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Development Finance
Development Finance is basically funding to build either commercial or residential property or to carry out large-scale renovations to existing property.
Developments vary from multi-million pound commercial property developments to residential property developments costing tens of thousands of pounds. Rates and terms may vary depending on the client's experience, industry sector and the nature of the project.
Projects are usually arranged on an interest only basis and the term of the loan can be one year or more depending on the size and nature of the underlying project. Loan to project costs will be influenced by projected gross property development values but funding would typically be in the region of 70% to 80% of the purchase price and build costs.
It is also possible to organise a loan to finance up to 100% of the property development costs where the borrower already owns the land on an unencumbered basis. The bottom line with development finance is the more of your own money/assets you commit to the development, the stronger your negotiating position.
Whatever your project or proposal, MFC are here to help you through the development maze. If you would like to know more just drop us an email outlining your requirements and our Finance Executive will find the best package for you.
Residential Development Finance
Most often used with the procurement of residential building land and the development of residential units for sale.
MFC brokers finance for the purchase of the land, construction costs, infrastructure, services and ancillary professional costs.
Our lenders provide also finance for all forms of residential development from those that require conversion and/or refurbishment through to a serious building project or some major additions/building works to an existing property.
Finance is also available to purchase land where planning permission for residential does not exist, funding the development once planning is in place or seeing the loan repaid from a sale of the site.
Commercial Development Finance
Used with the development of commercial properties that are pre-let and where the lease terms and tenants quality is/are acceptable.
MFC brokers finance for office, retail, industrial, leisure or mixed use developments. These investments should ideally be attractive to institutional purchasers.
Repayment of the loan provided would come from a sale of the property or refinance within an agreed period post completion of the development.
Investment Property Finance
For acquisition or retention of office, retail, industrial, leisure or residential investment properties. Investment property loans are extended from periods as short as six months to five years.
MFC broker investment property proposals where there is an opportunity to add value above and beyond the initial purchase price by a combination of one or more of the following:
- intensive management - improving the rental income stream by letting voids, reconfiguring accommodation and letting, progressing rent reviews, renegotiating leases, etc.
- by procurement of an alternative planning permission, effectively utilising the running rental stream to buy time/service interest whilst the planning process is followed.
- by breaking up the constituent parts of the investment into elements to be traded and retained.
MFC also consider broker investment property opportunities, and would consider proposals involving:
- Industrial estates.
- Retail shopping centres.
- High yield investment properties.
100% Development Funding
Funding would typically be in the region of 65% to 80% of the Gross Property Development Values. The following minimumrequirements would need to be met to obtain 100% Development Finance:
- Full detailed planning permission (not outline)
- Experience in field i.e. established contractor with own insurances
- House insurance to be provided for 10yrs after construction
Financial Markets With recent turmoil in the markets many banks are now nervous about lending long-term finance and most have reduced their lending percentages. All is not lost, we have lenders that will lend up to 80% of the completed property value and up to 100% with additional security. |
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About Mearns Financial Mearns Financial provide brokerage for Commercial Mortgages, short-term |
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