Building Development Loans
Our Development Finance Service Provides:
- Development finance from £100,000
- Finance for: New build, conversion, minor & major refurbishment
- Residential developments of all types
- Up to 65% GDV finance available
- Up to 100% development cost finance available
- 100% joint venture finance available for experienced developers
Call our property development finance team on 0117 313 6058
What is a building development loan?
Building development loans, also known as property development loans, are a type of bridging loan used to facilitate a wide range of building projects. This type of development finance is commonly used for both large and small scale developments, including those which are commercial in nature and private building projects.
Building development finance will normally come with a loan term of 12-18 months. Most lenders will not specify a minimum loan term, however, so loans can generally be taken for a shorter period where appropriate to help keep costs down.
Development finance tends to be paid in instalments as a project progresses, with each instalment being transferred to the borrower as certain pre-agreed conditions are met e.g. when the build becomes wind and water tight.
Because building development loans are intended as short term finance, borrower will usually need an exit strategy in place when applying for the loan. This means having a clear plan in place to repay the loan, normally by refinancing or selling on the finished development.
How to get building development finance
To apply for a building development loan, you will normally be required to supply:
- Details of your income, expenditures, assets and liabilities
- Bank statements
- A valuation of the project on behalf of the lender
- Detailed cost breakdown
- Timeline for the development
- All relevant planning permission documents
- Building regulations consent
- Your National House Building Council (NHBC) insurance details or an equivalent
- Your plan for repaying the loan
The cost of building development finance
The most obvious cost associated with any loan is the monthly repayments, but with development finance you are also likely to have to pay an arrangement fee and an exit fee. These can significantly impact the affordability of your loan, so should not be overlooked in your calculations.
Arrangement fees – Charged when the loan is first received, these will be a percentage of the total loan amount.
Monthly repayments – For development finance, the monthly repayments are normally interest-only as the capital is repaid when the loan ends.
Exit fees – Also usually based on a percentage of the total loan amount and payable when the loan is repaid. Not all lenders charge exit fees and they can make a considerable difference to the overall cost of a loan. A lender who charges an exit fee may cost you more than one who doesn’t, even if their interest rates are more attractive.
Compare building development loans
To get the best rates and fees on your building development loan, you need to look at lenders from right across the market. That way you can see which loan provider is offering the most attractive deals that match your borrowing needs and personal circumstances.
Our highly experience development loan brokers can make life much easier and help you access the money you need faster. They do the hard work of identifying the best deals for you and have access to many lenders not available direct to the public, giving you more choice.
To find out more, call Fair Mortgages today on 0117 313 6058 or use our contact form for a quick response.