Property Development Finance
Finding the right funding solution for new build projects, redevelopments, major renovation works, or just general refurbishments on residential, commercial and mixed use developments is not always easy.
Property development finance is not usually used for the smaller scale residential developments you typically see on television, where a property is refurbished and sold on for a profit. Typically, a bridging loan or specialist refurbishment finance is a more appropriate for this kind of use. Development finance is usually reserved for larger scale projects such as a self build properties or large scale modifications to a commercial development.
How much does development finance cost?
That’s where the assistance of specialist development finance brokers can really pay off. You should approach a development finance advisor who has access to the whole of the market i.e. not one that works for a specific lender. They will be able to use their knowledge of the market to find the right match, and negotiate the best rate given each borrower’s requirements.
The development loan application will then be assessed individually and priced according to the circumstances of the deal and the borrower. However, to give you some idea of price, currently there are deals on offer with 0.6 to 1.5 percent monthly interest charges.
What length is the repayment period?
Development finance for self build properties or extensive refurbishments is usually arranged on an interest only basis. The term of the loan will usually be for between 6 months and 18 months, depending on the scale of the project. The interest repayments can also be rolled up into the overall cost of the loan so there aren’t any monthly repayments to make.
How much can you borrow?
Every lender has their own lending limits, but generally speaking development funding is usually from £200,000 up to £25m+. The lending amount will usually be based on the gross development value once the project has been completed. Once the loan is agreed, it is commonly the case that the loan is drawn down in stages as the project develops.
How can we help?
At Mortgage Advisor.co.uk, we work with a leading network of development finance brokers who know precisely where to turn to find the best deal. Please complete our online enquiry form with a few details about your development and an advisor will be in touch to offer a free, no-obligation initial consultation.
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