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Property Development Finance – Recent Examples

Property Development FinanceThe following are recent examples of property development finance deals completed by our partner companies. We do not charge for our services in respect of placing your property development finance enquiry with an appropriately qualified Commercial Finance Broker so please feel free to make an enquiry. All of our partner firms are members of the NACFB (National association of commercial Finance Brokers), they carry Professional Indemnity Insurance and subscribe to the NACFB Code of Practice which is registered with the Office of Fair trading.

Development Finance Example One

  • £500k draw down facility on £1m GDV (Gross Development Value) with a max loan 50% of the purchase price and 100% of the build costs
  • 6.99% per annum (no minimum term and no early repayment charges)
  • No Exit Fees
  • 2% of the loan amount Lenders arrangement fee

 Development Finance Example Two

  • £1million draw down facility on £2.2million Gross Development Value (max loan 50% of the purchase price and 50% of the build costs)
  • Interest rate payable 4% over Bank base rate per annum (no minimum term and no early repayment charges)
  • 0.75% Exit Fee (calculated on loan amount not GDV)
  • 1.5% of the loan amount Lenders arrangement fee

Bridging loans are also still widely available up to 65% Gross Development Value (the final finished value of the project) for major conversion work through to light refurbishment.

If you require assistance with development finance please use the contact form linked from the badge below and we will do our very best to help.


Comments

  • Hi all, just hoping someone might be able to advise me on some possible options.

    I currently have a residential joint mortgage with a friend on a 2 bed flat in London, we have planning permission to convert the property into 2 separate dwellings, one 2 bed flat (with the aid if an extension) and one 1 bed flat, planning and building regs all approved.

    However we’re not sure what the best approach to move forward with the project. Ideally we would like to do the full conversion and create 2 separate titles and let out both flats and go and buy a new property each on our own.

    The problem is that our lender will obviously not allow us to create 2 separate titles with our existing residential mortgage so the one choice is to get a bridging loan to pay off the entire mortgage, do the works, split the titles and then re-mortgage on both properties somehow although I don’t think a single lender will give us 2 buy-to-let mortgages in the same building, however the cost of a bridging loan for say a 12 month period would cost at least £60k-£70k just in interest payments and arrangement fees which ideally we want to avoid.

    Another option we are thinking of is to do the extension works and the majority of the renovation under our current residential mortgage (although I appreciate this is slightly risky should the lender find out) without officially creating 2 flats, then maybe getting a bridging for just the time it takes to create 2 new titles and arrange 2 buy-to-let mortgages.

    Can you advise on a couple of possible routes we might be able to go down to avoid having to get a bridging loan and having to pay off the entire mortgage before being able to split the titles.

    Also just to mention that our credit rating isn’t good at the moment due to historic arrears from the recession etc…

    Current mortgage is £300K, building costs £70K-80K, value after works should be around £900K, current property value is approx. £500K.

    Many thanks in advance!!!
    Mike


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  • Hi Mike,

    If you send me your best contact details and telephone number offline I will need to get one of our NACFB member commercial finance brokers to give you a call. npatterson@property118.com

    As ever the answers can only be found in the detail when we have all the information.

    Please don’t start building without the residential lenders consent though


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