Are developers steering clear of commercial property?

New research has revealed that planning permissions for commercial property in the United Kingdom have hit a six-year low, writes property developer Richard Carr.

Commercial Property

Richard Carr Office to Commercial

Are developers shying away from commercial property?

Richard Carr has achieved planning permission for many types of commercial property during his 30-year career in the industry, including:

  • Salterns Marina – restaurant and commercial units available
  • Walkabout, Bournemouth
  • Ardmore Road, Poole

Further examples of his development past can be found on Richard’s website: http://www.richard-carr.co.uk/historical/

He’s disappointed to read the latest commercial property development figures which show that planning permissions have hit the lowest level since the peak of the recession in 2015.

Saving Stream – a peer-to-peer property funding platform – said that 11,300 commercial property developments received planning approval in 2015, the lowest since 2009.

This drop has been attributed to the difficulty small developers have had in securing finance. Larger developments have held steady since 2010 at 2,000 per year, whereas the number of smaller developments dropped from 11,300 in 2010 to 9,300 last year.

Lending

Liam Brooke, a co-founder of Saving Stream, told mortgagesolutions.co.uk that many banks aren’t in a position to lend to commercial developers on the scale they did prior to the recessions, as a result smaller commercial developers aren’t getting off the drawing board stage.

“The big listed developers still have plenty of access to finance for large office, retail or industrial developments, but it’s a different story for smaller developers looking to get spades in the ground on more modest plans.

“That’s creating opportunities for all kinds of alternative providers of development finance. While debt funds have muscled in on some of the deals that banks would once have done at the larger end of the market, for smaller developers, peer-to-peer lending has been a vital conduit for funding over recent years.”