Development Finance Refinance for a Part-Complete High-Value Property

Positive Commercial Finance specialises in arranging Development Finance Refinance for developers whose projects need a new funding solution before completion. This case study explains how we refinanced a part-complete £5 million residential development after the original lender reached the end of its funding appetite.

The Challenge

Our client was building a high-value single residential property with an expected Gross Development Value (GDV) of £5 million.

Although construction had progressed well, unexpected ground conditions created additional engineering work beneath the site.

As a result, both the construction programme and budget increased.

The development loan was approaching the end of its term, yet the property still required significant investment to reach practical completion.

To make matters more difficult, the existing lender decided not to release any further funds.

The developer therefore needed a replacement lender that could refinance the project and provide funding through to completion.

Finding the Right Funding Partner

Refinancing a part-complete development is rarely straightforward.

High-value single residential projects attract a smaller pool of lenders, making it even more important to approach those with the right experience.

Positive Commercial Finance identified two suitable funding options from our specialist lending panel.

Both lenders understood the quality of the project and were willing to consider the refinance despite the construction delays.

Our Solution

The developer selected the lender offering the most practical solution rather than simply the lowest price.

Importantly, the lender agreed to retain the existing Quantity Surveyor (QS) and accept an updated valuation from the original valuer.

This avoided the need to appoint new professionals who might have taken a more cautious view of the project’s value or remaining costs.

Following a detailed review of the existing reports and project documentation, the lender completed the refinance within four weeks, allowing construction to continue without further disruption.

Deal Structure

• Day 1 Loan to Value (LTV): 65%
• Loan to Gross Development Value (LTGDV): 70%
• Interest Rate: 0.75% per month (rolled up)
• Arrangement Fee: 2%
• Term: 12 months

The Result

The developer successfully refinanced the existing development loan before it expired and secured the funding needed to complete construction.

With the refinance completed quickly, the project remained on schedule and avoided further costly delays.

The developer expected to complete the remaining works within two months, leaving around 10 months to market and sell the finished property.

This case study demonstrates how Development Finance Refinance can provide a practical solution for developers facing funding challenges on part-complete schemes, particularly when working with lenders that take a commercial approach to complex projects.