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You are here: Home / Bridging Loans / Development Finance / 100% Development finance

by Payam Azadi

100% Development finance

Development finance

The world of development finance is going through a little revolution with a number of lenders offering up 100% of development finance once a property has been purchased.

✔ Niche Funding are one of London’s top Commercial Finance Brokers.
✔ Why just use one bank when you can reach a whole host of lenders.
✔ No upfront fees. You only pay us when we deliver on our promises.
✔ We work for you and have your interests at heart – not the Lenders.
✔ Help with your application and documentation.

At Niche Funding we are currently receiving a flurry of enquiries from landlords who are buying up freehold properties to develop into apartments. It’s great to see the market is buoyant but with so many different providers it is essential applicants do their homework. 100% Development finance is also possible so read below on some of the criteria involved in this type of lending.

When it comes to starting off the project. It will all come down to the risk and rewards which will determine which lenders we can approach. The credentials and past experience of the developer has a major part to play in who we choose together with how much they’re willing to put down for the project themselves.

Another vital touch point is planning permission. In my opinion there is no point providing a Gross Development Value (GDV) figure for the completed project if you have not moved past first base and been granted planning permission as this will have lenders questioning your creditability.

At Niche Funding we ensure our clients the best possible financing solutions; whether it’s consist of an upfront bridging finance facility which can be converted into longer term development finance or a development finance product right from the start.

Larger Development finance solutions with planning

For larger loans typically over £500,000. We may be able to offer up to 75% of the purchase price together with hundred percent of the development costs. However, this is very much position at an experienced developer with planning permission and a comprehensive schedule of works.

Smaller Development finance Solutions with planning

If the development is smaller, then we can potentially look at alternative providers who will potentially fund between 50 to 65% of the initial purchase together with the facility of funding the full development costs. However, once again planning permission must be in place.

No planning permission granted as of yet – purchase solution

Typically this will be the trickiest type of project because it may mean we will have to do opt for a bridging finance solution and convert the deal into a development finance at a later date. Once planning permission has been granted. Fundamentally, this type of deal will always be based on the asset and the type of property / land in place. If it’s a home for example, which is going to be converted into flats, then lenders will typically look to lend between 60 to 70% of the initial purchase, then once planning permission has been granted we can flip the project onto a viable development finance solution possibly at hundred percent of cost.

For more information on getting 100% Development finance please contact Niche Funding on T: 020 7993 2044 or alternatively complete the enquiry form on this page.

commercial mortgage

Payam Azadi

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.

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AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Niche Advice Limited is a Credit Broker and does not lend money directly to clients. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA Number: 750263.

Commercial Buy-to-Let and commercial mortgages are not regulated by the Financial Conduct Authority.

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Niche Advice Limited has a commercial arrangement under an affiliate programme with Check My File and is remunerated for referrals.

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Correspondence Address: Niche, Unit F6, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG.

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234567.

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