Bridging finance for development is used to build a new building or convert an existing building. This can be residential houses, shops, offices or industrial buildings. It can be for investment purposes or owner occupied. You can be an experienced developer / builder or a first time developer:
- A builder by profession who has purchased land and wants a loan to build houses that he will build and sell on. The developer may or may not have built from scratch before
- An experienced developer who has been doing this for years and we will source them the best possible rate
- Someone building their own home
The maximum you can borrow to purchase the site is anywhere between 50-60% of the purchase price depending on the project. The site would need to have planning in place or can be agreed subject to planning. One can also borrow up to a 100% of the build cost provided that it is within 60% – 70% of Gross Development value (GDV) depending on the lender and experience (set on a case by case basis). Maximum term you can borrow for development finance is between 12- 24 months. Exit is usually sale of properties or refinancing.
Key Features of our Development Loans
- Loans from £10,000 upwards
- No tie-ins you can repay the loan without incurring any early repayment charges
- no exit fees with certain lenders
- no experience is required provided a building contractors contract has been provided
- funds are available in stage payments
- can use other properties as collateral
- you are not liable to borrow the full agreed amount should you build go below budget/plan and will only pay interest on the amount borrowed
With property development finance the valuations tend to be pricier than the other valuations and takes up to 10 days after visit to reach the lender.
Development loan rates will vary depending on the project and experience.
Whole Of Market Development Finance
You may have just been granted 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 at some point in order to get to the stage where everything is finally completed.
Whether you are:
- An experienced developer
- Looking to develop your first property
- Buying at auction to refurbish and flip for a profit
- Building a property portfolio
- Part way through a development and in need of funds to complete
- Converting an office block to residential under PDR
- Developing student pods
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 land purchase price and 100% with additional security
- Funding from £50,000 with no upper limit
- We are whole of market so can get the best deal for your development
- No upfront application fee
- Shortlisted as Best Development Broker in the UK
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 new build residential projects, mixed use buildings, strictly commercial developments through to the purchase of existing land or buildings which 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 are able to 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 are able to 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, your chosen project manager through to the actual builders themselves who you will ideally be employed under a fixed price contract in order to provide peace of mind for both you and the person who is lending the funds.
With this in mind it is absolutely vital that you find a property development finance broker that 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 UK Property Finance to deliver the best rates for bridging finance and development finance.
As fully accredited members of the National Association of Commercial Finance Brokers and the Association of Bridging Professionals, we are always willing to go the extra mile to ensure that the needs of the borrower and lender are met with 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
UK Property 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 60% 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 advisors should you wish to enquire further.
Frequently Asked Questions
We have funders who will fund these types of sites allowing you time to obtain planning permissions/change of use for further development.
Lenders will not be prepared to lend as much against the value of the land – we would look to obtain a loan equivalent to 50% of the value of the land. If there is an existing property on the site then this Loan to Value may increase.
Once Planning Permission is granted we can look to raise further funds against the increased value of the land and provide the funding you need for the build costs.
We will help you to put your plans together to ensure that when we speak to the lenders we will have a plan which works and which they can support.
Many lenders are happy to support first time developers and we can speak to these lenders on your behalf. To overcome your lack of residential property development experience the lender will want to ensure you have a good team around you who can give you the advice you need and may require a Fixed Price Contract from a reputable builder to ensure you have no unexpected cost over-runs. We will help you through this process and can recommend suitable professionals if needed.
We have secured finance packages
for these types of permissions and have many lenders happy to look at these transactions.
Lending against residential property development schemes is more about the scheme and the experience of the development team – rather than the credit standing of the individuals involved. That said, however, in some circumstances the reasons for the poor credit will put lenders off and so funding will not be available. Please talk to us and we will do our best to help you.
If you apply for funding through a Limited Company then the lender will require Personal Guarantees from the Directors but otherwise all will be the same as borrowing in your personal name(s).