54% of SMEs stated that obtaining finance is the main reason for their home building project not being completed. Alternative finance is beginning to resolve this problem by offering small businesses access to the money they need in order to complete these projects.

The alternative finance provider industry is continuing to mature and develop in the UK. The traditional banking sector has faced criticism for its failure to serve SMEs in the property sector; there are upwards of 2 million small businesses in the UK, and up to 70% do not have access to finance.

These partnerships also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.

In the last 25 years, the number of firms building between 1 and 100 units a year has fallen from over 12,000 to fewer than 3,000.

That’s why the government has placed housebuilding at the heart of its long-term economic plan, to get homes communities want to be built and create jobs in construction and related industries.

1. Residential housing, is a universally global basic human need. 

Whilst property is not a liquid asset class, it is an investment well suited to long-term hold strategy which also makes it perfect for wealth preservation. 

"People will always need a place to live." 

2. Risk Mitigation 

Because of real estate's nature as a physical asset, as long as investors regularly conduct  property maintenance, keep up with mortgage payments where applicable, and take out appropriate as well as sufficient property insurance, it is highly unlikely that a real estate investor would lose their entire capital.  The same cannot be said for other asset classes.

3. Immediate and Regular Cash-flow & Maybe Even Profit. 

Unlike stocks and shares for example where an investor would have to wait for dividend distributions - assuming the company is doing well and opts to distribute dividends - with real estate he could and often will start earning cash flow immediately from rental income. 

If purchasing at auction or as a result of distressed sale or below market value, investors often have equity in the property from day #1 of acquisition. 

  4. Equity Capital Appreciation Over Time.  

Real estate investments can produce positive net cash flow each month if selectively bought and financially structured appropriately, they can also have the added bonus of equity build up over time,  whether be it form mortgage balance pay off from rental income or rising property prices, capital build up and preservation is inevitable. 

  5. Leverage & Financing Options Available Reduce The Barriers To Entry. 

The many financing options available as well as taking advantage of them is one critical success factor for many real estate investors. 

• Starting from as little as 20% deposit on a property and 80% finance on the purchase balance coupled with low-interest mortgage payments and even interest only payments.. 
  
• No money down if sourcing and managing the property or having a joint venture partner funding the 20% deposit.
  
• Alternatively other options such as rent-to-rent mean, whilst you do not own the property, you control and manage it,  therefore not even requiring a mortgage or the 20% deposit which could be a large lump-sum especially when just starting out. 

Should investors have adverse credit, which could make if difficult to get a mortgage, there are other specialist lenders and private bridging lenders that over-look this factor and could be a viable option. 

In contrast, if an investor wanted to buy £100,000 of shares, they would have to have this exact cash available vs real estate for a similar value property purchase where investor can have £20,000 cash and borrow the rest from the bank with all the other benefits inherent to this asset class.