Development Finance

This type of finance is available for commercial and residential property to new and experienced investors from a large selection of Commercial Lenders and Hedge Funds. Finance can be arranged for up to 100% of the development costs.

100% Development Finance Criteria – UK Only -Updated June 2009

• No more than 70% of the GDV including interest roll up
• Experienced developers only
• Single large dwellings above £1million will be considered on a deal by deal basis.
• Arrangement fees are charged on all deals starting at 1.50%
• Maximum lend is currently limited to £1.25million (excluding interest rolled up), with no more than 5 dwellings per site.
• Minimum loan of £250,000
• No Apartment/Flats schemes
• Sites must have full planning
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Property Development Finance incorporates:

• Finance for a Residential & Commercial Refurbishment
• Finance for New Build Flats & Houses
• Finance for Industrial Development

Our Typical Lenders Criteria:

• Loan Size £100,000 – £50 million
• Term Up to 24 months
• LTV 70% of total costs including Land / Site valuation, infrastructure, build costs and marketing costs.
• Funds released in stage and when needed, normally released after architect or surveyor certification of work completed. 100% arranged subject to additional security or mezzanine finance.
• As a guide, projects should show a minimum of 25% profit on costs
• Variable or Fixed rate options available
• Variable rates linked to the Bank of England Base rate or LIBOR

Typically a property development loan is arranged on an interest only basis and the term of the loan is between 6 – 18 months, though longer and shorter terms are possible. The term normally depends on whether the loan is for refurbishment or for a new build property. Two loans are normally involved in development finance, although they are not always required together. One loan is for the land or property and the other is to fund the costof the renovation / build costs.

The rate / margin offered by the lender will vary significantly depending on the case presented to them and whether the applicant is an experienced or new property investor / developer. All applications are assessed on a case to case basis. Rates can be based on a margin above the Bank of England Base rate or LIBOR rate, or the lender may provide the option of a fixed rate. Rates for development loans are typically 1% – 3% above the Bank of England Base rate.

We don’t stop at the UK
The lenders on our panel can offer property development finance across Europe and as far away as Russia. They have recently agreed and offered to lend on residential and commercial developments in Russia, Romania, Turkey and Germany. Capital can also be raised for developments in; Austria, Azores, Balearic Islands, Belgium, Bulgaria, Corsica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Madeira, Malta, Monaco, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, South America, Carribbean, Asia.

We can also offer offshore development finance arranged in Euros or other currencies for experienced property developers.

We are also able toto arrange finance without planning permissionwhere an application for change of use has been submitted.

For further information call one of our specialist finance brokers on 0203 236 1003.