What is property development finance?
Property development finance can cover a range of things, but generally will be used for new buildings, purchasing land or refurbishing existing properties.
Most property development finance loans will be secured against the land or property that is being developed. This is standard practice.
Do I qualify for property development finance?
The lender will look for a developer with proven experience, this means that if you have no experience, it may be wise to partner or join forces with someone who has property development experience, to reduce the risk, as well as the cost of the financing.
What are the rates?
Rates for property development finance are rarely standardised in the same way as your home mortgage. Here at NGI we have worked with our panel of lenders to negotiate the best rate for each individual proposal.
What is the lending criteria?
- Maximum funding ratios: 70% of land purchase price, 60% of construction costs. 100% of build costs if you already own the land.
- Experienced developer
- Building surveyor to opine on costings (and monitor if necessary)
- Confirmation of planning permission or building regulation status
- Independent valuation report required
- 2% arrangement fee, no exit fee
- Competitive interest rates.
- Staged draw downs against construction process if needed
- No early repayment fee
- Clear exit route
- 1st legal charge will be registered over property
NGI Finance provides finance for all aspects of your business. Construction companies may be interested in talking to us about our unsecured business loan that can be used to provide funding for the more difficult to finance assets for example scaffolding equipment.
Helping with development where the banks couldn’t
An Area Director from a High Street Bank approached Maria at NGI Finance to help with his long standing client: he really wanted to underwrite this deal, however, as it was a residential development proposal, it did not fit with the bank lending criteria.
Maria arranged a £630,000 facility over a 15 month term with no early settlement penalties to build 4 terraced houses.