In the wildest days of the credit boom, any property developer with the merest twinkle of a scheme in his eye could rely on big bucks from the banks. The likes of Peter Cummings, corporate supremo at HBOS – one of the worst offenders – were handing out wheelbarrows of cheap cash. Between 2005 and 2007, banks lent an enormous £84bn to the property sector. Slicing and dicing these loans through securitisation merely extended the party. It was too good to last, and it didn't.
Pressure may be mounting on the Coalition to get Britain's reluctant recovery moving again with a major housebuilding programme, but finding new sources of funding is also critical for developers facing a unique funding challenge to revive commercial building schemes.
Now that they're nursing a painful property hangover, banks don't want to know.
Now that they're nursing a painful property hangover, banks don't want to know.
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