Alternative lenders enable the British housebuilding industry to flourish.

07/05/2022 07:30 By #Marketing

British housebuilders are turning to alternative lenders because they need funding.

There’s no denying that the UK’s housebuilding industry has become increasingly reliant on alternative lenders to fund its projects. Over the last two years, the amount of money supplied by the sector’s alternative lenders has grown by £3.7bn. This equates to 14% of all money lent for housebuilding in the UK during this period.

54% of SMEs stated that obtaining finance is the main reason for their home building project not being completed. Alternative finance is beginning to resolve this problem by offering small businesses access to the money they need in order to complete these projects.

The alternative finance provider industry is continuing to mature and develop in the UK. The traditional banking sector has faced criticism for its failure to serve SMEs in the property sector; there are upwards of 2 million small businesses in the UK, and up to 70% do not have access to finance.


Small businesses often face problems getting financing. They can’t get loans like big companies, and banks aren’t able to approve their small loan requests quickly. This is why alternative finance sources are so attractive to small businesses—they offer quick funding without all of the red -tape that comes with bank loans.


While it has made improvements, the Government may make several more changes to better support small building businesses.


The Housing Growth Partnership and other such schemes’ act as a dedicated initiatives that in some cases invest alongside smaller builders in new developments, providing money to support their businesses, helping get workers onto sites, and increasing housing supply.

These partnerships also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.


Supporting small builders

In the last 25 years, the number of firms building between 1 and 100 units a year has fallen from over 12,000 to fewer than 3,000.

That’s why the government has placed housebuilding at the heart of its long-term economic plan, to get homes communities want to be built and create jobs in construction and related industries.


Click here to learn more about financing your business or to receive help and advice from us.