27-06-2019

One of the most important points of securing development finance is knowing how you will repay the loan and your development exit finance strategy. We have experience in securing all percentages up to and including 80% development exit finance, so keep reading to learn more.

development exit funding
There are 2 main options to repay development finance: Sale of the units Refinance on to long term buy to let finance

Selling your development

Selling your development is an obvious strategy but it doesn’t come without complications. External factors can affect sales; a weak housing market may mean having to accept offers under asking price or it may mean sales are slow.

Buy to let re-finance

This is a good option as it allows the developer to retain the properties in their property portfolio. The disadvantages though are that you will only be able to release 75%, maybe 80% of the profits due to loan to value restrictions.

The 3rd option for developers is to use a product called development exit finance. The product allows a developer to refinance on to often cheaper finance and provides an extension to the sales period. The advantages being that you will pay a lower rate of interest and any pressure of having to sell the units quickly is relieved.

What is development exit finance?

Development exit finance is a short-term loan used to repay often more expensive property development finance.

What is the maximum loan to value for development exit finance?

Development exit finance is available up to 80% of the gross development value. 

What is the maximum term for development exit finance?

The maximum term is usually set at 12 months.

Development exit funding criteria

  • The development must have reached practical completion
  • All contractors should be fully paid up
  • All planning conditions discharged
  • Building reg’s signed off and warranties in place
  • Properties should be actively marketed
  • A red book valuation will be required for the completed development site

If you are looking for a development finance broker, Bristol based Fox Davidson has an expert team with knowledge gathered from all around the country. Don’t struggle in silence – give us a call to discuss your development exit funding options and we can help.

To ensure you have the perfect development exit strategy including the best chances of receiving 80% development exit finance, contact Fox Davidson on enquiry@foxdavidson.co.uk or call 01179 897950.