Residential Development Finance – Latest Funding Prices

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Having returned to the UK after working overseas, it is clear that the property development finance market is quickly evolving.  The widespread under supply of housing is supported by huge demand from occupiers and investors alike. 

The various sub-sectors are all equally active, with student housing and private rented sector both at the forefront.  As such the lending market is evolving by the day, with more and more liquidity coming into the market.  Loan to costs are increasing, while pricing is compressing.

We have seen an increase in the number of lenders active in this sector.  Retail banks are providing rates as low as 2.50%, and stretched senior lenders can provide attractive loan to cost facilities at 90%. 

This week we have received several telephone calls from newly active lenders looking to deploy capital into the UK residential development finance market.  Most of these lenders are backed by private equity funds or family offices seeking income yield.

Lender type                    Loan to cost                Lenders fee             Rate pa              Exit fee
Family office                    100%                            2.00%                       7.00%                 0% of profit
High LTC 1                       90%                             1.00%                        10.00%                1.00% of debt
High LTC 3                      85%                              1.50%                        6.50%                 1.00% of GDV
Lean pricing 1                  65%                              1.00%                        3.00%                 0.00%
Lean pricing 2                 50%                             0.50%                        2.50%                 0.00%

2016 is likely to be an active year for lending in the UK, with 2015 having seen the highest levels of property finance since 2006.  We would anticipate that there will be an inevitable increase in the lenders risk appetite, and a reduction in the net cost of finance as lenders compete for transactions.

If you have any requirements we can directly quote for, then please do not hesitate to get in touch with me by email or phone below.

Sean Crombie

Sean@ConduitFinance.com
DDI: 0131 564 0274
M: 07595 520 577

Brokers Love Conduit

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In January 2016 we successfully completed a land bridge within a three week window for one of our valued introducers.

The facility was for £4,000,000, secured by a residential development site in England.  Our client was a house builder who was about to lose the site, along with the £2.5m profit that went with it.

Conduit’s Andy Lawson worked around-the-clock with the introducer to quickly pull together the due diligence pack and secure heads of terms that the borrower was keen to progress with.

The broker said, "Despite the complexity of the deal and very tight completion deadline, Conduit worked tirelessly to complete the facility for a very satisfied client."  Conduit Finance Managing Director Jamie Davidson commented, “This is the type of deal we enjoy delivering for our introducers.  We never circumvent introducers and welcome the opportunity to work with more of our partners in the future.“

Did we mention the broker received £32,000 for the introduction and was paid same day?

If you or your clients have a time pressured situation, then we are here to start early, finish late and work weekends to make it happen with our many sources of lending.

Jamie Davidson | Loans over £10m and restructuring | Jamie@ConduitFinance.com

Andy Lawson | Loans over £1m | Andy.Lawson@ConduitFinance.com

Edward Page | Loans under £1m | Edward@ConduitFinance.com 

Sean Crombie | Business Development | Sean@ConduitFinance.com

Mark Reidy | Business Development | Mark@ConduitFinance.com

Price Update - 2nd September 2015 - Expat Buy to Let, Commercial Investment and Development Finance

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Please find below the latest product prices from Conduit Finance.  Of particular note is the Expat Buy to Let Mortgage, we recently completed a deal using this lender and assisted a client who was struggling to find a lender in the UK.

Expat Buy to Let Mortgages

Available to overseas clients with no current credit in the UK for the purchase of Buy to Let and second homes.  We recently completed a deal using this lender. The borrower was a solicitor based overseas who was struggling to secure lending despite having substantial net worth.   

  • Arrangement Fee 1%
  • Variable Rate of 4.50%
  • Interest only repayments
  • Loan term 20 years and an Loan to Value of 75% 

Contact Ed Page page for loans below £1m and Andy Lawson for loans above £1m.  

Call 0131 564 0172 or email Edward@ConduitFinance.com or Andy.Lawson@ConduitFinance.com 

 

3.0% Interest Rate for Residential Development Finance 

Prime pricing available for well located sites at a moderate loan to cost 

  • Heads of terms in 3 days 
  • Lenders fee from 0.5% to 1.0% 
  • Interest rate from 3.0% to 3.5% 
  • Loan to cost up to 65% 
  • Exit fee 0% 
  • No personal guarantees 
  • Completion in 6 to 12 weeks 
  • All we need to determine if this pricing can be achieved is a cashflow appraisal. 

Please contact Jamie Davidson for loans of £5m or more, Andy Lawson for loans between £1m and £5m and Edward Page for loans below £1m.   Contact Jamie@ConduitFinance.com, Andy.Lawson@ConduitFinance.com or Edward@ConduitFinance.com or call 0131 564 0172.                   

 

Commercial Investment Facility

New to market lender offering gearing up to 70% and pricing from 2.60% over cost of funds

  • UK Wide
  • Office, Retail, Industrial and Leisure
  • £2m - £15m
  • Loan to Value up to 70%
  • 5-20-year term
  • Long-term amortisation profile
  • 1% Arrangement Fee
  • No personal guarantees

Call Andy Lawson on 0131 564 0172 or email Andy.Lawson@ConduitFinance.com