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Bridging Loans in Scotland

Because property law is somewhat different to elsewhere in the UK, it can be difficult to obtain bridging loans in Scotland. This is the case especially when approaching a traditional high street lender.

Bridging loans in Scotland by their nature are not a long term solution. They are exactly as their name describes them – a short term bridge to cover a shortfall when the mainstream funding for a transaction is not available for any of several reasons. Typically, they are sought and offered to stem a cash flow issue that has arisen once a transaction has commenced. The transaction cannot be concluded because of an obstructive situation. Quite literally they provide emergency funding, while the clock is ticking.

That said there are some, mostly private lenders that provide access to bridging loans.

Bridging loan rate in Scotland

Bridging rates for loans secured against Scottish property have dropped significantly over recent years. This is due to an influx of lenders in the sector now lending in Scotland. Rates are available from 0.49% per month for regular bridging loans, and even lower from private banks. Loan to values are generally up to 75% of value. Scotland is also known for Below Market Value (BMV) bridging transactions, Belgravia Property Finance has successfully arranged 90-100% funding toward below market value purchases in Scotland.

The loans are unique

What makes a bridging loan unique is that it is a flexible product that is usually structured on bespoke terms that are unique to the specific lender, borrower and circumstance under which the loan is being taken. The loan will also be an interest only loan because it is simply to cover other funding which once available will be repaid on the terms set by a different lender.

Bridging loans in Scotland are designed to provide access to funding secured against property, therefore they can also be structured in different ways to include the security. Funding can be procured on either first or second charges or both. It is even possible to structure a loan across multiple properties. Furthermore, any type of property can be considered for a loan and almost any borrower circumstance will be considered by the lender.

Newcomers to the market

The financial crash that caused the credit crunch worked as a catalyst to bring about new innovative bridging products, even and especially in Scotland. New entrants to the market have forced change and a rethink of how the bridging loan market in Scotland is developing. This is why lower interest rates have also been seen in more recent years.

There are still far fewer lenders that will provide bridging loans in Scotland, compared to England, but the lending scene has improved substantially. Belgravia Property Finance has access to bridging loans that are unique and can connect you with different opportunities in private funding. There are even funders that will cover bridging loans in Scotland as well as England, Wales, the Channel Islands and much of Europe.

Differences in Scottish property law have made it difficult for bridging lenders to provide loans across the UK. The few that do are specialists and are often accessible only through a specialist advisor.

What are bridging loans in Scotland for

Bridging loans are typically provided for

  • Scottish commercial properties
  • Landlords that are building property portfolios both in England and in Scotland.

Applications for a bridging loan in Scotland will not follow the same procedure as applying high street mortgage . When using an expert broker, you will find that the confidentiality and sensitivity is increased. The level of professional conduct provided and expected is also much higher. Applications are processed quickly because bridging situations often accompany a sense of urgency. There are situations that without a rapid solution, transactions may in fact collapse. Something we would seek to avoid for our clients at all costs.

The typical bridging loan covers around 70% of the value of the property against which it has been secured. There are unusual situations however, when the loan will cover 100% of the value of the property. This is the one similarity that can be seen with high street lenders.

Deals can take as little as a few days to finalise. They can however be expected to take between seven and fourteen days.

How bridging loans work

Most bridging loans come in one of two forms.

Firstly, there is the closed bridging loan. This kind of loan is aimed at borrowers that have already completed an exchange on the sale of a property. They do however need the finance to secure the transaction. This type of bridging loan is easier to find and negotiate because risk to the lender will be reduced.

In the second instance, the bridging loan is known as an open bridging loan. These are provided in situations where a borrower has found a property that they wish to purchase. Their problem is that they but have not yet sold their own property. Because of the increased risk of the first home not selling most lenders are reluctant to offer bridging loans when this happens. The probability of acceptance for an open bridging loan increases with the more equity the borrower holds in their property.



Limited Company Buy to Let Mortgages in Scotland

Multiple Changes in Regulations

The recent changes in taxation surrounding buy-to-let property have really set the cat amongst the pigeons, mostly because they have appeared to penalise individuals and not limited companies. Of course, it’s far too complex to apply a blanket statement on this issue, but more recently a whole range of new regulations are also about to come into force.

From the 1st October 2017, underwriting for portfolio landlords will require a new and specialised approach when applying for mortgages. According to the Prudential Regulation Authority, a landlord is a portfolio landlord if they have four or more mortgaged buy-to-let properties, whether as an individual or as a limited company.

The Prudential Regulation Authority is a part of the bank of England that regulates and supervises approximately 1500 banks, building societies, investment firms, insurers and credit unions. Apart from facilitating competition, the PRA also exists to ensure that all parties are protected within the regulatory provisions.


Scottish Law is Different

Deciding to purchase a buy-to-let property in Scotland can complicate things a little further for both the new landlord and the established portfolio landlord, and depending on the status of the landlord (individual or limited company) obtaining a mortgage is likely to require some specialist help.

Because Scottish property law is different to the law elsewhere in the United Kingdom, you are likely to find that you’re going to need some help finding the right source of funding. In Scotland, you may discover that buying a property seems to be done in reverse when compared to the rest of the country.

Furthermore, in Scotland, the surveys and valuations are taken out at the expense of the purchaser before an offer is made. An offer in Scotland is called a missive. This may seem to be a rather risky business for a potential buyer when paying for a survey when they can’t be 100% sure that they’re going to make an offer on the property. The advantage of this is clear though. Only a serious buyer will start the process of valuations and surveys, and the likelihood of gazumping is dramatically reduced as a consequence.

The other concern is that after incurring the expense, there is a risk that the owner may turn down the offer.


Buy-to-Let Financing Systems Fail Scottish Landlords

It has become clear that buy-to-let lenders have been holding their cards close to their chest with changes taking place from all sides. Scottish property already has a reputation for the difficulty experienced in obtaining buy-to-let mortgages, landlords are not holding their breath to see what happens when the new regulations kick in later this year. As it is, many buy-to-let lenders do not have systems in place that are structured to cope with the buy-to-let market and purchasing process in Scotland.

For those in the business of buying to invest and then rent to generate income, the buy-to-let mortgage market can become a minefield. It is best to find an experienced and knowledgeable financial advisor and mortgage broker. These professionals must stay on top of the changes in both property regulations and taxation laws.


New Tax Rules Offset by New PRA Regulations

Experienced portfolio landlords express frustration at the continually changing fiscal landscape in which they must run their businesses. They find it worth their while to use the services of financial advisors that can weigh up their situation particularly as registered limited companies. For many of them, the reduced effects of the new tax rules on buy-to-let mortgages for corporate entities seem to have been completely negated by the difficulties that the new Prudential regulation rules bear upon them.

It seems that both individual landlords and limited company landlords have to face similar problems, just simply in reverse. The biggest hurdles are not only finding a buy-to-let lender, but also finding an affordable product that will make the lending process worthwhile, enabling even the corporate landlord to continue to generate an income from their portfolio.

There are four very active lenders in Scotland who finance this area of property purchasing specifically to corporate landlords reliably. They are Keystone Property Finance, Shawbrook Bank, Precise, and Aldermore Bank. Belgravia Property Finance also work with dozens of other lenders, including private banks for HNW buy-to-let mortgages in Scotland.

These lenders are particularly good when seeking funding for complex property situations such as multiple units and HMOs.

It is ill advised to attempt to purchase a property in Scotland as a corporate landlord on your own. Our financial advisors and property finance brokers are the best people to speak to. Speak to us first and if you’re in the process of exploring Scottish property call us now.


SPV Limited Company Buy to Let


When landlords start out they will come across the term SPV Limited Company Buy-to-Let, which means Special Purpose Vehicle, a limited company for buy to let. There are multiple options in terms of how they can trade. Some will choose to operate as individuals, others as limited companies, and others as SPVs.


Difference Between an SPV and Limited Company

Before deciding whether an SPV is the suitable business structure, it is important to understand the difference between an SPV and a trading limited company.

A limited company will usually conduct business, have employees, buy and sell a product or service and function as a trading business.

An SPV company does not trade. It is simply an entity through which to buy property for the purpose of letting the property. The only revenue which goes through this company is letting revenue.

There are buy-to-let landlords that will purchase property within the framework of an existing limited company that is trading. They will have very specific reasons for doing so. Nevertheless, a new landlord wanting to set up a new business will normally be advised to consider an SPV.


SPV Limited Company for Buy-to-Let

There are mortgage products available for individual landlords who operate as sole traders, for trading limited companies, and for SPVs. The majority of buy-to-let mortgage products, however, are available to SPVs and this is the legal framework that most financial and lending institutions prefer.

Buy-to-Let mortgages provided to SPVs are quicker to process and easier to obtain. This is because the underwriting process is a lot simpler than when a private limited company or a sole trader apply for a BTL mortgage.

Underwriters who specialise in buy-to-let mortgages also have a specialist understanding of SPVs which makes the process quicker. Because there are more product options available to SPVs, pricing is inclined to be lower, making it a far more competitive market in which to be seeking a mortgage.


SIC Codes

Underwriters will check to see that the SPV limited company is registered at companies house under the correct SIC code. The SIC (Standard Industrial Classification) code is issued at registration to classify the type of economic activity that the company engages. For a buy-to-let SPV, this code would be for letting property. This code will be used when submitting your annual return to companies house and you will select it from section L, under real estate activities.

The two SIC codes that funding institutions prefer to see are 68100 – this is buying and selling of own real estate and 68209 – this is other letting or operating of own or leased real estate. Even though SPVs are favoured by lending institutions when it comes to buy to let mortgages, the directors will still have to provide guarantees in the same they would for a trading limited company.


The SPV Limited Company Name

It is interesting to note that the name of the company also influences how SPV limited company buy-to-let underwriters view your application. Apparently, a real no is having the word development in the name, the name should be neutral and remain relevant for the lifetime of the SPV.

This is advice that is given by mortgage consultants so remember, if you’re going to invest in buy-to-let property through an SPV, it’s a very good idea to speak to a specialist broker.


Registration and Cost

Registration is easy and costs are low. While you can do it all by yourself, it is advisable to take the advice of a buy-to-let specialist first or possibly even let them do it all for you. This will ensure that all the correct information has been submitted and that there will be no errors to reverse at a later stage.

When deciding whether you wish to consider proceeding with your buy-to-let business within an SPV, it is critical that you get the appropriate advice from a tax consultant. Most investors in buy-to-let property invest to enjoy the tax benefits, however, it is never that simple. Obtaining advice before you register an SPV will save you the frustrations and difficulties with undoing hastily made decisions later.

In most cases, an SPV is considered the best route to follow for your BTL investments, there may, however, be the rare occasion when this is not a good idea and will take the knowledge and expertise of an expert broker or tax accountant to help you decide.


Ltd Company Buy to Let Stamp Duty

For a limited company, buy-to-let stamp duty has become one of the biggest incentives that dictate how they will continue to trade as a landlord.

There have been huge changes in the regulations covering the buy-to-let market. The most immediate has been on those landlords that are individuals. Buy-to-let landlords usually trade either as a limited company or as an individual.

Together with changes in the tax structures surrounding mortgage interest and the Prudential Regulation Authority’s new rules surrounding lending, buy-to-let landlords must also consider the implications surrounding stamp duty and how they are affected.


Change Has Been Swift

Usually, changes in tax and other fiscal regulations are introduced slowly over several years. Changes in successive governments has meant that each has applied their policy to do everything possible to cover the deficit. Consequently, there have been quite a few rapid changes in regulations governing, tax, lending and ancillary factors such as stamp duty.

Landlords that have comfortably been running their businesses as sole traders are now faced with the stark reality of higher overheads, that could not have been anticipated a few years ago. One of the big changes is the liability for stamp duty.


Individual Landlords and Stamp Duty

In April 2016, stamp duty for private individuals increased by 3% across the board whether they were parents co-signing to help a child onto the property ladder, a second home buyer, or someone buying to let. So, the increase jumped from zero percent, two percent, five percent, ten percent and twelve percent to three percent, five percent, eight percent, thirteen percent and fifteen percent respectively, on buy-to-let properties and second homes.

On paper, this may not seem to be very much, but the higher the value of the property, the steeper the bill becomes. Consider a landlord that already owns property buys a new property for £260 000. At three percent of the first £125 000, they would pay £3750. On 5% of the following £125 000 they would pay £6250, and on eight percent of the remaining £10,000, they would pay £800. Compared to the previous stamp duty costs, they would be paying over three times more.


Ltd Company Buy-to-Let Stamp Duty

Ltd company buy-to-let stamp duty has not been exempted from this change. This means that, regardless of the legal structure of the buy-to-let business, all landlords will continue to incur this cost when purchasing new properties for their buy-to-let portfolio.

Established individual landlords may face a dilemma when counting the cost of the changes. If they already have a large portfolio, transferring their properties to a limited company could have substantial capital gains tax and, of course, the new stamp duty scales.

Furthermore, there have been indications that limited companies will become liable for the higher rate of stamp duty on the first property purchased, meaning that individual landlords at least enjoy relief on their first property.


Thinking Out of the Box

Several scenarios arise from the combination of all these changes. Apart from having to consider the likelihood of further changes in the near future such as the first property being included in the higher rate stamp duty scales, conversion to a limited company to enjoy the tax benefits may not necessarily be the most prudent move to make.

Thinking out of the box, however, some landlords may choose to retain all their current properties as an individual and set up a limited company or an SPV – Special Purchase Vehicle – to at least enjoy the tax benefits of future investments.

The types of properties that the landlord invests in will also be affected by changes. Mobile homes, caravans, and boat houses will not be affected by the changes. This would mean that unless the landlord has a very specific niche in these areas of property, there is no avoiding the stamp duty liability. That is, of course, unless the landlord has a first property valued at below £40 000.

When considering how stamp duty will affect you as a landlord, it is a good idea to take into consideration all the factors that influence how you operate. If you are starting up as a new landlord then setting up a limited company will almost certainly be the best route to take. You will be affected as a limited company in the same way that an individual landlord is, however, the tax implications on both mortgage interest and corporate tax may well mitigate the expense of stamp duty.


Get Expert Advice

It is best to speak to an expert who can take all your circumstances into consideration including the size of your current portfolio. If you are a new landlord you will need specialist advice as you will also experience the stricter lending regulations that come into force from October 2017.


How Aldermore Are Approaching the New Buy to Let Regulations

Aldermore is a key lender in the buy to let market, uniquely marketing their financial products to corporate landlords that are limited companies.

They also offer buy to let mortgages to individuals and other legal entities, however, they have recently focused on how they are going to implement the new Prudential Regulation Authority regulations to corporate landlords.


New Regulations Since January 2017

Aldermore has been proactive in implementing the new regulations as they became effective in January 2017. The regulations are being gradually implemented most likely to allow brokers, financial advisors, and even professional and corporate landlords time to adjust.

The regulations now require stricter criteria when lending for buy to let. The regulations, however, are now quite specific about buy to let landlords and specifically portfolio landlords. According to the PRA (Prudential Regulations Authority), portfolio landlords are those that have four or more buy to let mortgages within their property portfolio.

Mortgages against personal homes, holiday lets, commercial, mixed use property, and second homes are excluded from these criteria. However, where property is held within a limited company where a borrower owns 25% or more of a share, this is included as a portfolio landlord.


Additional Documentation Requirements

There has always been a requirement to produce documentation when applying for a buy to let mortgage. The regulations are now quite clear about the requirement to produce even more documentation.

The borrower’s full business plan and complete details of the borrower’s current portfolio are also required. Although the requirement means that there will be more “paperwork”, digital or otherwise, Aldermore is making the effort to streamline the process for their clients.



Aldermore has provided templates that are easy to use and understand and contain all the straightforward questions that cover the information that is required under the new PRA regulations.

The borrower is asked to provide information relating to the proposed security and their entire portfolio for the following twelve months. These templates are not tick-box solutions, and the questions should be carefully considered when the template is filled out.

The underwriters at Aldermore will be taking particular note of these answers not only to fulfil the new regulations but also to ensure that they are lending responsibly and securely. As the newer regulations come into effect in October 2017, more lenders are expected to take on the approach that requires templates to be completed, easing the requirement for additional information on both borrowers and lenders.


Cash Flow Forecasts and Asset & Liabilities Statements

Most lenders are expected to require a cash flow forecast, supported by a complete statement of assets and liabilities. Aldermore will require both a statement of assets and liabilities and a cash flow forecast when the borrower has eleven or more mortgages on buy to let properties with them.


Portfolio Reviews

An entire portfolio review will now be expected including at background properties. This will include properties that have been mortgaged with other lenders. Overall, this exercise will become one of affordability and risk, a task that has now become a requirement under the new regulations.

Additionally, Aldermore will include a closer look at calculating a weighted interest cover ratio for the entire portfolio based on single units in individual names – 145%, single units in company names -125%, HMOs in individual names at 185%, and HMOs in company names at 155%. These will all be applied with a stress rate of 5.5%..

Because the properties are reviewed in aggregate, if one property doesn’t quite work out in the calculation but another has the surplus value to cover it, Aldermore will consider lending. However, if across the board the figures don’t add up then the risk will be too high and Aldermore will not lend.

It is important to remember that this is the approach of Aldermore. They have been transparent in their approach in light of the implementations of the new regulations and, in time, other lenders will also offer their approach to providing buy to let mortgages in the light of the new regulations.


Expert Advice

With the implementation of the new regulations already under way, it is now obvious that corporate and individual landlords alike are going to need to consider expert and unbiased advice when seeking new mortgages or when they want to remortgage. The regulations are fully implemented from October 2017, and compliance will affect both the landlords as new borrowers and lenders.

Obtaining the third-party advice is likely to become the turnkey solution for not making any mistakes in the process. If you have any questions about this topic or would like to make an enquiry about buy to let financing, please contact us at your convenience.


How To Finance Hotel Construction

Hotel construction finance in the UK and Europe can be arranged with rates starting at the Bank of England base rate +4% for the construction phase and rolling onto a term facility at only 2-2.75% over Bank of England base rate for the remaining agreed term.

The amount raised against construction is normally based on a % of total project costs including construction costs but also considers how much the final facility amount will be, which is based on a multiple of EBITDA.



Presentation is essential, and it is important that the following documentation is ready to present to banks and other lenders at the initial enquiry stage;

  • A cost appraisal, normally in Excel/Worksheet format
  • A business plan/funding proposal
  • Directors CVs/business experience
  • Assets & liabilities statements for the directors and shareholders
  • Details of contractors
  • Architects plans
  • Details of all professionals involved i.e. architect, project manager, structural surveyors etc.

Belgravia Property Finance ensures that the initial enquiry is presented in the best possible way with enough detailed information for lenders to become interested parties in the project.


Renovation of an Older Property

Considerably cheaper in terms of the build cost than ground up development, and in many ways easier to fund, many hotel developers are renovating existing hotels or obtaining permission to turn commercial buildings such as offices into hotels. The benefits can be significant with this approach.



Mainstream banks are a major source of funds for hotel construction and development finance, however, there are many challenger banks and private development finance companies that offer products that banks do not.

The benefits of non-bank and challenger banks products are that a higher percentage of total project costs can be raised, and lenders may be more flexible towards clients with less development or hotel investment experience, albeit rates and fees will be slightly higher than mainstream banks.


How Does Auction Finance Work?

When you’re looking to buy a house through an auction, you’ll need to be able to pay up a 10% deposit for the property on the day, and then pay the rest of the cost within 28 days to settle into the new home without any problems.

Now, the first thing people might try and do is mortgage their home to find the funds for this course of action, but it isn’t always as straightforward as this. To make the endeavour possible, some people need to use what is called auction finance. We’re taking a closer look at it, to try and see what you’d need to do if the situation arose that meant you would need auction finance.

Auction funding is available up to 80% loan to value at rates from around 0.44% per month if a fast completion is required.


How Does Auction Finance Work?

To begin with, it’s important to remember that auction finance is a rapid way of getting the funding together when it may not be possible for your mortgage company to sort out the mortgage within the 28-day window.

What you’ll come to find with auction finance is that it usually allows you to get access to around 70 – 75% of the purchasing price, which means that you’ll need to find the remaining amount for a deposit. Before the auction begins, you should speak to a finance broker and see if you can get finance for the property you intend to buy.

This is dependent upon several factors. These can include things like the location of the property you intend to try and buy, as well as the type of property you’re looking at, for example, if it is a bungalow or a three storey property.

As well as this, how you intend to repay the loan will also be considered when assessing your chances of getting financed, and the amount of money you want to borrow is also going to be considered. To a lesser degree, it is not uncommon for finance brokers to look at your credit score, as well as your experiences in this field, although the former is not a massive influencing factor.


What Happens Next?

Once the finance broker has looked at the above information, you’ll be made an offer on principle, which is an offer you can take with you to the auction and make to try and get the property.

If you do manage to get the property in the auction, the firm who is financing you will step in and make a formal evaluation of the property, and then they will be able to make you a formal offer for your finances. From there, it’s usually a case of allowing specialist solicitors to step in and begin sorting out the paperwork for you.

Overall, this is a basic explanation of how auction finances work. It is usually a question of being evaluated to see if you’re suitable for the finances and then winning the property in the auction so that an official offer can be made and accepted. If done correctly, the entire process is relatively straightforward and can help you to get the property you’re looking for.

The cost of auction finance is generally no more than standard funding. However, it is important that the only lenders that will generally complete within auction contract time scales are bridging and short term lenders. Rates start at around 0.44% per month for very low loan to value deals.


Everything You Ever Wanted To Know About Bridging Loans

Bridging loans are designed to be a short term solution covering situations where a debt is due but the credit to cover it has not yet become available or a permanent solution for property developers and investors to fund their short term development projects. A bridging loan will fill this gap and allow a transaction to progress to completion, preventing the potential collapse of the sale. Belgravia Property Finance source rates from 0.44% per month.


Who Needs a Bridging Loan?

Bridging loans have traditionally been available to property buyers in all sorts of circumstances, including individuals needing to pay for a new home before their current home has been sold. It is now far more common for bridging loan products to be aimed at the asset rich property buyer, property developers, and landlords that want a simple straightforward and quick solution as they turn their properties over.


A New Breed of Lender

Following the credit crunch of 2008, banks have been reluctant to provide these kinds of loans to customers across the spectrum and, as a consequence, a new generation of specialist bridging loan providers have emerged. These specialists also target clients that are buying at auction of fast turnover developers that buy properties to improve them and then sell them again a few months later.


The Cost Effect

The core reason why bridging loans are not ideal for everyone is that they are high-interest loans which can cost from 0.44 – 1.5% per month. Additionally, there are also likely to be some rather heavy administration fees added to that too.

While bridging loans are quite commonly looked at as a funding instrument for buy to let and other property instruments, they have also become more common for the personal homebuyer, because banks and building societies on the high street are simply taking much longer to make lending decisions, when the home loans are larger than average.


Beware of Precarious Lending

For some, this may seem to be an attractive alternative when they struggle to obtain mainstream finance. However, for obvious reasons, this kind of expensive loan is not the ideal solution over a 20-year plan. In fact, it is also possible that those that take a bridging loan while negotiating a high street mortgage can find themselves trapped in a very expensive loan situation if the effort to find suitable high street funding fails for any reason.

If things go wrong you could find yourself having to sell the property and it is important to have an exit strategy when taking the loan out in the first place. These situations make it clear why bridging is ideal for developers and buy to let landlords, but only in very specific circumstances for individual property buyers. Concerns have been voiced that some lenders are far too quick to offer this type of loan to inexperienced and vulnerable customers.


Ask an Expert

It really is important to obtain experienced expert and professional advice when considering this route, whether it is to truly close a gap between finding solutions or turn a property over quickly as a developer or property investor. Even the experienced property developer can sometimes make a mistake.

The idea of consulting with an expert lies not only in the fact that the expert will be able to help you find the best deal suitable for your specific situation, but they will cover several other options that you will need to consider such as your exit strategy and what contingencies you should consider should anything go unexpectedly awry.


Where to Look

It’s always best to use an FCA regulated broker such as Belgravia Property Finance because bridging lenders come in all shapes and sizes and it really is possible for the uninitiated in the world to end up with an unregulated unscrupulous lender. By using a recognised broker, you will have a professional that must comply with professional standards that have an impact on his or her business.

Rather than hunting through the back pages of a newspaper, or in the dark corners of the internet, you may be surprised to find that your broker can recommend a good specialist lender. Of course, the sign of a good broker is certainly one who will tell you when this type of finance is not suitable for you, whether you are in the loan market for personal or business reasons.


Government urged to launch regeneration finance fund

The government has been urged to launch a regeneration finance fund in the UK to help promote redevelopment.

Centre for Cities, a research group, has argued that government spending cuts and a dip in private sector investment have left a gap in commercial development finance, and that fresh input is needed to kick-start regeneration in city centres. Centre for Cities says a regeneration finance fund from the government would boost development such as offices, houses and other projects which would generate jobs.

Urban Development Funds are now available but only in certain areas of the UK – only half of British cities are covered so far and some argue that the funding is “patchy”. In fact, some of the UK’s major cities don’t yet have access to the funds but could benefit from redevelopment finance – these include Newcastle, Leeds, Birmingham and Bristol.

The report suggests that the funding pool could be made up of European funds, public money and investment from the private sector. It says that traditional grant funding could be used alongside the regeneration finance to boost redevelopment.

Alexandra Jones, chief executive of Centre for Cities, said, “A new national urban development fund would offer Government a way to invest in the development and regeneration our communities need without increasing net public sector debt.”

She added, “As the Chancellor looks for innovative ways to balance the books before the spending review this summer, a national investment fund could offer a complementary approach to traditional grant funding to support local development.”