With the support of Signature Property Finance, a recently incorporated property developer secured the vital bridging loan needed to purchase a Halesowen-based property, with a view to let once minor renovations were completed.

“For some developers, the ongoing economic uncertainty can be a difficult obstacle to overcome, as lenders are reluctant to support projects, especially if the developer doesn’t have years of experience behind them. However, Signature have been a pleasure to work with, as they take the time to understand your vision for the project and make calculated lending decisions based on the thorough assessments they’ve made.”

Property developer in Midlands

Supporting promising projects

The company, which was only incorporated in January 2020, required assistance with the purchase of a property in Halesowen, which was currently vacant and in need of minor renovations.

Located near to Halesowen Town Centre, the mid-terraced two storey property comprised of two bedrooms, with a market value around £100,000.

With the minor damp remediations estimated at £2,500, the developer expressed their intentions to fund the renovations through their own personal funds, meaning a loan was only needed to support the property purchase.

Before a decision was reached, experienced members of Signature’s lending team visited the property to conduct a thorough cost assessment, ensuring the required funding was provided when it was needed.

Securing the right solution

With the ongoing economic uncertainty caused by Covid-19, some developers have found it difficult to secure the much-needed financial support to complete ongoing developments. However, our decisions are based on the long-term viability of the proposed project and whether the developer’s plans hold water in the current climate.

After conducting our own careful assessment, we were satisfied with the plans outlined by the developer and provided a bridging loan of £67,500 (75% LTV) to assist with the auction purchase.

We presented a loan term of 12 months on a retained basis in line with the current criteria due to the economic freeze, however the expectation is that the bridge will be cleared within three months and refinanced with TMW in line with the originally sourced finance.

The primary source of repayment is to refinance onto a BTL loan, with interest cover on a rental valuation of £7,140 per annum.

This project is yet another example of our willingness to work with developers of all experience levels. If we understand and trust the long-term vision outlined by potential clients, then we’re happy to support the development financially.

“The past few months have been very difficult for property developers, especially for those in the early stages of their journey, without an extensive property portfolio behind them. However, we’re always prepared to offer the financial support developers need if the long-term viability of the project can be seen and we’re confident in the plans provided. Project’s like this will only help improve the UK’s housing crisis, which has been well-documented in recent months.”

Michelle Walsh – Relationship Manager, Signature Property Finance