Property development finance
Enhanced Wealth Ltd has a department specialising in small to medium size property developments, conversions and restorations. At present, the appetite for development funding is severely limited; however there is still money on the table for the right deal.
Who can borrow?
Individuals, Partnerships, Limited Companies, Trusts, LLPs and several less well known business vehicles.
Typically UK property development finance will be used for:
- Property refurbishment
- New build projects
- Property conversions
- Land purchase
As with other commercial loans, property development loans will be secured against the land or property you wish to develop.
How do the products work?
Experienced Developers
We would always seek a development loan through a main stream lender, wherever possible, due to the lower overall cost.
In order to qualify for this type of lending, you must have experience; employment of a project manager is discounted as experience. In addition, your background income stream should be stable and sufficient to fund your living. This would need to be proven by accounts or employed payslips.
Typically, loans are available over a twelve month period in order to fund the land/building acquisition and the development costs.
The loan is split onto two parts; up to 65% of the undeveloped “site” acquisition and 65% of the build costs, drawn down in stages.
The build costs can include, architects and other professional fee’s, your wages/drawings if you need them, a 20% contingency to cover cost/time overruns, and the interest payments on both loans rolled into the total facility.
The total potential loan should not exceed 60% of the developed value of the project. In effect, these loans take the form of a secured bridging facility, they are not “ term loans”, and are not assessed as such, unless your exit strategy is to retain the developed building, for say letting purposes. The lender will want to know your exit strategy at outset.
Inexperienced Developers
Funding is available; however expect the overall cost to be considerably higher.
Typically 60-65% LTV at 1.5% per month.
Call us for details of this type of funding
Where do we fit in? What can we do for you? How do we make a difference?
Having spent many years dealing with the main sources of development finance, we will know which lender has the propensity to lend, and the person within that organisation that has the inclination to say “yes”, on the terms that you need.
Our job is to communicate the deal to the lender; in a way that makes them feel comfortable with the risk proposed. The, the old maxim “it is not what you say, but how you say it”, applies critically here.
Two proposals for the same purpose, with the same basic fundamentals, may well have differing outcomes, based solely on the way that they are communicated to the decision maker.
An incoherent proposal is never a good start.
To discuss your property development finance requirement please call us on 0800 316 5756
Please note that the Financial Services Authority do not regulate commercial loans or commercial mortgages
