Development Loan to Refinance New Build House

Development Loan to Refinance New Build House

Area
Daventry
Capital Raised
£1.6m

Development exit finance is a crucial component in the property development toolkit, offering a solution for developers to transition from higher-cost development loans to a more economical option once the bulk of the project is complete an risk is reduced.

This case study demonstrates how it works, and showcases how our brokers negotiate finance options despite complications and tight deadlines.

The Scenario

Our clients found themselves in need of development exit finance as their original senior debt was nearing expiry.

The property in question was a unique new build: a 5-bedroom detached executive dwelling developed in a barn conversion style, located in Daventry, and valued at £2,125,000.

With the property recently put on the market, their exit strategy was clear: the sale of the asset. However, the unique nature of the property (a high-value single dwelling in a fairly rural location which could be slow to sell) coupled with a significant time pressure, presented a unique challenge.

They had a tight window of just 5 weeks to raise the exit loan and repay their existing finance on time.

They were also coming off the back of a recent down valuation that would reduce their loan to value (LTV) to 75% for their application – which is generally the maximum limit for this type of development finance.

And a further complication was the absence of any background assets for Personal Guarantees (PGs). A PG is a commitment made by an individual, typically a director or shareholder of a company, to personally repay the bridging loan if the business cannot (in this case, the development company).

They’ll typically put down their own personal assets as security in addition to the property owned by the limited company.

The Solution

We approached two lenders offering specialist development exit products, and put forward a comprehensive application to quash any uncertainties around the lack of PGs, high LTV and fairly illiquid asset.

From initiation to completion, the entire process was wrapped up in the crucial 5-week timeframe, showcasing our ability to deliver under pressure when it matters.

James Ellacott

Commercial Finance Broker

Cardiff

0203 880 8890

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Simon Mullins

Finance Broker CeMAP

Cardiff

0117 959 5094

Are you looking for a similar type of property finance?

As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you. Book a free telephone consultation with me at a time to suit you.

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Paige Dumpleton

Finance Broker CeMAP

Cardiff

0117 959 5094

Are you looking for a similar type of property finance?

As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you. Book a free telephone consultation with me at a time to suit you.

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Jonathan Moffatt

Head of Business Finance

Cardiff

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Alex Morris

Private Client Adviser

Bristol

0117 332 5061

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Scott Dutfield

Finance Broker

Cardiff

0117 959 5094

Are you looking for a similar type of property finance?

As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you. Book a free telephone consultation with me at a time to suit you

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Carly Cheeseman

Head of International

Bristol

0117 457 9922

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Nick Kerley

Finance Broker

Cardiff

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Louis Levine

Finance Executive CeMAP

Bristol

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Bridging Team

Clifton Private Finance

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Sam Baker

Finance Broker

Cardiff

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As a specialist bridging adviser at Clifton Private Finance, I can take a holistic view of your situation and find the right finance solution for you. Book a free telephone consultation with me at a time to suit you.

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Fergus Allen

Senior Finance Broker

Cardiff

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Jacob Phipps

Finance Broker

Bristol

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I specialize in helping international clients source residential and investment property finance for UK property. Book a free telephone consultation with me at a time to suit you.

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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. customDatabaseField-8455

Mathew Phillips

Senior Finance Broker

Bristol

0117 959 5094

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Alex Chambers

Senior Private Client Adviser

Bristol

0117 403 4324

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Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

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I have extensive experience finding residential and investment property finance for UK and international clients. Book a free telephone consultation with me at a time to suit you.

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Bridging Finance Team

Clifton Private Finance

Bristol

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