Equity Sharing and Partnership Schemes

Abstract

As we have already seen, the traditional policy of property developers was to retain the full equity in both their development and investment activities, mainly by means of fixed-interest debt finance raised principally by mortgage or by the issue of loan stock. This process maximised equity growth and returns for shareholders and, in the early post-war conditions of rental growth and accelerating inflation, proved highly lucrative. Paradoxically however, it was inflation and the success of developers which led to the gradual decline of a financing system based almost exclusively on debt.