; it is moving to The Factory, a spectacular £200m, multifunctional arts destination that will be the heartbeat of the festival from now on.

MIF runs from 29 June to 16 July, hosting an array of happenings across the arts. Highlights for 2023 include Janelle Monae’s three-night residency; ‘You, Me and the Balloons’ by the much-loved artist Yayoi Kusama; and a night of musical innovation featuring Afrodeutsche and the Manchester Camerata conducted by Robert Ames.

Mark Hawthorn, CEO of LDS, said: “Manchester’s reputation as a pioneering musical city is one of the things that

makes its story resonate so strongly around the world, and MIF continues to drive the city forward, championing new work and widening the city’s boundaries. We’re really looking forward to MIF23.”

Artistic director and chief executive, Factory International and Manchester International Festival, John McGrath, commented: “A genuine melting pot of creativity where artists share their ideas with each other and the public, the Festival will once again take the temperature of our times, and imagine possibilities for the future.

“As always, MIF is rooted in its home— in the spaces and places of Greater Manchester. So, at the same time as we take up residency in our flagship new venue with our centrepiece exhibition of Yayoi Kusama’s incredible inflatable sculptures, the Festival will extend its reach throughout the city: finding unexpected locations to show its work in, and working with local artists and residents to perform and take part. MIF23 will be a true celebration of the city and its cultural offerings.”

LDS News

We have a champion! Our racehorse Blue Fin picked up his maiden victory at Newcastle, following encouraging results that had already seen him pick up a runners-up spot and two third place finishes.

Blue Fin is certainly being given every chance of success: he is based at the Donald McCain stables, the McCain family having a rich pedigree in racing, with four wins in the Grand National— three with the legendary Red Rum and more recently in 2004 with Amberleigh House.

We’ll keep you posted on Blue Fin’s progress in future issues.

Blue Fin triumphs Issue One charity competition

- the winners!

In Issue One of Boost, we promised to give £250 to each of the charities nominated by ten readers who correctly answered the question, ‘At what stage in a project does LDS release a 10% interest-free cash deposit to SME

housebuilders?’ – the answer being, ‘When the guarantee contract is exchanged’. We’ve actually gone one better and chosen 11 winners.

Congratulations to our Issue One winners:

• Nick Rotton Sterling Finance

Vasculitis UK

• Russell Hall SPF Private Clients

HGLFC - football club in Rossendale

• Elliott Vure Together Money

The Fed

• Alex Upton & Uliana Kuzmis HTB

Foodcycle

• Chris King Secure Trust Bank

National Deaf Children’s Society

• Phil Gray Watts Commercial

The Joshua Tree

• Tom Brown The Ingenious Group

The Orangutan Project

• Stephen Issacs BLME

Little Gate Farm

• Guy Murray West One

Spread a Smile

• Jaxon Stevens Sancus

Martlets Hospice

LDS boosts numbers

Another crop of new starters has joined the rapidly growing LDS team.

Alex has more than 15 years’ experience in real estate finance and development, including roles at Legal & General where he was head of major transactions, and at Homes England where he provided SMEs with over £500m of development and equity finance.

For over 10 years, Hayden has worked in residential development finance, notably at NatWest and challenger banks Paragon and Hampshire Trust Bank.

With a passion for innovation, developing new methods and creating value through collaboration, Gareth will use his marketing and strategic leadership experience to enhance LDS’s presence in the market and its customer and client communications.

Fiona has extensive financial services knowledge, having worked at Bank of Ireland and Assetz Capital, where she completed on and monitored many residential development schemes across the UK.

After positions as an administrator in various industries, Emma is now looking forward to helping

Olga’s 20-plus years spent overseeing several hundred stores’ leases and rent further bolsters the team’s expertise and she’s looking forward to this next chapter of her journey in property.

Alex Maltby Origination Director

Fiona Connor Relationship Manager

Hayden McMullen Relationship Manager

Emma Farrell

Gareth Cameron Marketing Director

Olga Ludlow Assistant Accountant

This issue, win a bottle of Tignanello wine

For our second reader competition, Tignanello wine is up for grabs.

All you have to do to be in with a shot of winning is to correctly respond to this question, the answer to which can be found within this issue:

How long does it take to generate a Sales Guarantee on our website?

A) less than two minutes

B) 10 minutes

C) 30 minutes

Email your answer to boost@LDSyoursite.com by 30 July 2023. Good luck!

We want you to contribute to Boost

We hope you’ve enjoyed the second edition of Boost. The magazine exists to bring together thoughts and contributions from people across the housebuilding industry, covering key issues of the day.

It’s our belief that SME housebuilders, their lenders and partner businesses all have expertise they can share that will be

of interest and benefit to people across the market.

In order to make each issue topical and varied, we need contributions.

Whether you’re a planning consultant with an update on pending regulatory changes that people need to know more about, a lender with a new funding solution, or a housebuilder trying out some innovative

energy-efficiency technologies on a live scheme, we’d love to hear from you— hopefully the first two issues have you given you a flavour of the kind of content we’re looking for.

Please contact

markhawthorn@LandmarkGrp.co.uk with your ideas on what you could bring to future issues.