Book a free consultation now!
Residential property schemes can be very profitable but can also be very risky, so it’s crucial that an…
Build to Rent (PRS)
Build to Rent (BtR) or Private Rented Sector (PRS) have recently become a hot topic as uncertainty…
Social / Affordable Housing
Projects relating to: Affordable Housing, Social Rent or Shared Ownership…
Care Homes / Nursery Homes
For the Operator or Investor, the following funding is possible: Senior…
We have seen a huge increase in interest in this ever-growing market, especially where Care facilities…
Funding is available in the following circumstances: New Build out of the ground, Refurbishment…
When it comes to Student Accommodation opportunities, one of the key considerations is timing…
Office / Commercial Repositioning
Residential property values have risen sharply over the past few…
Logistics / Warehousing
Due to the rise in Online Marketing & Sales Growth, this sector has become much higher profile…
What is Residential Development Lending?
The two most important things they will consider is:
1. How much experience the Developer (borrower) has.
They will need to show a CV that demonstrates experience similar to the project they wish to get the loan for. This can be both in the size of the project and the amount of the capital raise. It can often be the case that a developer (borrower) has experience but not under their own name (company) which can be a problem to a regular lender.
However, we look at cases differently. Typically, Contractors may wish to become developers to create larger profits rather than just ‘earn a wage’.
They will have experience but not as a ‘Developer under their own name’. We have Private Lenders that have gone through the same process and understand their journey which is why they will look at cases such as these with more positivity.
2. How much capital should a Developer submit into the project?
It helps if the land is already owned, so that this can form part of the collateral and the lenders then only need to consider the build-out element.
We talk to Developers that ‘use their own money’
The reasoning behind this strategy is that they don’t wish to pay for finance. The issue this can cause is:
1. They lose momentum and get caught in a ‘Stop and Start’ scenario.
2. They can only get on with another deal once the previous one is completed and sold.
We provide a seamless solution where the Developer can work on several projects simultaneously which will increase profit and get their business expanding far more quickly. And because the Developer is buying in costs at the same time there is likely to be more savings which will have a positive effect on their bottom line too.
Large Developers can also benefit from our Services because they are always seeking to take on as many projects as possible.
Some strategies include Planning Gain which gives them a far bigger profit once this is approved. The issue here is there is risk and they can spend a lot of money getting the project granted. We can assist by offering funding as long as the project fits with the appetite of our lenders.
Our Product Guide is approaching 60 products which are made up of Private Lenders: Institutions, Wealth and Sovereign Funds, Family offices & HNWIs, who look to provide financial support for Developments across the whole of the UK & Ireland, Western & Northern Europe**, that will give Developers a better chance of getting their deals approved.
** Limited Equity
3. Is Planning Permission granted?
Showing outline planning or letters from the council showing their stance can help but generally, we require evidence to support planning has been granted. Because no lender likes taking a punt on whether ‘it’s likely to happen’.
There are exceptions to this when a project is large enough for our Institutional investors to consider.
How do the loans generally work?
What is Residential Development and why may someone choose to do this over other types of development?
Why use a specialist Development Lending company?
The simple answer is that we are specialists that work with numerous products which will be far greater than any ‘mainstream lender’. Apart from Senior Debt, we bolt on Mezzanine and Private Lenders to create an all encompassing finance solution for both Large and Small developers alike.
We don’t just work with Small Developers/Starters. In fact, our ‘sweet spot’ is working with developers that have some experience that wish to grow. So for example, we help developers that may complete two schemes a year who would like to push to do say four or five a year. This is done by use of our Equity facilities that will allow them to work on schemes even at the same time thus giving them momentum and added profit far more quickly.