Market Update - Spring 2013Unfortunately, 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 |
Thursday, 25 April 2013
Property Development Finance - Market Update
Monday, 12 December 2011
Autumn Statement - Small Developers To Get Government Help
CD Property Finance will provide further details on this scheme when they become available. This is what is known so far.The Chancellor announced that where there are existing building sites that have stalled, a £400m Get Britain Building funding pot will enable small house builders to restart construction, helping to deliver up to 16,000 new homes on sites that already have planning permission, but have been shut down because of economic conditions.
The measure will be supported through the New Homes Bonus, which will ensure that those areas which are growing have the resources to meet the needs of their new residents and existing communities.It is intended that cash will be released by next July to get sites started.
If you would like to discuss this further then please contact Chris at CD Property Finance.
The measure will be supported through the New Homes Bonus, which will ensure that those areas which are growing have the resources to meet the needs of their new residents and existing communities.It is intended that cash will be released by next July to get sites started.
If you would like to discuss this further then please contact Chris at CD Property Finance.
Wednesday, 15 June 2011
MARKET UPDATE
As we approach the middle of the year it is worth reflecting on whether the funding market has improved or whether it has stayed static like the general economy.
With base rate still at 0.50% and LIBOR at around 0.82% the borrowing costs for development projects remain relatively low. Depending on the Loan to Value (
Admittedly, these rates apply to the lucky few that have considerable cash to input for a development deal. More typically CD Property Finance is arranging development funding at around 7% p.a for loans geared as high as 80% of cost. The lenders continue to charge significant fees, however, to boost their earnings on each deal.
For residential property investment loans the finest rate we are seeing for up to 55%
New lenders have continued to emerge. Since the New Year two new authorised banks have been launched, both doing property lending as a major part of their business. Since January, CD Property Finance has had meetings with half a dozen new private funds who have money to lend either on a first or second charge basis for development projects.
To summarise, with the emergence of new lenders we would expect to find a lender for your project, provided the location is suitable and you can demonstrate the necessary expertise.
LENDER UPDATE
For short term borrowings we have a new lender that will provide finance for;
Bridging
Light Refurbishment
Heavy Refurbishment
The terms are amongst the most competitive in the market and can be summarised as:
2% arrangement fee, including broker fee
Interest rates from 0.75% per month for bridging loans and 0.90% per month for refurbishment loans
There is no exit fee and legal and valuation fees are low.
This product would suit:
Investors buying at auction and needing to carry out a basic refurbishment or conversion to the property
Developers acquiring larger properties which need major works. For more information please contact us.
Wednesday, 4 May 2011
Property Development Finance Update - May 2011
Earlier this year we advised you that the availability of property development finance had improved a little because of the entry into the market of some new lenders. This remains the case and in the section below we have shown some examples of deals that we have funded recently.
Portfolio investors have also benefited from the arrival of two new banks who can now provide loans for residential and mixed residential/commercial properties with good rental yields, up to 75% Loan to Value. This is a major improvement on a few months ago and can help those investors that wish to gear their portfolios so that they can take advantage of new opportunities.
CASE STUDIES:
Development Loan - £220,000 - single new build house in Hertfordshire.
Development Loan - £675,000 - single new build
Bridging Loan - £350,000 - auction purchase
Portfolio Investment Loan - £300,000 -
OTHER SERVICES
In addition to helping you with your property insurance requirements we shall shortly be able to introduce you to competitive terms for life cover and other protection products. Don't forget also to claim your capital allowances through us if you own commercial property.
For more information please contact us via chris@cdpropertyfinance.com
Tuesday, 5 April 2011
New Capital Allowance Claims Service from CD Property Finance
I would like to introduce a new professional service from CD Property Finance.
If you qualify, it could be worth tens or even hundreds of thousands of pounds to you or your company.
Unclaimed Capital Allowances
If you own certain types of property, you are entitled to claim substantial capital allowances to reduce your tax bill or, in many cases, receive a large tax refund - this would be an excellent boost to your cash flow. The only requirement is that the owner of the property should pay tax in the
The types of property in question are:
1 - Commercial units in the
2 -
HMRC does not publicise these allowances. Indeed, they will only accept submissions in a pre-approved format which comply with certain very strict rules. We work rigidly within those rules and our Principal Consultant alone has achieved almost 1,000 successful claims - with no failures!
How big is the opportunity?
It is estimated that less than 4% of valid claims have been submitted to date.
Find out free of charge
With the help of Portal Tax Claims Services you can find out free of charge whether you are entitled to any further capital allowances. There is a 96% chance you have a valid further claim. We operate a 'No Report, No Fee' service, so it will cost you nothing to find out.
Compliance
I am an agent of Portal Tax Claims who are part of the Portal Group, which includes FSA-licensed and regulated advisers. Because of its professional activities, compliance is of paramount importance meaning every claim we make for clients is comprehensively documented.
To find out how easily you could claim significant additional capital allowances, please phone me on 01428 684452 or email me at chris@cdpropertyfinance.com
Best wishes
Chris Dowdeswell
Wednesday, 23 March 2011
Property Development & Investment Funding Spring Market Report - March 2011
Nearly three months on from the start of the year and the banks have agreed to implement Project Merlin, the initiative to lend more to small businesses. It is hard to see how this will help beleaguered property developers, however. The major banks still have enormous numbers of problem property loans and it looks like another couple of years before they will show any appetite to lend to the smaller developer, most of whom require much higher gearing (Lending to Cost/GDV) than is on offer from the major banks. There are some new lenders that are making an impact and these are discussed below.
Investors are in a better situation. Portfolio finance is available from a number of good lenders provided there is strong interest cover. Typically up to 65%
New Lenders - Up to £500,000
Small developers carrying out schemes where the borrowing requirement is under £500,000 have suffered from a lack of interest from banks in recent years. This is slowly being addressed and CD Property Finance is helping developers with projects for new build houses, barn conversions and renovation projects.
Housing schemes preferred but flats considered
Arrangements fees from 2%, including CD Property Finance fee
Interest rates from 7% per annum
Exit fees likely to apply
New Lenders - Over £500,000
For schemes with a borrowing requirement of up to about £5m CD Property Finance can source finance from its usual lenders but also from new funders. The terms below will vary considerably depending on the developers' experience, the nature of the project and particularly the gearing.
Housing schemes preferred, but flats considered
Arrangement fees from 2%, including CD Property Finance fee
Interest rates from 4% over base rate
Exit fees likely to apply
Property Insurance
Don't forget to contact us if your renewal is due or if you have a new investment or development that needs to be insured. We can help even if the finance is not arranged through us!
If you would like more information please call or email us chris@cdpropertyfinance.com
Best wishes
Chris Dowdeswell
01428 684452
Wednesday, 15 December 2010
Property Development Finanace UK Market Report - December 2010
As the end of 2010 approaches it is worth reflecting on the changes we have seen in the funding market this year. The answer is probably "very little"!
The high street banks have hardly any appetite for property lending, especially development finance for new borrowers. At CD Property Finance we continue to see cases where RBS/NatWest have terminated funding on schemes where all logic dictates that they should continue lending to maximise their chances of being repaid. Unfortunately, they are displaying little commonsense and this has resulted in many developers losing all the funds they put into the scheme. Meanwhile, the development is part built and blighted for the foreseeable future.
On a brighter note, we are working with a dozen or so active development lenders plus numerous bridging funders and a handful of good mezzanine funders. This gives a reasonable choice for developers, but it is still hard to satisfy lenders' strict criteria. The smaller lenders have been particularly supportive over the past 12 months. We even managed to secure funding for a small developer in a seaside town to create two flats on top of an existing apartment block, the funder providing a 50%
Blended Senior Debt and Mezzanine Funding
Working with a single bank this is an attractive option for the experienced developer. The bank provides up to 55%
Finally …
In our blogs we try to provide practical advice to our clients. For instance, earlier this year we advised developers to think very carefully which law firm to instruct on their site purchases and funding of the scheme.
In recent months we have noticed that some developers are making direct contact with a number of lenders and instructing more than one broker in regard to their funding requirements for a particular deal. This is understandable in many ways especially with the internet at everyone's disposal. The developer naturally wants to feel he is getting the best deal.
However the market for development finance is small and there are relatively few experienced brokers and willing lenders. This means that it is more often than not counter productive to put the scheme to more than one source at a time since lenders take a dim view if they see the same deal from a number of different sources. They term it as "touting" or "punting" and invariably the fact that a number of parties are looking at the deal raises the suspicion that the proposal is a "difficult" one. From our experience when this happens that deal tends to go to the bottom of the pile, and stay there.
If you would like more information please call or email us chris@cdpropertyfinance.com
Best wishes
01428 684452
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