Development exit finance before practical completion on 4 Suffolk houses

Area
Suffolk
Capital Raised
£924K

The Scenario

Our client had a terrific development of 4 detached houses underway, in a cul de sac in an attractive Suffolk village.

Two were finished to practical completion. He needed an additional £45K to finish off the other two houses: second fix, interiors and landscaping.

On a GDV of £1.4M for the four properties, this was a tiny amount of lending to be hunting around for. The issue was that he’d already spent his agreed contingency fund on cost overruns beyond his control. 

Many lenders would be willing to extend the lending they’d already made available for this kind of sum. But the development finance our client had in place was from a peer-to-peer lender, who can be less flexible than a private lender investing their own funds. Going back to their pool of investors for further funding on a project has the potential to spook those who’ve already put their money in.

The Solution

Some lenders will shave an additional percentage off their own valuation if properties aren’t yet at practical completion.

We took the proposal to a lender we knew could be more flexible. We were able to persuade them that their initial valuation of £1.25M on the properties as they currently stood was unduly conservative.

We were looking for an eight-month lending term: this was an experienced developer and he was confident he could meet the sales deadline. 

It's rare for lenders to consider a term of less than nine months to sell four houses: it requires a high degree of confidence in both the client and the broker.

But we produced valuations from three local estate agents showing that the proposed asking prices for the properties were very achievable. We also submitted four AIPs for BTL mortgages on each of the properties, should they fail to sell in time. (Many brokers don’t want to think about fallback refinance options.)

In the event, it’s clear that our assessments accurate: the first property to market was under offer within a week, at its GDV valuation.

We’re now working on refinancing the client’s other development projects.

Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need.

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

Contact Us