Developers seeking short-term funding to counter falling property values

More property developers are seeking short term funding to help them counter deflated property values, according to asset-backed lender, Suros Capital.

Suros is receiving enquiries from property developers seeking funds to see them through periods where valuations are depressed, so they don’t have to market and sell property at the wrong time. 

With inner London house prices falling at their fastest rate since the global financial crisis and little sign of a price recovery before 2028 according to reports, Suros Capital says that it is not surprising that enquiries from developers for cash to see them through a slump in house prices are rising.

Ray Palmer, director at Suros Capital, shows how a recent case illustrates how a developer’s luxury assets provided the security for an immediate bridge loan that enabled the developer to delay the sale of a property until there is an upsurge in prices:

“Our client referred by a bridging finance broker, required £220,000 to allow him to put off selling a property at a time when prices are negative. The loan provides him with a buffer against the vagaries of the current market and gives him the time to choose the right time to sell to optimise his profits.

“Given his immediate need for a cash injection, his adviser told him to contact Suros Capital. We were able to assess and value his collection of gold bullion and Rolex watches and within 72hours of the initial enquiry we were able to deposit the full £220,000 into the client’s account."