Signature Property Finance remains committed to supporting property development projects that provide much-needed homes, helping to address the UK’s housing problem in the process.
To ensure important opportunities are not missed, developers require prompt lending decisions to be made, so that work can begin in line with the strict time and budget requirements outlined at the project’s outset.
Also, it’s important the terms agreed are suitable for all parties, so that the preferred exit route can be achieved at the end of the loan period.
Signature recently utilised its extensive experience of the property market to provide a Wales-based developer with a significant £467k loan to develop four new build residential units, with a view to sell the homes once completed.
Unfortunately the original developer had problems and the site stalled in 2016, with the build barely out of the ground. But the new applicant recognised the potential, acquired the site and sought funds to continue the project.
As with every project Signature are involved in, the experienced lending team first conduct all the necessary background and credit checks to ensure the developers have the means and experience to undertake the development.
Once satisfied with the proposed development and the size of the loan needed to complete the site, terms were agreed and funds were made available to allow work to begin without unnecessary delays or any nasty last-minute surprises.
Sought after properties
Located in a small village with strong transport links to the Welsh town of Caerphilly, the security comprised of a building site with planning permission for four, two-bedroom semi-detached properties, each with a small study space that could be converted into a third bedroom.
The proposed homes would also have a patio and garden at the rear, with plans to include enough parking to accommodate residents, which would make the homes desirable to young families.
At the time of the valuation, only the site’s foundations had been laid with development work yet to have started. Therefore, the value was based on its current planning, as well as comparisons with other properties of a similar nature in the local area.
Following a comprehensive assessment, a Gross Development Value (GDV) of £720K was agreed for each property, a value supported by Signature’s panel surveyors.
Upon completion, interest in the properties was expected to be high considering the location of the site and its attractive setting. Signature agreed provide a development loan of £467k on a 12-month term, which was deemed sufficient time to build, market and sell the properties.
The client’s proven track record as a successful property investor and developer combined with their site management qualifications gave Signature the confidence to make a decision quickly, allowing the project to progress without unnecessary delays.
Ken Davies, Consultant Relationship Manager at Signature, commented: “As a short-term property finance provider, we understand that time is of the essence for many developers, as there is a risk of opportunities being missed if a lending decision is not made quickly.
“Therefore, our experienced team have worked tirelessly to agree terms that make sense for all parties, ensuring the vision of the project is realised, so that prospective buyers have affordable housing made available to them.
“For this particular project, we were supporting a highly experienced developer with a comprehensive property portfolio, so we knew that the scope of the development was easily achievable, given the resources at their disposal.
“Therefore, with our criteria met, we were able to agree a development loan in excess of £450k, which would allow the necessary work to go ahead, before all four properties were sold on the open market.”
A representative from the developer, added: “Since approaching Signature for support, we have been very impressed by how straightforward and efficient the process has been. It’s clear they are determined to get deals done and follow through on the promises made at the outset.
“They have a keen eye for detail and are committed to finding the best possible solution, which of course, makes for a smoother development throughout the delivery. I would highly recommend their services to any other developers seeking much-needed funding on a quick turnaround.”