The UK’s housing crisis has been well-documented, as the demand for affordable housing continues to outweigh the existing supply and developers sense an opportunity to address the problem through the delivery of much-needed developments.
As such, we have seen a steady increase in the number of requests for short-term property finance, as Signature’s professional support is needed to ensure these projects are delivered to budget and on time – delays can be expensive.
An experienced Cardiff-based developer, with more than 15 years of development and investment expertise, recently discovered this when requesting an £80,000 bridging loan from Signature to complete a property renovation.
Valued at £750,000 with a GDV of £1,000,000, the client had already completed a significant amount of work using their own finances – this loan would be used to complete internal works, including the electrical, plumbing and carpentry installation.
Having already been converted into two, three-bedroom semi-detached properties, the development’s potential was clear to see, as it represented an important opportunity to improve the UK’s current housing dilemma through the provision of two modern homes.
To ensure the client’s vision for the project could be realised, Signature’s lending team worked quickly to conduct all the necessary background and credit checks, ensuring they had the means to complete the development as planned.
The in-house legal team at Signature can focus solely on projects on which the business is lending, ensuring a faster turnaround and better communication than when third-party solicitors are engaged on either side of deal.
An 18-month loan term was agreed which was deemed enough time for the client to finish the development, before renting out the property. The client’s proposed exit route would be the sale of a separate property, but a second exit strategy was also outlined as backup.
Either scenario would be adequate to redeem the loan in full, and with strong demand for housing in the local area, Signature was satisfied the proposal met all the necessary criteria and were happy to proceed with the funding.
Tony Gilbertson, CEO at Signature Property Finance, commented:
“Throughout our history, we have remained committed to helping clients by treating loans of every size, from £50k to £3.5M with the same efficient, professional approach that ensures they have the support to bring projects to life.
“Given what we have seen in recent years with regards to the UK’s housing crisis, any development that promises affordable housing to residents must be considered a good thing, so it’s important that we work closely with clients to provide the funding they need.
“The client’s proven track-record made it easier for us to find a suitable solution, as we were confident in their ability to deliver the project and follow their proposed exit strategy. We are keen to watch the development progresses and work with the developer again soon.”
The developer added:
“We’d already made a strong start to the renovation, so to ensure the remainder of the project was completed in good time, Signature’s experience and commitment to providing the trademark efficient service we had heard so much about, was vital.
“Their support has been second to none and very personal in nature. It’s not a team of talking heads sat at their desks, but a business that like to get out and meet their borrowers, which is the best way to build the strong long-term relationship that benefit us and lenders like Signature.”