Property developers make up a large proportion of our client bank. Over the years we have supported them through the recession by helping them restructure their current facilities, and then grow by helping them secure new development lending.
Land finance facilities can range from longer term loans of up to ten years, or shorter term facilities of up to two years for the acquisition and delivery of planning consent. We have recently secured finance for a range of sites, including:
- 8 acres of strategic land funded at 100% loan to purchase price on a two year interest only facility for an experienced land promoter. To be developed for commercial use in the next ten to fifteen years.
- 110 acres of land refinanced to raise capital to fund the acquisition of neighbouring land as part of a wider assembly process.
- 15 acres of agricultural land funded as part of the restructuring of a family estate. It was funded using a private bank on a five year interest only term loan.
- 5 acres of land with detailed planning consent for detached housing. The funding was secured at 70% loan to value on a two year interest only overdraft at a rate of 4.75%.
As part of the process land may require finance for remediation, infrastructure or site clearance. These can be funded in a range of ways such as a straight loan, third party investors or a construction partner. Being able to assess the most suitable finance from a range of options ensures you can maximise profit, reduce time to complete the work and reduce the cost which boosts the profitability of the site.
There has been an increase in the number of lenders looking to lend to land projects as they are squeezed out of the property investment and development spaces. This results in an overall increase in lending options and liquidity, improved pricing and a loosening of credit policy.