The Welsh Government has announced a new £10m Property Development Fund to help new developments get off the ground. Managed by Finance Wales, the new fund will be open to both commercial and residential projects.
The fund has been established in response to high demand for funding from smaller developers, who are struggling to secure funding from the private sector.
Intended to be an evergreen fund, loans will accrue interest and capital payments, typically on periods of between 12 and 24 months. Interest payments will go straight back into the fund and become available for other projects. Over five years, up to £30m of investment is expected to have been made available.
Funding will be considered on a case-by-case basis, but it is expected that funding of over £1m per project is unlikely.
Estimates suggest that the new fund could safeguards around 700 jobs and create 900 more. The total contribution to the Welsh economy as a result of this investment is thought to be around £19m.
Welsh Business Minister Edwina Hart, said: “The Welsh Government is committed to supporting business growth and we listen to business. This fund meets a real need to help small-scale property developers access much-needed finance to fund development in both the commercial and residential markets.
“Construction is one of our key sectors with the potential to make a significant impact on the economy. The industry plays a vital role in delivering a vibrant economy and a quality environment.”
As many of our buy to let insurance customers in the region will be aware, investment in such projects is likely to create exciting new opportunities for the future.