South London Ground up development

The Challenge: A “Perfect Storm” of Completion Risks 

An 8-unit ground-up scheme in South London was days from stalling under a quadruple threat: 

  1. Down-Valuation & QS Cost Hikes: A late-stage down-valuation and increased build costs created a funding gap the rigid Senior/Mezz structure could not absorb. 
  2. “Ransom Strip” Title Issue: An unregistered strip of land posed a legal obstacle, threatening lender security and site access. 
  3. Purchase Price Shortfall: A last-minute Day One cash gap risked losing the site. 
  4. Expiry Deadline: With the agreement expiring shortly after New Year, there was no time to restart valuation or legal processes. 

The Solution: Stretched Senior & Capital Stack Re-Engineering 

We restructured the entire Capital Stack, pivoting from a Senior/Mezz split to a Stretched Senior facility to deliver leverage, flexibility, and speed. 

  • Flexible Day One Funding: Negotiated reallocation of part of the construction contingency into Net Day One funding, covering the purchase shortfall without requiring additional equity. 
  • Absorbing Build Cost Inflation: Higher loan-to-cost parameters allowed the QS cost increases to be comfortably absorbed. 
  • Title Resolution: Worked with specialist legal counsel to structure indemnities around the ransom strip, satisfying lender security requirements without delay.  
  • 18%+ Interest Saving: Consolidating into a single senior layer removed mezzanine pricing and secondary legal costs, reducing annual interest exposure by over 18%.

The Result: 

We secured a £4,500,500 gross loan at 73.5% LTGDV against a £6,250,000 GDV,  
providing a 21-month runway despite valuation pressure, title defects, cost inflation, and tight deadlines. 
 Strategic Value: 

This transaction demonstrates:

  • Dynamic Capital Allocation: Using contingency flexibility to solve Day One liquidity issues. 
  • Technical Problem-Solving: Structuring around title defects and ransom strips that stall conventional lenders.
  • Streamlined Efficiency: Replacing complex Senior/Mezz structures with a cost-effective Stretched Senior solution. 

Not Just Funding a Deal:  
But rescuing a Scheme, Protecting Margin & Improving the Client’s Bottom Line by 18%. 

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