Signature provides much-needed development loan to support with the construction of two Scottish properties

The widespread impact of the UK’s housing crisis has been well-documented, as experienced property developers work tirelessly to propose and deliver much-needed projects in a bid to improve the current situation.

Given the importance of such developments, short-term property finance providers, like Signature Property Finance, must act quickly to provide the necessary funding, ensuring opportunities progress on suitable terms, without unwanted delays.

One Scottish developer recently experienced this speed of service first-hand, after being introduced to Signature through Concept Financial Group. A loan of £355,000 was required to develop two new-build residential units against a freehold site, with a view to market and sell both properties upon completion.

Before providing the funding, Signature conducted all the necessary background and credit checks, which the developer passed comfortably. Once agreed, the loan could then be used to fund the site works and construction costs, before supporting the marketing and sales process.

Strong demand for property

Located in a small modern town with world-renowned golf courses and attractions nearby, the site had a proposed development for two detached four-bedroom homes, along with car parking. Situated in a prime position, the site is surrounded by mostly residential properties, with excellent access to all local services and amenities.

At the time of the inspection, no works had commenced on site, so the valuer assumed that both properties would be finished to a good and modern standard. Both values were then determined on a comparable basis and residual approach, bearing in mind the development’s location within a popular residential area.

During the process, the valuer said they anticipated a ‘good’ demand for both properties, and after an in-depth analysis of the development, attributed an end value of £300,000 for each unit – a GDV of £600,000, which was also supported by Signature’s internal audit surveyors. This would net the developer a healthy profit upon the completion and sale of both houses.

Given the developer’s experience of delivering other similar projects, a 12-month term was deemed enough time for the developer to market and sell the properties – an exit strategy that was considered ‘robust’ by the valuer.

Signature Property Finance Lending Manager, Alan Coats, commented: “Once again, our ability to provide much-needed funding in quick turnaround stands testament our team’s collective experience and their commitment to helping clients move forward without unnecessary delays.

“As a short-term property finance provider, we understand that time is of the essence for many developers, as opportunities are lost if the required funding is not secured in time.

“Thankfully for our clients, our team has extensive experience of all areas of the property market, which allows them to offer funding on terms that meet their unique time and budget requirements.

“Of course, the process is made much more efficient when working with experienced brokers, like Concept Financial Group, as they too know have an in-depth understanding of what is required to make a good, mutually beneficial deal.”

Mark Reidy, Owner of Concept Financial Group, added: “This is the latest deal in what is a long list of transactions completed with Signature Property Finance this year alone. Collaborating with a professional lender like Signature ensures our clients benefit from quick access to bridging and development funding on competitive terms through fast commercial decisions, all backed by a reliable service and certainty of funding.”