Getting access to different finance options will be more important than ever for SME developers in 2024, said Chris Gardner, joint CEO at Atelier.
According to Chris, having a choice of products — both fixed and variable rate options — will help select the finance most suited to developers as the market is expected to enter a period of transition.
The statement comes on the back of the latest BoE’s decision to hold the base rate at 5.25% for the second time in a row, and follows recent forecasts from Capital Economics, predicting that the base rate could drop to as low as 3% by 2025.
“If you look at market forecasts, the SONIA forward curve suggests interest rates will gradually fall from the current rate of 5.24% to about 4% over the next two years, so many developers would rather borrow on a tracker and see the rate they pay fall over the next two years,” commented Chris.
On the back of this, Atelier is promoting a range of funding options, including a tracker loan to provide SME property developers with flexible funding.
“Recently, we’ve seen a considerable uptick in interest for variable rate tracking options and that’s why we’ve responded,” said Chris.
“In recent months, interest in fixed rates have accounted for about 80% of terms issued and I expect by the spring, it will be at least 5050 between fixed and tracker.
“We want to provide maximum choice to SME developers during this period of market transition.
“When interest rates were rising, we protected developers by holding our rates and majoring on the certainty of fixed-rate deals — now that the market is shifting, we want to stay one step ahead and expand our variable offering.”