Specialist Mortgage Advice

03. Development and Bridging Finance

Development and Bridging Finance for Commercial Properties

For Commercial Properties, Development Finance & Bridging Finance is available for various purposes including:

 

  • Short term solutions for experienced developers looking to finance their developments

  • Finance for property refurbishment which is then replaced once the property is in a better condition with a long-term solution on more competitive rates

  • Short term solutions which convert to a longer-term mortgage once the development is completed

  • Hybrid solutions are also available where bridging can be obtained to purchase and refurbish a property and then be refinanced for the longer term with the same lender once the property is in a satisfactory condition.

There are numerous specialist lenders each with their own development preferences and appetite for lending. This is where a specialist mortgage adviser can help you navigate the various providers to find a proposition that is a good fit for your set of circumstances. Please call on 0333 300 1874 to see how we can help or alternatively request a call-back here.

Bridging and Development Finance for Residential Properties

For residential properties solutions also exist for individuals looking for bespoke finance arrangements.

 

We can provide bespoke advice if you are looking for Bridging Finance, which can be helpful in a wide range of circumstances. You could be looking to:

  • Buy a property at auction, improve it's condition and then seek longer term finance on preferential terms

  • Be moving house, but need to purchase a specific property but cannot wait until your existing property is sold, for instance if you are in a chain.

If you are looking to build your dream property, Staged Payment Mortgages have become more mainstream and can cover a wide range of types of development including:

 

  • Building a property on a plot of land you may already own

  • Buying a plot of land and building a new property

  • Buying an existing property with a view to demolishing it and building something new

  • Acquiring a non-residential property and converting it for residential purposes

Specialist lending market

This is a complex market and therefore getting specialist advice is essential.

Specialist lenders each have their own appetite for different aspects of this market and as such have different lending criteria. In addition to the usual mortgage lending criteria your personal circumstances and your ability to afford the loan, there are several additional factors that may be looked at such as:

 

  • The likely value of your property once construction has been completed

  • The proportion of the build cost being paid by the yourself

  • Other assets that you may be able to offer as security while the build is taking place

  • The location of your property

  • The property itself in terms of design and construction methods including the materials used

  • All planning permissions are obtained before any construction commences

  • Your level of experience including whether you are looking to build the property yourself or else project manage the build. If not yourself then lenders may wish to know who will be building the property and overseeing the construction as a project manager to ensure everything stays on track

  • As a condition of residential mortgage offers the lenders will also require that their risk against your new home is protected by a building warranty from the National House Building Council (NHBC) or similar

  • You may also be required to have insurance to cover accident, loss through theft and bad weather.

There are other important considerations as they will determine which lenders you can approach and therefore how competitive the interest rates you can access will be. This is relevant as different lenders provide finance in different ways, for instance:

 

  • Some lenders will only offer finance at the Standard Variable Rate (SVR) while your property is in the construction phase of the development

  • Some lenders will place a cap on the amount they will release to around 80% of the cost of the parcel of land being acquired and then 60% to 90% of the construction costs

  • If you live near to the new property and have some equity in your existing home some lenders may be prepared to lend up to 90% of the value of the land secured on the land and then finance the construction against your existing home. Once your new home is completed, a new mortgage against the newly built property can be arranged.

 

Whichever lender you choose, all lenders’ underwriters will want to review the estimated construction costs. This demonstrates how important it is to fully map out the costs associated with purchasing the land, the construction costs and how much of the project you wish to fund yourself before you consider approaching lenders. 

This may sound confusing and rather daunting, but don't panic, we can help you and advise you throughout the process of obtaining finance.

Working for you

Whether you are looking into residential and commercial development or alternatively are interested in obtaining bridging finance you will benefit from specialist mortgage advice.

 

If you are looking to finance a development, please do get in touch contacting us on 0333 300 1874 or else request a call-back here.

We have direct access to many residential, commercial mortgage providers and will explore opportunities with numerous lenders who are likely to look favourably upon your individual circumstances. 

Please note, all loans are subject to a credit search and valuation. 

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

 

Ipothica Specialist Mortgage Advice

Here to help you

As a specialist mortgage adviser we are here to help you obtain development finance.

 

We can help with anything from a staged payment self build mortgage for your main residence to financing a major property development.

Whatever your need we can help. Either call 0333 300 1874 or else make contact by hitting the button below.