Key Facts:
- Client: British National & Resident
- Property Type: 5-bed house in London
- Purchase Price: £932,000 (GDV £1,500,000)
- LTV: 75%
- Refurbishment Loan: £215,000
- LTV: 100%
- Total Loan: £980,000
- Rate: 0.73% per month, fixed for 18 months
- Lender fee: 2%
Traditionally, bridging finance for property development lenders have been used to bridge funding gaps between property acquisitions, development and the finished article. Once completed, a project would simply be refinanced at an enhanced value, raising funds to pay off the bridging debt and allowing developers to bank a profit. Today, bridging loans for property development have evolved. Lenders have an enhanced role, often providing complex financing solutions in various scenarios.
In this case, our client was looking to purchase a property worth £932,000 and complete refurbishment works on the property which were estimated to cost £215,000, coming up to a total loan value of £980,000. The GDV (gross development value) for the completed development scheme was forecasted to reach £1,500,000.
Even though the specialist UK development finance market is fast-moving and ever-changing, there are still basic elements which are important to lenders. Some of the more traditional elements which lenders will review include development experience, GDV, collateral and the quality of third-party contractors. Here at Enness, we have vast experience in specialist finance which means flexibility on the structure and very few hurdles which cannot be overcome.
To meet the client's requirements, we approached a specialist bridging lender who was able to create a bespoke package with a 75% LTV (loan-to-value) mortgage for the property, as well as a 100% LTV refurbishment loan. The refurbishment loan was funded in 5 payments based on the progression of the work, which was both efficient and cost-effective.
Property development finance is increasingly flexible, and you will want a finance package that is structured from start to finish. Enness’ expert team of property development brokers will help you understand your options and access the best investment vehicles and deal structures. Get in touch to hear more about how Enness can help you with your bridging loan for property development, or learn more about what kind of finance the team would be able to source for you.
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