Key Facts:
- Jersey development site acquisition
- Purchase price - £3,500,000
- Loan amount - £3,500,000
- Term – 15 months
- Interest – 10.50% per annum
- Servicing – Interest retained
In this case, we were approached by a client who was looking to finance the acquisition of a dilapidated property with a view to securing planning consent for its development into a luxury private residence.
The client had negotiated to purchase the property for £3,500,000, subject to receiving planning consent for development works. Once consent was granted, the client was obligated to complete the purchase in a matter of weeks.
Having worked with the client on a previous project, we were trusted again to source the best deal available. With the loan amount equalling the purchase price, we had to immediately discount all the mainstream lenders. It was important to find a lender that was sophisticated enough to understand that, whilst we were looking to raise 100% of purchase price, there was great value stored in the planning consent that had been granted. We were helped by the fact that the client had previous experience in luxury property development.
There are only a handful of lenders willing to consider such transactions, and after speaking to our lending partners in the acquisition and development space, we sourced a lender who was willing to put up the £3,500,000 on a retained interest basis, meaning that no loan interest payments are required over the term.
This case goes to show that, no matter the ask, there is a solution out there for almost every circumstance.
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