Development Finance for Two New-Build Houses in the South East

Positive Commercial Finance specialises in arranging New Build Development Finance for developers looking to unlock the full value of a site. In this case study, we helped an experienced developer secure funding for two new-build houses while allowing time to obtain enhanced planning permission after the purchase completed.

The Opportunity

Our client was an experienced developer with a strong track record of delivering small residential developments of up to five houses.

They identified an off-market plot of garden land with planning permission already in place for two detached houses.

However, the existing consent did not fully maximise the site’s potential.

The developer believed larger, redesigned homes would significantly increase the value of the scheme and wanted to submit a fresh planning application after acquiring the land.

The Challenge

To secure the site, the client needed to exchange contracts unconditionally.

At the same time, they wanted the flexibility to revise the planning permission without disrupting the development finance facility.

This meant finding a lender that could assess both:

• The scheme with the existing planning permission.
• The proposed development under the revised planning application.

The figures demonstrated the opportunity.

The original planning consent produced an estimated Gross Development Value (GDV) of £800,000, while the redesigned scheme increased the projected GDV to approximately £950,000.

The finance therefore needed to support the acquisition while giving the developer time to create additional value.

Our Solution

Positive Commercial Finance introduced the developer to a specialist lender that understood the commercial strategy behind the transaction.

Rather than limiting the facility to the existing planning permission, the lender structured the finance with sufficient flexibility to accommodate the revised application.

This gave the developer the confidence to proceed with the purchase while working towards a higher-value scheme.

The revised planning permission was successfully obtained just one month after completion, allowing the project to move forward as intended.

Deal Structure

• Loan to Cost (LTC): 80%
• Loan to Gross Development Value (LTGDV): 65%
• Interest Rate: 0.8% per month
• Arrangement Fee: 2%
• Exit Fee: 1%
• Term: 12 months

The Result

The developer acquired the site without missing the opportunity to improve the planning consent.

By working with a lender that understood the wider development strategy, they secured funding that matched both the immediate purchase and their longer-term objectives.

This case study demonstrates how New Build Development Finance can provide the flexibility developers need when enhancing planning permission to maximise the value of a site.