UK developers under pressure

The manager of an open-ended opportunity fund says a growing number of property developers are facing funding problems on new projects because their banks are freezing lending until they can demonstrate a certain level of off-plan sales.

A UK residential property opportunity fund manager says banks are requiring a certain level of off-plan sales before contemplating lending to property developers.

Managing Partners Limited, which runs the open-ended British Property Opportunities Property Fund, says that a growing number of property developers are facing funding problems because of the stance.

Jeremy Leach, managing director, said in a statement: “We are in talks with a growing number of property developers who have strong developments, but are facing a freeze on funding because their banks have got cold feet and want to see evidence of greater sales before they continue to lend against these projects.

The comments comes six months after Managing Partners said large falls in UK house prices were leading to buying opportunities for acquisitive funds.

Last year it snapped up 18 of 48 homes in one street in Portsmouth in the south of England