Regional development lending is quietly outpacing London
Manchester, Glasgow and Belfast schemes accounted for 61% of our development completions this quarter. Here is what is driving the shift.
Alex Paterson
Sixty-one percent of the development facilities we completed this quarter sat outside the South East. That is not a London story so much as a maths story: build costs have converged nationally while sales values have not, so the same contingency buys a regional developer far more comfort.
Lenders have noticed. Several funds that would only look at schemes inside the M25 two years ago now have regional mandates, and two have opened Manchester offices. That has widened the panel on exactly the sites where competition used to be thinnest.
The consequence for developers is that leverage on a well-located regional scheme is now broadly comparable to London — up to 70% of gross development value, or 90% of costs — where a discount used to be automatic.
What has not changed is the professional team test. Regional or not, the first question every credit committee asks is who is building it, and what they have delivered before.
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