June's Property Finance Update

CASE STUDY – RESIDENTIAL INVESTMENT

A property investor and developer approached CD Property Finance for help with funding an unencumbered building consisting of three freehold flats.  The investor required funds for a further scheme but had not identified that acquisition at the time. Because of the uncertainty regarding the use of the funds and the fact that the flats were freehold there was limited interest from lenders but we were able to arrange a 57% LTV loan over 25 years at a 3.70% margin over base rate to enable the client to “hunt” for a new opportunity.

NEW JOINT VENTURE FINANCE

CD Property Finance has sourced a 100% finance scheme for residential development. The scheme must show a minimum profit on cost of 25% with a borrowing requirement of no more than £5m.  This scheme is for experienced builders and developers and is available throughout mainland UK.  Minimum loan £500k. 

This is an unrivalled opportunity for developers to kick start schemes that formerly required substantial developer cash input.

STRETCHED SENIOR DEBT

Definition – “Development Finance from a single lender comprising Senior Debt and Mezzanine Finance, which can provide up to 90% of project costs”. 

This is a valuable financing solution for developers with limited capital resources and is available for developments with a GDV from £500,000 to £100 million.  Lenders require returns on such loans of between 14% and 20% p.a depending on the risk profile.

NEXT MONTH

“Focus On The Capital” – Development Finance in London.

If you would like to discuss your property development lending requirements then please email us or call Chris on 01428 684452

Chris Dowdeswell e: chris@cdpropertyfinance.com t: 01428 684452/ 07788 591873

Property Development Finance - Market Update

Market Update - Spring 2013 The government's Funding for Lending Scheme now has over 30 participant lenders  This means that property investors can be cautiously optimistic about lower priced funding as it is our recent experience that for high quality investment deals some of these lenders are willing to apply the interest margin discounts which the scheme intended. Unfortunately, residential developers are unlikely to be looked upon favourably as all lenders perceive extra risk in this type of lending. However, there is some good news for developers. In recent months CD Property Finance has located no fewer than six good lenders that will provide "stretched senior debt". Essentially this provides developers with bank type development finance plus mezzanine, or top up, finance from a single lender.  All six of these lenders are active in the market and want deals from residential developers in the range of £500,000 to £25,000,000.  With these lenders willing to consider loans of up to 65% of GDV - in some cases 70% -  CD Property Finance is confident that this is a positive move and will increase confidence in the sector in 2013. If you would like to discuss your property development lending requirements then please email us or call Chris on 01428 684452

Chris Dowdeswell e: chris@cdpropertyfinance.com t: 01428 684452/ 07788 591873