100% Development Finance from Aberdeen Industrial Finance

As well as providing Buy to Let and Commercial mortgages, we also specialise in providing property development finance for both residential and commercial property developments across the spectrum. From multi million pound commercial property developments, to residential developments costing tens of thousands of pounds.

Rates
Property development finance rates differ dependent on the applicant’s experience, the industry sector and the nature of the proposal but a good benchmark to consider would be Bank Base Rate + 1.0% to 4.5%.

Property development finance is usually arranged on an interest only basis and the term of the loan can be one year plus depending on the size and nature of the underlying project.

Level of Funding
Loan to project costs will be influenced by projected gross property development values but funding would typically be in the region of 65% to 70% of the Gross Development Value.

It is also possible to organise a loan to finance up to 100% of the property development costs where the borrower already owns the land on an unencumbered basis.

Where the property developer is able to improve the planning consent post acquisition, we are able to negotiate increased levels of funding, which recognise higher land and gross development values.

It is worth keeping in mind that a High St bank will only operate on a 70% loan to cost basis. Therefore you would have to find the remaining 30% from other sources.

Example of 100% Development Funding
The following requirements must be met to obtain 100% development finance:

Full detailed planning permission (not outline)
Experience in field i.e. established contractor with own insurances
House insurance to be provided for 10yrs after construction

The following example is based on a land purchase price of £500,000 with 10 houses being built. The houses will be valued at £220,000 each after construction.

Gross Development Value = 10 * 220,000 = 2,200,000
Gross Development Value = £2.2m
Available Borrowing = £2.2m * 65% = £1.43m
1.43m – 0.5m (land purchase price) = £930,000 for development
Cost of construction for one 4-bedroomed house = £80,000
Cost of construction for ten 4-bedroomed houses = £800,000
£930,000 - £800,000 = £130,000 for fees and other costs
Profit = £2.2m - £1.43m = £770,000

Funding Options
Aberdeen Industrial Finance Ltd negotiates finance requirements with a full panel of property development lenders and other financial institutions to provide the right 'match' to the project.

We offer a full range of development finance options at every stage of the development process.

Equity
Mezzanine
Senior (bank) debt

Typically, the maximum senior debt finance achievable will be equal to 75% of total costs. However it is important to consider our ability to re-gear finance against planning gain/enhanced value at the project end, therefore vastly increasing finance potential. In short, we can finance on the increased value of the property post development.

For experienced property developers with a strong track record 100% of build out costs can be obtained.

We have access to providers of mezzanine finance and equity participations that can reduce the amount of development capital that is required to inject into individual property development schemes. Whilst terms will often differ significantly from senior debt finance, this does provide a developer with an opportunity to enhance returns from individual development projects.

Expertise
Where appropriate, long-term property finance can be arranged to provide an 'exit' from initial, short-term development finance. Aberdeen Industrial Finance Ltd are also specialists in both Buy-to-Let and Commercial mortgage markets.

Our skills base is spread across both residential and commercial property development finance. For commercial development schemes we can arrange finance with pre-lets, on pre-sales, or development for owner occupation.

Crucially, we provide full assistance with initial residential and commercial property development appraisals, to ensure projects are viable to development lenders.

Typically, commercial and residential property development mortgages arranged by us for clients are from £150,000 to £25m.

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	As well as providing Buy to Let and Commercial mortgages, we also specialise in providing property development finance for both residential and commercial property developments across the spectrum. From multi million pound commercial property developments, to residential developments costing tens of thousands of pounds. Rates Property development finance rates differ dependent on the applicant’s experience, the industry sector and the nature of the proposal but a good benchmark to consider would be Bank Base Rate + 1.0% to 4.5%. Property development finance is usually arranged on an interest only basis and the term of the loan can be one year plus depending on the size and nature of the underlying project. Level of Funding Loan to project costs will be influenced by projected gross property development values but funding would typically be in the region of 65% to 70% of the Gross Development Value. It is also possible to organise a loan to finance up to 100% of the property development costs where the borrower already owns the land on an unencumbered basis. Where the property developer is able to improve the planning consent post acquisition, we are able to negotiate increased levels of funding, which recognise higher land and gross development values. It is worth keeping in mind that a High St bank will only operate on a 70% loan to cost basis. Therefore you would have to find the remaining 30% from other sources. Example of 100% Development Funding The following requirements must be met to obtain 100% development finance: Full detailed planning permission (not outline) Experience in field i.e. established contractor with own insurances House insurance to be provided for 10yrs after construction The following example is based on a land purchase price of £500,000 with 10 houses being built. The houses will be valued at £220,000 each after construction. Gross Development Value = 10 * 220,000 = 2,200,000 Gross Development Value = £2.2m Available Borrowing = £2.2m * 65% = £1.43m 1.43m – 0.5m (land purchase price) = £930,000 for development Cost of construction for one 4-bedroomed house = £80,000 Cost of construction for ten 4-bedroomed houses = £800,000 £930,000 - £800,000 = £130,000 for fees and other costs Profit = £2.2m - £1.43m = £770,000 Funding Options Aberdeen Industrial Finance Ltd negotiates finance requirements with a full panel of property development lenders and other financial institutions to provide the right 'match' to the project. We offer a full range of development finance options at every stage of the development process. Equity Mezzanine Senior (bank) debt Typically, the maximum senior debt finance achievable will be equal to 75% of total costs. However it is important to consider our ability to re-gear finance against planning gain/enhanced value at the project end, therefore vastly increasing finance potential. In short, we can finance on the increased value of the property post development. For experienced property developers with a strong track record 100% of build out costs can be obtained. We have access to providers of mezzanine finance and equity participations that can reduce the amount of development capital that is required to inject into individual property development schemes. Whilst terms will often differ significantly from senior debt finance, this does provide a developer with an opportunity to enhance returns from individual development projects. Expertise Where appropriate, long-term property finance can be arranged to provide an 'exit' from initial, short-term development finance. Aberdeen Industrial Finance Ltd are also specialists in both Buy-to-Let and Commercial mortgage markets. Our skills base is spread across both residential and commercial property development finance. For commercial development schemes we can arrange finance with pre-lets, on pre-sales, or development for owner occupation. Crucially, we provide full assistance with initial residential and commercial property development appraisals, to ensure projects are viable to development lenders. Typically, commercial and residential property development mortgages arranged by us for clients are from £150,000 to £25m.
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