Property Finance For Inexperienced Developer

The Scenario:

The client was looking to purchase a piece of farmland in Oxfordshire with the view to renovate the farm house building into a high end luxury home.  Upon purchasing the farmland, the client realised the potential of the plot and decided that he wanted to build three additional houses.  The client believed that the value of the development would double if he was able to execute his new plan.

Although the client had a number of high value properties in London, the lender who provided the £1million would not allow the money to be used for the purpose of development, as the client had no previous development experience.  Without adequate property development finance the client was in danger of losing out on an attractive investment opportunity.

The client required £1.7million to repay his existing lender and complete intended development. After four months of searching using an existing finance broker, the client was not able to source the additional funding required. The client approached Clifton Private Finance for assistance.

Our Solution

The majority of lenders are reluctant to lend to an inexperienced developer. However, due to our strong links with private banks and specialist lenders, we were able to secure the £1.7million and finalise favourable terms of finance to suit the client within five days. 

Knowing that property development can be unpredictable with many unforeseeable costs, we sourced an additional £500K through a mezzanine loan. This acted as a ‘safety net’, in the event that the client incurred any unforeseeable costs that he had not budgeted for.

The £1.7 million and the £500K mezzanine loan enabled our client to complete his development without any unnecessary delays.  The development is expected to sell for £5million which will provide this first time developer a healthy profit.

Do you need development finance? Are you in a similar position ? To investigate your finance options call our team on 0117 959 5094 or fill in our call back form.