Echo Finance

What is property development finance?

New build? Conversion? Renovation? Part-build? Property development finance is funding for either major new building projects or comprehensive renovations. We can source finance for residential, commercial and mixed-use developments. We've spent the last 25 years’ helping experienced and new property developers find the finance they need to start and finish their projects.

How much can you borrow?

The loan amount is based on a percentage of the gross development value (GDV) at the end of the work, currently up to a maximum of 60% loan to GDV, with a maximum of 75% of the total costs. Typically we work with developers looking for funding from as little as £250k through to projects needing finance in excess of £25m. There really isn't an upper limit but if you want to borrow a smaller amount, a refurbishment loan is likely to be more suitable.

Loans are normally structured to ensure that the developer’s contribution is utilised up front with the lender providing the majority, if not all of the build costs. It is usual for funds to be drawn down in stages against architect’s or quantity surveyor’s certificates.

For example:

A developer has planning permission to build three houses with the gross development value estimated at £4.5 million. The total costs involved are £3.1 million, made up of £1.25 million for purchasing the land and £1.85 million in build costs. A lender might agree to development finance of £2.32m (limited to 75% of costs) structured as £320,000 initial advance followed by the balance in stages throughout the build.

Loan to project costs will be influenced by projected gross property development values but funding is available up to 75% of the purchase price and build costs.

It is often 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.

Where the property developer is able to improve the planning consent post acquisition, we can often negotiate increased levels of funding which recognise higher land and gross development values.

 

Want to know exactly how much you can borrow?

The amount you can borrow will be based on the strength of your proposal. The quickest way to find out how much you will be able to borrow is to speak to one of our expert development finance brokers.

How long can you borrow for?

A property development loan is usually arranged on an interest only basis and the term of the loan would typically be 6 to 18 months depending on the size and nature of the underlying project. Usually the interest can be rolled up into the loan, so there are no monthly payments.

We negotiate finance requirements with a full panel of property development lenders and other financial institutions to provide the right 'match' to the project.

When should you apply for finance?

Development funding without full planning consent is extremely difficult to secure, unless you are highly experienced and have completed a number of development projects. Before seeking finance it is essential to finalise planning consents and have all relevant documentation available to show your lender.

What sort of rate can you expect to pay?

There are no set rates for property development finance. That’s where we come in. We have access to the whole market and work with a panel of specialist property development lenders and other institutions to find the right match and negotiate the best rate for each proposition.

The lenders assess each application individually and price according to the strength of the development proposition and the borrower. We have years of experience in this field. We know what information should be included within an application and how best to present it for submission.

That’s not to say we can’t give you an idea of what you might expect to pay. Usually the interest can be rolled up into the loan, so there are no monthly payments.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
Echo Finance

Registered in England and Wales No. 6939070. Registered office - The 1812 Building, Wheatley Park, Mirfield, West Yorkshire, WF14 8HE. Echo Finance Limited is authorised and regulated by the Financial Conduct Authority. Echo Finance Limited is entered on the FCA register (www.fca.org.uk) under reference 570073. The Guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. The Financial Conduct Authority does not regulate Will Writing, Estate Planning and some forms of Mortgages. © Copyright Echo Finance Limited. Where you have a complaint or dispute with us and we are unable to resolve this to your satisfaction then we are obliged to offer you the Financial Ombudsman Service to help resolve this. Please see the following link for further details: www.financial-ombudsman.org.uk.

Echo Finance Limited

The 1812 Building, Wheatley Park, Mirfield, West Yorkshire, WF14 8HE

Local Rate: 01484213337
Freephone: 08000934914
© 2019 All Rights Reserved by Echo Finance Limited.