Location: Welwyn Garden City, Hertfordshire
Loan Amount: £735,000, GDV: £1.8 million
Finance Category: Development Finance
An existing developer client referred a friend and fellow developer to Fox Davidson.
Our client was a Hertfordshire-based property developer whose usual lender had stopped lending due to COVID, and they needed funding for a joint venture with a landowner.
The development had planning permission for 8 flats in 2 blocks of 4 and included the change of use on part of the existing building from office to residential.
The main challenge was that the developer was doing a joint venture with the landowner and there were some complexities in the ownership plus there were 5 individuals all of whom had equal shareholding, so lots of due diligence to be carried out upfront.
The development itself was straightforward and the site had good access and the units were priced to the first-time buyer market and were expected to sell well.
As the loan was below £1 million, many of the sub-£1m lenders will not lend and those that do can charge rates of 8% plus, we wanted to keep the rate as low as possible as the lender was coming from a high street bank who had charged nearer 5.5.% but had stopped lending due to the COVID pandemic.
Due to our expertise and experience in the lending industry, sometimes when a deal lands on our desk, we instantly know who the perfect lender will be, because of the loan amount, location, and type of client.
The perfect lender is not simply down to criteria, but also due to their personnel, fitting like-minded people together is just as important.
As our client was a builder, we needed a lender who knew the area and who would be able to relate to our client.
Fox Davidson secured a development finance loan at a rate of 6.5% and the scheme has just received its first construction drawdown following the QS visit.
The pictures at the top of this case study are of the site in progress, and we can’t wait to see how it’ll turn out.
Fox Davidson are a specialist property development finance broker in London. We secure development finance for London & the home counties for developers typically borrowing upwards of £1m with funding lines available to £200 Million.
For more information on development finance in London or elsewhere in the UK, please email firstname.lastname@example.org or call us on 0117 989 7950.