Development Finance in Nottingham
Find out how much you can borrow for your Nottingham development now.
Property development in Nottingham
Nottingham is one of the major cities in the East Midlands and the seventh largest urban area in the UK. It ranks in size between Liverpool and Sheffield and is renowned for its links with the heroic outlaw, Robin Hood. But it’s not only this legend that shared its riches. The growing development finance landscape means there’s huge potential for property developers in Nottingham who can make some great gains from this historical city.
According to the UK House Price Index, house prices – in line with the rest of the UK – continue to rise, averaging at £198,821 (a 10.7% growth rate since April 2020).
The Government’s Core Strategy and Land and Planning Policies Doc Jan 2020 requires the provision of 17,150 homes in Nottingham city up to 2028. This will be a mix of housing including family, affordable, specialist and student accommodation, ensuring a range of good quality homes in appropriate locations.
Nottingham house prices in maps and graphs shows the most expensive properties are in the city centre. On a wider scale, Nottingham property prices average at around £138,440, lower than house prices in other cities such as London, Cardiff and Oxford. Although Nottingham has low prices, its increasing rental costs means those who purchase property in Nottingham can expect yields of 4.46% on average.
The ‘race for space’ has been the undeniable headline of the past 12 months, but as lockdown eases, many buyers have expressed a yearning for the social elements they forfeited over the past year. The appeal of living in a city centre appears to be on the up and Rightmove reports greater demand from younger first-time buyers (up 39% – Jan 2021 to April 2021) keen to live in urban areas.
Nottingham’s major strength is in its past capital growth and future long-term yield growth (JLL says it’s set to be one of the strongest in the country). Over 52% of the population lives in rented accommodation and with two major UK universities located relatively close to the city centre, there’s a huge amount of tenant demand. Demand for Purpose Built Student Accommodation is expected to increase by 28% in the next few years.
The city is also home to Queens Medical Centre – a ‘super hospital’ in the region and one of the largest teaching hospitals in the country, with over 6,000 medical staff.
Significant developments
Nottingham City Council’s Plan 2019 – 2023 shows what improvements are underway. A key objective is to build 4000 new homes (including eco homes) of which 1000 will be council or social homes for rent, and the council pledges to develop at least 500,000 square feet of Grade A office space to encourage inward investment.
In addition, the Council plans to dramatically transform and regenerate the Broadmarsh area of the city centre. A £250 million programme of works is underway to transform the southern part with improved shopping, leisure and restaurant facilities, a new car park and bus station, central library and Nottingham College City Hub. The castle visitor experience has also been upgraded, following a £31 million, three-year development and conservation project.
Along the northern banks of the River Trent, the Trent Bridge Quays waterside development includes 95 new townhouses and apartments and Nottingham-based ALB Group has submitted plans for a landmark mixed-use development proposal. If approved, designs for the 100-apartment scheme include planting initiatives, living walls on balconies/terraces and roof solar panels, enhancing the site’s ecological value.
Guildhall Place is a 2.4 acre mixed-use redevelopment site in a prime city location with a commercial block providing up to 100,000sqft of grade A office accommodation, rarely found outside London.
Nottingham Science Park has a range of accommodation types and sizes; from small office/workspace suites (270 sq ft) to office spaces between 2,227 and 6,125 sq. ft.
There are more than 7,600 student units under construction or in the planning process and according to UrbInfo Nottingham 47 developments could be built in Nottingham and the surrounding areas of Beeston and West Bridgford within the next three years.
Other developments across the city include private residential schemes, with apartments and new homes in London Road, Queens Road, Traffic Street and the Lace Market.
New homes in Arkwright Walk and Arkwright Street are transforming part of The Meadows, while new offices in Station Street are underway near new student accommodation. Heritage-led improvements are happening in Station Street, Carrington Street, in and around the Old Market Square and Lace Market.
Growth areas
Within the City Centre, the focus for regeneration is on city centre quarters:In the southern side there’s a £650m plan to regenerate the derelict site of ‘Boots Island’ (renamed Island Quarter). Developers Conygar received outline planning permission in April 2019. The initial stage includes a three-storey pavilion on the canal with two restaurants, events space and a large rooftop terrace.
In the eastern side there’s the nationally-recognised Confetti Institute for Creative Technology, Antenna (a co-working facility for the creative community) and Metronome (a 400-capacity live performance venue. Nottingham Trent University’s campus is increasingly attractive to PBSA developers and the area also appeals to investors in build-to-rent and other residential schemes, such as the Fruit Market development by Blueprint.
The Creative Quarter in the centre supports creative and digital businesses and is described as a great place to learn, work and live. The city’s growth plan says ‘the area has become home to a growing concentration of businesses specialising in important emerging industries: digital content, life sciences and clean technology. With the right support and stimulus, these industries can grow…’.
Outside the city centre there are brownfield sites suitable for varying use. Collectively all areas are expected to make a significant contribution to Nottingham’s economic and social transformation.
HS2
HS2 connects Nottingham to other cities, reducing journey times (reaching London in less than an hour), and will create 10,000 jobs through the creation of an innovation campus around Nottinghamshire HS2 station.
Opportunities for developers in Nottingham
Innes England is selling 24 acres of former agricultural land and surplus university estate at Clifton, which has outline planning consent for housing. The site is around five miles south west of the city centre and co-owned by the university and city council.
It’s clear Nottingham’s growth plans offer huge potential for property developers. Described as a place ‘where growth happens’, the city has a strong reputation for life sciences, financial services, logistics, retail, digital content (creative quarter) and advanced manufacturing.
How to finance property development in Nottingham
At Brickflow, we can help you easily access development finance. It’s a great time to be a property developer, and while sourcing development finance has historically been a key barrier to success for SME developers, this is no longer the case.
To find out how to finance property development in Nottingham, check out our Smart Guide to Development Finance.
Probably the best development finance rates in the UK
We’ve done the legwork for you and with nearly 30 lenders plugged into our platform, (more than half the UK development finance sector) we connect borrowers and lenders in seconds. Here’s our latest list of trusted lenders.
A single onboarding process and online tools enable you to build your profile and showcase your experience and projects, ensuring information is only sent to lenders that match your requirements. And our unique technology automatically filters out enquiries that do not meet lenders’ criteria.
This coupled with our consistent information format prompts quick decision-making, and such is our confidence in Brickflow, we’ll go as far to say we can offer ‘probably the best development finance rates in the UK’.
By searching the market in real-time, we can secure the best loans from trusted lenders in seconds. No other development finance comparison site empowers developers to borrow smarter, mobilise quicker and get ahead of the game.
HOW DOES BRICKFLOW CALCULATE DEVELOPMENT FINANCE?
Development finance is the most complicated of all property loans to calculate. There are a lot of variables to consider, and these loans are underwritten more subjectively than a regular mortgage.
We use the same loan modelling process across all lenders, to allow easy comparison between lenders. Each lender will have their own model, which will constantly be tweaked, so the loan figures provided on the Brickflow results screen may differ to the final quotes provided by the lenders. However, we constantly monitor our estimates against the actual quotes received to ensure any differences are minimal.
The main criteria to how a development loan is calculated are:
- Loan to Gross Development Value (LTGDV)
- Loan to Cost (LTC)
- Minimum client equity contribution
- Day 1 land loan cap
The lender determines the loan amount from a combination of the above factors and delivers a final combined amount. Other factors that can affect leverage and pricing are; micro geography, asset type, lender loan book exposure, development experience, build type and more.
HOW DOES THE BRICKFLOW LOAN APPLICATION PROCESS WORK?
Once you have shortlisted your lenders and want to make an application you will be asked to complete further details on the project; your development experience, a development appraisal and property schedule. This will automatically be sent to the lender shortlist (up to 5x lenders), where these lenders are encouraged to submit their best loan terms.
These lenders will conduct a preliminary underwrite and offer their final loan terms, decline to offer or ask more questions. Once all the loan terms are received, borrowers can ask any questions to the lender or Brickflow. When you have selected your preferred option, that lender will move to their credit approval process.
Once the loan is credit approved, the lender will instruct their professionals; valuer, IMS and lawyers.
There is a fee of £ 995 payable to complete the full application, but this is refunded when the loan completes or in the event that the chosen lender then declines the application.
HOW DO YOU RANK THE LOANS?
Loans are ranked in order, from largest to smallest. When the loan amounts are the same, the Brickflow software ranks them in price order, with the cheapest loan first.
HOW LONG DOES IT TAKE TO GET A LOAN?
Once you’ve selected your 5 lenders and your project goes live on Brickflow, bids can be received within as little as 2 hours. It normally takes up to 48 hours for all 5 bids to come in, and sometimes a little longer if it’s a complex case or there is incomplete information.
The info the lenders need is clearly detailed in the online Project Appraisal but primarily includes; your development experience, development appraisal and a property schedule.
Once you have selected your preferred bid, there is a fee of £ 995 payable to complete the full application. (This is refunded when the loan completes or in the event that the chosen lender then declines the application.)
From paying the application fee to full credit approval, it normally takes 2-3 days, although the quickest credit approval on the platform so far is 4.5 hours
Credit approval to loan completion is mainly dependent on your professional team. If your lawyer works quickly and collaboratively with the lender's professional team, you can complete 3-4 weeks later.
The industry standard to complete a development loan is close to 6 months. With good borrower co-operation, Brickflow can do it in 4 weeks from start to finish, but 8 weeks is more typical.
CAN INTRODUCERS USE BRICKFLOW?
Absolutely. We work with estate agents, brokers, IFAs, architects, lawyers, and any other property professionals. Click here for our website for partners.
HOW DOES BRICKFLOW GET PAID?
Brickflow receives a commission from the lenders, but only on completion of the loan. We are therefore strategically aligned with our borrowers to ensure their loan completes successfully.
Any commissions are built into the results you see on screen and will be included in the loan bids you receive in the Deal Forum and in the credit-approved loan offers. There is no separate payment due.