The Intermediary – October 2026 - Flipbook - Page 67
Q&A
of funding for developers with us has not yet
reflected that shift, because our margins are still
competitive and the cost to the borrower has not
changed. Looking ahead, if yields soften, GDV is
likely to be slightly lower than a year ago. The debt
quantum that can be secured will be lower, purely
because the development value has come down.
Build costs have increased, but the positive
news is that they are not increasing at the same
rate as they did at the start of the Ukraine war.
Developers are managing that largely by accepting
slightly lower profit margins.
Planning delays are probably the most
frustrating of the three. There are measures being
introduced that, hopefully, will make planning
faster and more flexible – including changes to
affordable housing thresholds and community
infrastructure levy relief. There is a consultation
coming up, and we will have to wait and see.
What do these conditions
mean for brokers?
More developers are acquiring sites
with a view to enhancing the scheme
that currently has planning and adding
value, rather than simply building it out.
To do that, they need bridging finance.
These opportunities don’t come around every
day, and when they do, developers often have
to act quickly and be decisive – they might need
to exchange and complete within four, five or six
weeks. They may not yet be ready to deliver the
scheme that’s on paper, but they want time to
enhance the planning and develop the design. That
is where bridging comes in, and it’s an area where
brokers can really add value.
We are also seeing opportunities where strong
developers, typically running two, three or four
schemes at a time, are constrained by challenger
banks with tight maximum exposure limits. Those
banks may like the next lending opportunity, but
they cannot provide further funding. There’s an
opportunity for brokers to bring those sponsors
to Pluto Finance. Our exposure is not capped in
the same way, and we are well set up to support
developers who need a lender they can grow with.
We have also recently launched a revolving
credit facility for housebuilders, which is
particularly attractive to regional developers with
multiple schemes, especially where high street
banks are no longer delivering. We’ve also set up
a dedicated bridge team for £1m to £10m bridge
loans, where all loans of that size are treated with
the same consideration and speed as a bridge
lender that operates in the sub-£1 m lending
market. That means brokers can come to us with
a £7m bridge requirement and expect the same
responsiveness a smaller bridge lender might give
on a £300,000 loan – which is quite compelling in
that larger-ticket space.
How can brokers help improve the
chance of securing finance?
The developers we like to work with are those
who have underwritten conservatively from the
outset, built in headroom on rental values and
yields, and thought carefully about design and end
users. Increasingly, that also means understanding
whether a scheme could be delivered as BTS, BTR
or a combination of the two, and being able to
articulate that flexibility. Brokers can strengthen
applications by helping clients present that
story clearly: who they are, what they
have delivered before, how they have
underwritten the scheme, and why the
product is right for the local market and
planning environment.
What is your outlook for
development and bridging?
We are dealing with a difficult
macroeconomic backdrop, higher rates, build
MARIO
cost pressures and ongoing planning issues. But
IOANNIDES
this is the latest in a long line of challenges that
developers and lenders have had to navigate
over the past 10 years.
The residential sector has been remarkably
resilient. Developers and lenders remain active.
At Pluto Finance, borrowers can expect more of
the same from us over the next six to 12 months.
Seasoned borrowers value not just pricing and
leverage, but access to experienced decisionmakers, speed, decisiveness and the ability to
deliver. We will continue to offer similar leverage
to what we have always offered, with competitive
pricing and a strong focus on customer service and
deliverability. With the new products and asset
classes I’ve mentioned, we have something for
everyone. I can’t think of too many lenders that
can provide anything from a £1m to a £100m loan
and match pricing to a spectrum of leverage that
ranges from high-street-style through to more
stretch positions.
What we are looking for is seasoned, strong
developers who are good at what they do. Those
are the clients that will continue to secure finance
and move their schemes forward, even in a
tougher market. ●
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