Two of the city's biggest developers have warned that the economic climate will have a chilling effect on Bradford's regeneration.
The uncertain market, fuelled by high interest rates on construction loans, will usher in a period of caution among those looking to carry out large city centre schemes.
Developers say the high interest rates, heavily influenced by the London Interbank Offered Rate (Libor), are a factor because many in the building industry borrow using floating-rate debt linked to Libor.
Russell Baker, managing director of Asquith Properties, said: "Banks are very wary of lending money for any large city centre schemes, because it's a very risky business at the moment."
The cost of borrowing for developers has increased by 1.5 per cent according to Mr Baker, whose company carried out the Gatehaus scheme, in Leeds Road, and is looking to start work next year on the Citygate project, in Manchester Road.
He said: "Sale values have dropped and valuers are being given notice to undervalue by 20 per cent minimum. We are going to have to be more pragmatic about where the market is. I would be interested to see anyone start a major city centre scheme in the current climate. I don't think anything fundamental is going to happen for 12 months. The game is up for the next year because investor confidence is not there."
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Harold Robinson, chairman of Magellan Properties, a partner in the Bradford Channel project, said his company was keeping a close eye on conditions but still planned to press ahead with the £450m scheme near Forster Square.
He said Bradford Channel Limited hoped to secure reserved matters planning permission for phase one of the project within the next few months and was looking to start work early next year - a move he said would boost confidence in Bradford.
How the Citygate project could look
Mr Robinson, also the founder of Bradford Property Forum, said: "Schemes have got to be realistic in the light of the market conditions. Everyone accepts that that's the case.
"It's a much more challenging time for regeneration. But companies like BCR and Yorkshire Forward, which have a regeneration remit, should come into their own in difficult times because they should be the catalyst to regeneration."
Maud Marshall, chief executive of Bradford Centre Regeneration, said: "I have no doubt that the current economic climate will have an impact on developers, as the banks are cautious about lending money.
"However, Bradford is a comparatively safe market compared to other cities, which are potentially exposed due to the over-development of office and residential properties.
"The potential that exists in Bradford, which is still in the early stages of regenerating itself, is not something that will disappear."
Mrs Marshall said Bradford had witnessed commitment from some of the world's largest developers. She said: "This is a macro-economic issue affecting cities and towns across the globe, not just Bradford, and I believe we are well placed to weather the storm."
Councillor Andrew Mall-inson, Bradford Council's executive member for regeneration, said: "It's a time for concern at a period when we are on the crest of some significant projects - Westfield being one of them. Because of the position Bradford is in, with lower land values and a better planning system in place, we can still deliver projects at a pace and cost that other cities can't match."
Posted by: House Price Crash, Bradford on 3:03pm Sat 10 May 08
Hurrraaayyyy.
It is good news that banks are returning to more traditional lending criteria. Over the last five years our economy has been built on reckless lending, and it has to STOP. An economy built on borrowed money is living on borrowed time.
Prepare for the DEPRESSION!
Hurrraaayyyy.
It is good news that banks are returning to more traditional lending criteria. Over the last five years our economy has been built on reckless lending, and it has to STOP. An economy built on borrowed money is living on borrowed time.
Posted by: cityhall, bradford on 3:05pm Sat 10 May 08
Dear Maud, go and have a lie down in a dark room - cities that are richer recover faster from economic downturns - otherwise we would all be living in Hull....
Dear Maud, go and have a lie down in a dark room - cities that are richer recover faster from economic downturns - otherwise we would all be living in Hull....
[quote][bold]House Price Crash[/bold] wrote:
Hurrraaayyyy. It is good news that banks are returning to more traditional lending criteria. Over the last five years our economy has been built on reckless lending, and it has to STOP. An economy built on borrowed money is living on borrowed time. Prepare for the DEPRESSION![/quote] depression isnt that what you suffer from 24/7?
House Price Crash wrote:
Hurrraaayyyy. It is good news that banks are returning to more traditional lending criteria. Over the last five years our economy has been built on reckless lending, and it has to STOP. An economy built on borrowed money is living on borrowed time. Prepare for the DEPRESSION!
Posted by: albion, west riding on 3:20pm Sat 10 May 08
[quote][bold]House Price Crash[/bold] wrote:
I predict house prices will crash 25% during 2008. Does anyone else want to make a prediction?[/quote] As mortgages are more difficult to get, it isnt going to help most people.
House Price Crash wrote:
I predict house prices will crash 25% during 2008. Does anyone else want to make a prediction?
As mortgages are more difficult to get, it isnt going to help most people.
Posted by: House Price Crash, Bradford on 3:20pm Sat 10 May 08
Skippy, no, a house price crash is good news for the young genertion who want to buy their own home and get on in life. Therefore, I am not depressed, I am positive and optimistic.
All young people should see this as positive news. It is the buy to let scumbags who are depressed.
Skippy, does this news article make you depressed?
Skippy, no, a house price crash is good news for the young genertion who want to buy their own home and get on in life. Therefore, I am not depressed, I am positive and optimistic.
All young people should see this as positive news. It is the buy to let scumbags who are depressed.
Skippy, does this news article make you depressed?
Posted by: goalkeeper, bradford on 7:48pm Sat 10 May 08
[quote][bold]House Price Crash[/bold] wrote:
Skippy, no, a house price crash is good news for the young genertion who want to buy their own home and get on in life. Therefore, I am not depressed, I am positive and optimistic. All young people should see this as positive news. It is the buy to let scumbags who are depressed. Skippy, does this news article make you depressed?[/quote] As skippy has already pointed out - unless house prices fall to levels where FTB's can pay cash they're still stuffed as they wo't get a mortgage!
House Price Crash wrote:
Skippy, no, a house price crash is good news for the young genertion who want to buy their own home and get on in life. Therefore, I am not depressed, I am positive and optimistic. All young people should see this as positive news. It is the buy to let scumbags who are depressed. Skippy, does this news article make you depressed?
As skippy has already pointed out - unless house prices fall to levels where FTB's can pay cash they're still stuffed as they wo't get a mortgage!
Posted by: born n bred, Bradford on 12:47am Sun 11 May 08
It's back, early 80's. Get a job, be in it for 3 years. show a few years of regular savings, and a good credit score....get a mortgage on top of your deposit saved. how it should be. I rented scrimpt and saved, had two jobs, then eventually got a mortgage. up until last year, get a job, be in it for 2 months get a mortgage, what's that all about!!
It's back, early 80's. Get a job, be in it for 3 years. show a few years of regular savings, and a good credit score....get a mortgage on top of your deposit saved. how it should be. I rented scrimpt and saved, had two jobs, then eventually got a mortgage. up until last year, get a job, be in it for 2 months get a mortgage, what's that all about!!
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