One advantage of having Relationship Managers across the UK, is that Signature understands the national property market, which despite the London and South East focus in the news, means we can react to local situations and shape deals accordingly.

Nationally, the Federation of Master Builders (FMB) is reporting that almost 90% of small to medium-sized (SME) construction firms are reporting having to delay jobs due to supply chain problems or a lack of skilled tradespeople.

Adding to the sectors problems is the jump in material prices driven by these shortages, almost all builders expressing their intention to pass the increased cost onto their customers, and expect the problems to extend well into 2022.

The good news in Scotland is there appears to have been an increase in jobs in Q3 with the majority of builders reporting increased workload and a small rise in enquires too, which adds to the general optimism spreading through the property market in Scotland.

This is a sentiment echoed by Alan Coats, our Relationship Manager based in Edinburgh: “I’m not surprised that we are seeing a jump in activity in the construction sector, given the lockdown restrictions were only eased in Scotland at the end of April.

“The problem now seems to be for the builders to meet demand, in the face of ongoing shortages of both materials and the skilled hands to make use of them. The problem is also likely to spread into the property development sector, where extended completion dates due to shortages, can have serious consequences financially.

“For a consumer wanting to extend their existing home or renovate a new property they have moved into, delays are frustrating, but have few financial implications. A delay may even give more time to raise the funds for the final bill.

“Once a developer agrees a build or refurbishment schedule and draws down the loan to meet the costs, there is a firm timeline to be worked within. This is governed by the term of any lending facility provided by short term lenders like Signature Property Finance.

“Where events outside the developer’s control impact project delivery within the loan term, having a lender who works flexibly with the developer is key.

“We always work with our clients to re-finance these deals and ensure the project completes, but naturally it is more expensive than ensuring the required funding period is sufficient from the outset of the loan to complete the project and sell or refinance the completed properties.

“Given the supply chain issues, we recommend developers work with lenders to arrange the appropriate length finance agreement, whilst ensuring project cost schedules have sufficient contingency built in to absorb material and labour price volatility.

“This is something we look for when a deal drops into our inbox and why as a firm, our unrivalled hands-on experience of property development, allows us to understand the ambition of a project and unlock the potential in property.”

If you are buying and developing property and want the benefit of high-quality customer service, based on certainty of funding and ease of doing business with us, please get in touch. And if you are in Scotland, Alan is always keen to meet in person on site to help you achieve the funding you need for your project, with no nasty surprises.