The poll conducted by Development Finance Today discovered that 33% felt that there were enough lenders offering finance for that type of development.

Earlier this year, it was reported by Halifax Insurance that planning applications for basements had risen by 183% since 2012.

Despite this, Stephen Burns, director at Adapt Finance, agreed with the poll result regarding the lack of appetite and said it was something the broker was finding too.

“I would say exactly the same in regards to roof-space developments too.

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“We can and do, however, understand the lenders’ viewpoint.”

What issues might put lenders off basement developments?

Stephen added: “Basements are space, but realistically not prime space and in an uncertain market, how will this space be judged if things take a tumble?

“Basement space judged to be at the correct value before and after work remain viable, both in extensions to existing and new projects.

“Trust your valuer is my advice.”

Paul Riddell of Lendy said that there were a number of complications associated with basement developments, the main one being cost.

“Usually, in any development, significant costs and/or problems can be generated/found in the ground.

“For example, the ground may be contaminated or may be unsuitable for development without significant ‘piling’ or preparation.

“Therefore, preparing the ground/site for development can be one of the most expensive elements of any development.”

Scott Marshall, managing director of Roma Finance, agreed that basement developments could be a bit more difficult than some other property conversions as there were more planning and structural points to consider.

“There can also be more delays with the local planning department and engineers, but the benefits can often outweigh these.”

What are the benefits of financing basement developments?

Paul added: “Basement developments – along with loft conversions – remain an increasingly popular way of ‘extending’ and adding value to a property, especially where the property/site is restricted in size for normal extensions.”

Scott agreed that when a project is well managed, basement developments can add significant value to the property.

“If the customer is looking to sell once the basement is completed, then they could realise a significant profit.

“The other route to consider is when the property is being let, and a basement can increase the rental yield of a property by increasing the amount the property can be let for, or it can become a new rental unit in the same property with its own entrance.

“There are opportunities and basements can add real value as long as the project is carefully managed and all parties go into the project knowing what they are aiming to achieve.”