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Do you need property development finance?
We have seen a real increase lately in the number of clients enquiring about property development finance, so this week we thought we would give it a turn in the spotlight.
What is it?
So, before I get into the nitty-gritty let's go back to basics. Property development finance is short-term funding specifically for the purpose of developing property either from the ground up or where an existing building requires substantial change.
Would you qualify?
Experience is essential, but there are options! Whilst rates vary from lender to lender there is one common factor - in order to qualify for finance, the borrower must have demonstrable experience in property development, or be able to contract out to the professionals.
How much could you borrow?
There is not much appetite for lending below £250k but there is NO maximum. Lenders will look for some form of contribution from the borrower by way of cash and/or security. Realistically, loans average about 70% of costs, although some lenders will go to 90%. There are of course options for those of you looking to borrow under £250k though, so do get in touch for more details.
What fees can you expect to pay?
Lenders typically charge two fees - an arrangement fee and an exit fee. Arrangement fees with most lenders costs around 1-2% of the loan amount and can often be added to the loan. Exit fees are more interesting. Some lenders charge typically 1-2% of the loan amount but others - and here's the sting - will charge a percentage based on the end value of the site.
We will always pay all introducers a 1% success fee on completion.
Remember I can also help with most other types of property finance, so do get in touch to discuss options for your next project.
01446 506 508
