Development Finance – Property Development Funding

Bridging finance and development finance for new and existing developments is used to build a new building or convert an existing building into habitable properties. This can be residential houses, shops, offices, or industrial buildings. It can be for investment purposes or owner-occupied to re-sell on to the general public. You can be an experienced developer or builder or a first-time developer looking for property development finance. Lenders do tend to favor developers that have existing experience as it shows they can complete any developments that they start. Below is a list of types of developers but there can be many more not listed here:

  • An experienced developer who has been doing this for many years and has a very good track record on previous developments.
  • An experienced builder by profession who has purchased land and wants a loan to build houses or flats that he will build and sell. The developer may or may not have built from scratch before but if they have a good building manager that will be a great advantage.
  • Someone building their own home from scratch rather than purchasing a ready-built home.

The maximum you can borrow to purchase the site is anywhere between up to 70% of the purchase price depending on the project. The site would need to have property development planning in place from the local authority but it can proceed subject to planning. It is possible to borrow up to 100% of the build cost provided that it is around 70% of the Gross Development value (GDV) depending on the lender and the developer’s experience. This of course is set on a case-by-case basis according to experience. The maximum term you can borrow for development finance is between 12- 24 months. The development finance exit is usually the sale of properties or refinancing them and converting them into buy-to-let portfolio lending if the property developer wishes to keep them.

Key Features of Our Development Loans

  • Development loans from £500,000 upwards to £50m. Can be lower upon development location and property style.
  • No property lock-in means you can repay the loan without incurring any early repayment charges
  • No lending exit fees with certain lenders
  • No experience is required provided an existing building contractor contract has been provided
  • Development Funds are provided in draw-down stage payments
  • Developers can use other properties as collateral to fund new developments

With property development finance the valuations tend to be pricier than the other types of residential and buy-to-let valuations and takes up to 7 to 14 days after a visit to reach the lender.

Development loan rates will vary depending on the project and experience but can be negotiated in certain instances.

Whole Of Market Development Finance

You may have just been granted development planning permission and been given the green light so that you can finally go ahead with a brand new building project or you are a couple of months from the finishing line with an existing development of the property. The chances are that you will typically need to raise additional funds such as UK development finance at some point to get to the stage where everything is finally completed. We can assist with lender mezzanine finance in some instances to secure you a higher loan amount.

Whether you are:

  • An experienced developer or first-time developer
  • Looking to develop your first property with friends or family
  • Buying at property auction to refurbish and flip on for a profit
  • Building a property portfolio over several years
  • Part way through development and in need of funds to complete
  • Converting an office block to a residential under Permitted Development Rights
  • Developing student halls or single units

Why use us?

  • We have the experience to see the deal through to drawdown
  • Dedicated development finance team
  • 100% of build costs funded
  • Up to 75% of the land purchase price and 100% with additional security
  • Funding from £500,000 with no upper limit
  • We are the whole of market so can get the best deal for your development
  • No upfront application fee

Obtaining Property Development Finance

Regardless of where you are in the overall scheme of things, finding a suitable source of development finance is one of the last things that you want to be worrying about. You will no doubt have enough on your plate with the day-to-day running of things making sure everything is going according to plan and that everyone is pulling their weight whilst carrying out their delegated tasks appropriately as you head towards your end goal.

In terms of usage, property development finance may be required for anything ranging from newly built residential projects, mixed-use buildings, and strictly commercial developments to the purchase of existing land or buildings that need to be refurbished to an exact specification within a set timeline. It can either be arranged outright at the beginning of the project or halfway through a building development and it is typically paid out in increments at varying points towards completion.

When applying for development finance the main considerations on the lender’s behalf are the assets you can offer as security and your ability to show how feasible the project is. The lender will also require additional information including how long the project will take to finish, the end value, and a breakdown of all of the costs involved, including reasonable allowances for any unexpected or incidental expenses which may incur.

Once you can show that your project is worthy of investment in terms of economic viability and profit margin, you will also need to prove that you have the relevant planning permission and the experience to get things completed. If your own experience is somewhat limited then this is not usually too much of a problem as long as the people who are working for you have a proven track record with good credentials. This will include everyone ranging from the architect, and your chosen project manager through to the actual builders themselves who you will ideally be employed under a fixed price contract to provide peace of mind for both you and the person who is lending the funds.

With this in mind, you must find a property development finance broker who is highly experienced with access to a wide and varied panel of lenders experienced in providing development loans. Investors who are open to participating in any type of property development project regardless of size, scale or predicted time frame.

We Compare Lenders Providing The Best Development Loan Rates

Having developed a long fruitful relationship with all the top lenders in the UK allows Platinum Global Bridging Finance to deliver the best rates for bridging finance and development finance.

We are always willing to go the extra mile to ensure that the needs of the borrower and lender are met with a minimum level of confusion and misunderstanding. This includes arranging bespoke property finance packages which are tailored to your specific needs whilst still maintaining a decent level of flexibility. We can also help to ensure your application is a success by offering invaluable help and advice as and when required.

100% Development Finance

Platinum Global Bridging Finance can arrange 100% development finance providing there is extra security available for the loan. If there is no extra security available then there needs to be sufficient profit to work with once the property development is completed. Industry-standard from UK lenders to fund is 70% of the land value and 100% of the total build spend. We can arrange further funding through mezzanine finance depending on your situation. Make contact with our advisers should you wish to inquire further.

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    Development Finance November 6, 2019