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Development Finance

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What is development finance?

Development finance is a term used to describe property development finance. It can cover the development of either residential or commercial properties. The short-term loan involved usually helps the management of land costs, as well as the cost of the development itself. It’s based on gross development value – i.e. what will the site be worth when the refurbishment or construction project is finished. The loan is paid back in stages, ideal for those building their own home and for businesses involved in huge residential developments. 

What do I need to apply? 

In order to apply and qualify for development finance, you will require a team of professionals to cover the various aspects of the build from beginning to end, these will include builders, architects, and project managers depending on the scale of the project. The other key element is the development appraisal, this details the costs of the project from both a build and finance perspective.

How much can I be funded?

The lender will work out a payment structure to suit your project. This will be dependent on whether you own the land already or require funding for the land as well as the build costs. In either circumstance, the lender will typically fund around 70% of the GDV. Funds are usually released in pre-agreed trances, and a surveyor will review the project to make sure it is on schedule before releasing each of those payments. The lender will also build in a margin so at every stage they are not at 100% LTV.   

Self-Build Finance

If you’re planning a self-build, whether a first-timer or an old hand at this game, you’ll probably need funding in place to drive your home-building project through its various stages, and the chances are that at least some of that funding will come from a mortgage. 

When it comes to a home-building project there are so many more issues to be taken into consideration.

For example, buying and paying for your land, cashflow, build costs, construction type, planning permission, affordability and where you’ll live during the build can all impact on your finance. 

Mortgages for self-build differs from residential mortgages as, with a self-build mortgage, the money is released in stages as the build progresses, rather than as a single amount and interest is only paid on the amount drawn down.

All lenders have different self-build criteria, so it’s important to speak to an expert who can look at your project individually and find the right finance, both for your project and your personal circumstances.  

Is this type of finance regulated?

Development finance is not a regulated service e.g. the development of a buy to let, investment property, development site, or commercial or retail units; however, where the applicant is choosing a self-build for a residential property they will be living in, this will be considered regulated. 

How can Arne Grey help?

First of all, we accept all manner of projects, and we can help build-out the finance element of the project costs, to get you approved with lenders. What’s more,  it doesn’t matter if you’re a non-experienced or experienced developer. We can offer valuable assistance on both ground-up developments and heavy refurbishments. And please remember - we can assist with self-builders i.e. those looking to build a home for themselves to live in.

Secondly - We work in most areas of the current market, including retail, office buildings and other private and commercial sectors. We make ourselves available to help and guide you from the outset of the project.

Give us a call today and we can discuss the options available to you.  

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Details submitted through this form are confidential. We will process any personal information collected in this form in accordance with our Privacy notice. The information therein is used only to contact you to discuss the areas you've expressed an interest in. Please note the contents of this form is sent via email and therefore may not be secure.