Taylor Scott International News
The British love affair with barn conversions seems to have come to an end with new figures showing that the number of agricultural to residential property conversions has fallen. For decades the conversion of agricultural buildings including barns and stables into homes has been popular but now new research shows that in England the number has dropped by 24% over the last year. It suggests that developers are suffering from a lack of funding for such projects so people who want this kind of property are left to funding it themselves. This is despite a there being a considerable appetite amongst farmers concerned about European Union subsidies after the recent Brexit vote to target alternative ways to diversify income, says peer to per property funding platform Saving Stream which carried out the research. The firm believes that agricultural to residential property conversions could still make significant financial sense for farmers and it also makes sense in terms of improving the current lack of housing supply in the UK, especially in rural areas. Saving Stream adds that banks are continuing to de-risk their balance sheets as much as possible, driven by the capital holding requirements placed on them by regulators in the wake of the credit crunch and that private investors are stepping in to help finance these projects as they are attracted to the competitive annual returns of 12% on offer for secured loans at a maximum loan to value ratio of 70%. ‘Converting agricultural buildings such as barns are one of the most effective ways of combating the UK’s chronic rural housing shortage and in the uncertain post-Brexit climate, UK farmers are looking to ramp up activity in this area,’ said Liam Brooke, co-founder of Saving Stream. ‘It is important that access to funding is improved, developers are keen to take-up the large number of opportunities available to them but time and time again a lack of funding is holding them back,’ he added. Saving Stream explains that recent research shows that outstanding lending by UK banks to property developers plunged from £32.5 billion in April 2014 to £14.9 billion in April 2016, a fall of 54%. ‘There are housing shortages across the UK, in both urban and rural areas, and with increasing numbers of possible developments available, this is a perfect opportunity to reduce the housing gap,’ Brooke pointed out. ‘Private investors are helping bridge the funding gap that the UK’s property market has suffered from but there are still plenty of projects struggling to secure the finance needed to get off the ground. There is an eagerness from all sides to increase the number of conversions to help meet demand, however, the biggest issue remains access to funding,’ he added. Taylor Scott International
Taylor Scott International, Taylor Scott
