Development Finance

In the recent past access to development finance has been depressed following the economic crash, but today we are just starting to enter a period where lenders are beginning to more freely provide funding for development and construction purposes again. In some cases it is now possible to find the funds you need on fairly inexpensive terms that will enable you to begin the construction and development activities you need.

Whatever your plan is, whether it is demolish an existing property and construct something new in its place, to build commercial or semi-commercial buildings from scratch, or work on a brown field site, or even to simply build residential property; we can release the funds needed for all your development projects. We have rates ranging from 4-5% per annum and the terms of our financing can be up to 24 months with possible extensions if needed.

With terms like this available, it is possible to use our financing options to put your talents and resources to excellent use to accomplish the development project of your choice.

We provide development financing for all purposes. It doesn't matter whether there is a building in place on the proposed site, whether the site is already purchased, or still needs to be bought; we offer the best possible development financing facility for everyone. We lend on a diverse range of projects including residential, commercial or semi-commercial, and houses or flats.

How our financing works

Borrowers do not get the whole amount of the project funds in a single lump sum rather they receive the funds in different stages in line with the successful completion of each of the projects deliverables. Lenders consider the following stages for the release of funds:

  1. Value of the land. This can be evaluated either on the amount the land will cost to purchase, or if you already own the land, it can be calculated on the market value of the land.
  2. Initial investment required including the footing and foundation of the project.
  3. Wall plate. The simple external structure of the project.
  4. Protection from the wind and weather. Fitting the doors and windows of the building to make it watertight.
  5. Initial plastering and electric works of the building. This constitutes the 1st fix.
  6. Finishing work on the building that includes the 2nd fix and includes the landscaping, decoration and painting.
Almost anything is possible. The lender will decide using the following data:
  • Initial cost of the project or site valuation.
  • Cost related to the construction of the building from start to the end.
  • Expected income or revenue from the project or the gross development value (GDV).

The lender will usually aim for a roughly equal split of the funds.

For example:

Land value at stage 1£1,000,000Maximum available release could be £6-700,000
Total cost from stage 2 to 6 (build cost)£1,000,000Maximum available release could be £6-700,000
GDV £1,000,000
Profit £1,000,000

Funds will be normally be released either:

  • In advance at the start of the work depending upon the amount of the loan required and the project value at that time.
OR
  • In arrears, once the work has been completed.

An independent surveyor will analyse the project progress and evaluate the value of each stage of the project. The maximum amount of funds that can be released ranges from 60% to 70% of the value of the project stage. Further funds may be released if extra security is made available. In addition to this the surveyor also checks that the project is completed to appropriate standards and in accordance with planning regulations. He will also verify that all legal permissions for the work have been gained.

Lenders, generally favour borrowers with previous experience of these types of projects, although, each loan application will be assessed on its individual merits.