New Build Residential Development Loans
Do you need to have Finance in place for a new build residential development?
WHAT WE OFFER
There’s no doubt about it – Small Building Firms and Private Property Developers are the key to relieving the UK’s current housing shortage.
They’re the ones who can quickly and efficiently get homes built and they’re the ones who have the passion and drive to make it happen by bringing forward smaller sites for development with faster build out of new supply that can be quickly absorbed into the local market.
The trouble is that small builders often have difficulty getting their developments financed. This is where we can help. We’re experienced in structuring development finance and bridge lending and will offer the potential of small builders a greater priority through 2024 and beyond with the right advice, support, and reliable ACCESS TO FUNDING.
If you’re a small building firm or private property developer currently looking to finance a new build residential development, Contact Us to review your options, best rates and terms, to get your project funded quickly, cost-effectively, hassle-free, and above all easy to understand.
Key Features:
We arrange new-build residential development finance through all the stages of a project’s life cycle from site purchase, through the planning process, the construction phase, and finally we can support the sales or rental period exit strategy:
- For the site finance we can do up to 70% of the purchase cost.
- For the development finance we can do up to 100% of build costs.
- Up to a combined maximum of 75% of the GDV.
- Sales period finance – also known as “Finish and Exit Loans”: We can arrange short term loans to finish outstanding work and release equity for current projects that are nearing completion; we can help a developer to release capital to begin another project pending full sale of the current project without having to wait.
Each project can present its own challenges, and developers’ needs can vary widely. The challenge of raising finance can be a complicated process and must be tackled in a timely manner at each stage of the project. For this reason, there is no “off-the shelf one size fits all” product and development loans are frequently cut to fit the project exactly. Most of what we do will be bespoke. Our objective is to help customers understand the many options that are available to allow better access to funding beyond what is available from the high street banks.
Basic Development Finance Model:
The maximum loan available is calculated as a percentage of a project’s end value, or Gross Development Value (GDV).
Lenders use specific formulae to determine what they will lend, taking account of the total cost of completing the project.
The basic parameters are: up to 70% of Site Cost plus up to 100% of Build Cost, total not exceeding 75% of the GDV.
Interest Charges:
Development Loans are individually priced based on Bank Base Rate plus lender’s margin averaging circa 4%, it would be prudent however for developers to factor in a benchmark rate of interest slightly higher than this when preparing a new build development finance appraisal. Interest will be charged against stage payments that are drawn down and rolled up to completion to be repaid from proceeds of sale or refinancing. There will be no loan servicing payments required during construction.
Get in touch today!
We can offer 100% DEVELOPMENT LOAN FACILITIES for proposals that show a good profit can be achieved if the financing package can be structured without cash deposit input from the developer.
For this scenario we can put into place a “BUILD PARTNER PROGRAMME” providing full 100% funding for developments (site purchase cost and construction cost) to a maximum of £20m gross development cost, for most types of new build development projects with full planning.
Contact us for more information on the “Build Partner Programme” and how it might get your next development done with true 100% funding for ALL costs up to £20 million GDC.
DEVELOPMENT BRIDGING LOANS are now widely used to finance small – medium size residential and commercial new build developments where total project cost is below £1m, and mainstream lenders are not interested to support Sub-£1m funding requirements because of relatively low profit margins.
Bridging is THE short-term borrowing solution for a variety of needs where fast access to funds is essential. This is particularly relevant in the current climate of funding scarcity where the banks and big mainstream lenders are often reluctant to support small housing developments. This is the challenge for many SME building firms that we want to offer help.
We can provide fast approval for bridging finance to quickly secure a development site, with or without planning consent to be able convert to a full development loan when ready to open the site and move the project forward.
We can also arrange Land Purchase Loans for between 50% and 60% of purchase price for land with development potential but without planning permission. Where developers are buying land which has been granted planning approval, after it has been secured under Option, we can arrange up to 100% funding for the purchase cost using the uplift in the land value.
We can also obtain 100% funding for development costs in cases where a developer’s financial contribution to the project is the market value of the land they already own.
Help with the cost of Planning Applications
Planning applications will involve a major financial outlay. We can help with the cost by offering experienced property developers fast access to short term funding that is designed to support feasible projects to acquire bare development sites or commercial property that has potential for residential-led redevelopment to contribute to a broader transformation of underutilised sites in city centres throughout the UK. Contact us today for more information.
Funding for Housing Developments outside the UK
With the support of a specialist development lending partner, we are now able to provide Bridging and Development credit finance solutions for new build Housing Development Projects ranging from £25m to £150m primarily in the Republic of Ireland but also with phased expansion into the housing markets of Spain, Netherlands, and Germany during 2025/2026.
We would like to hear from Developers and Investors who need capital for top-tier housing projects in these markets.