Six months later, and after the submission of a revised planning application, he successfully gained detailed planning consent to build four executive homes in a fantastic location with golf course views to the rear.
With planning granted, we were then able to put in place a development facility which fully redeemed the gross bridging debt, and provided 100% of build costs plus professional fees.
The uplift in the value of the land with the benefit of the planning consent was more than sufficient equity to satisfy a range of development finance lenders.
The site was not without challenges – being on a steep slope – so a significant amount of piling and ground works were required to prepare the site for the new build.
However, a suitably experienced team and contractor were assembled to take the scheme forward.
Now, some 14 months into the build programme, we are weeks away from practical completion.
Given these units are aimed at the executive market, it was anticipated that they would take time to sell, and so we are moving our client on to the next stage of the funding process with a developer exit product.
This will allow the developer to release equity tied up in the scheme so he can make progress with the acquisition of his next site, and will also give an extended sales period so the developer can sell the units for a price he is happy to accept.
Against a gross development value of £3.5m, a developer exit product at 70% LTV (net) has been agreed for nine months, at an interest rate of 0.7% per month, with a 2% arrangement fee and no exit penalties.
Interest is rolled-up, so there is no pressure on the developer to service interest payments.
We are immensely proud to have been involved every step of the way with this development – from inception to completion – and have taken pleasure in seeing the process through and helping our client to create four magnificent homes in a stunning location.