Land / Ground Up Developments

New Build Developments

The first question a finance provider will ask with regards to development finance is ‘are you building from the ground up or converting an existing property?’

Ground up developments are deemed the riskier option and generally only supported by finance providers who have experience in this area. Many bridging type lenders won’t support ground up developments only light/heavy refurbishments.

In some instances, developers decide to demolish the existing property and re-build from scratch to best accommodate the need. As the security (existing property) will be demolished, the finance provider will use the land value (post demolition) as part of the development appraisal.

Strategy

Our clientele are very much focussed on new build schemes that are geared towards affordable homes in prime areas (unit GDV
< £500k).

INCLUDES

New build houses
New build flats
Residential use
Commercial use
Mixed use

Case Study

The developer’s equity was tied up in an existing scheme however a new opportunity arose which the developer didn’t want to miss. With limited equity available to input, the use of a mezzanine facility enabled the developer to take on the new scheme but also obtain a higher return on his capital deployed.

Details

Loan Amount
£4.25m

Loan
Senior & Mezzanine

Asset Class
Residential

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