We have a broad panel of diverse lenders with whom we have excellent relationships with. As such, we know who to approach for obtaining the most favourable terms which meet our client’s circumstances and requirements.
Recently there has been a number of specialist lenders expand their products to include Development Finance, which means that there is greater competitiveness within this market. This has lead to greater complexity within this field, resulting in the need for an experienced broker like Connect, who have access to the whole of the market, to secure the best deal for a client. The properties do not have to be residential, as we can provide development finance for commercial properties, whether it be from a plot of land or developing an existing property.
Whilst experience of the client is key for a number of lenders, we can also package an application on a Joint Venture basis where this is required.
Typically lenders will lend up to 75% of the Gross Development Costs, providing 100% of the build costs. It is important to compare all the costs associated with the finance, as lenders will charge an arrangement and exit fee. That exit fee maybe on the finance provided or the Gross Development Value. Typical rates are 7% pa, however for the experienced developer this can be considerably lower.
A Limited Company was looking for a facility of £1.3m to buy a plot of land and develop residential property.
Whilst one lender offered a 7% rate it had a 1% of GDV as the exit, whereas an alternative lender offered a 9% rate with a 1% of the facility amount.
The Gross Development Value (GDV) was £2,500,000.
As this case study demonstrates, we look at a variety of options available and work with the client to get the best deal for their circumstances.
Confused where to go for Development Finance?
Please give us a brief summary of what it is you would like to do and we will come back to you quickly to let you know how we can help. If you want to talk to us immediately, please call 01708 676 111.