Time is of the essence for developers, as strict deadlines risk being missed if efficient support is not provided. For this reason, the services of experienced short-term property finance providers are often called upon to ensure deals are agreed on suitable terms.
Once again, this was shown to be the case as Signature agreed to support an independent developer with the acquisition and renovation of a two-bed bungalow in Nuneaton.
Having already been purchased at a property auction, the client was keen to secure much-needed funding to complete the necessary repairs before renovating it into a four-bed HMO – a project that was expected to increase the property’s value by around £20k – £30k.
Given the tired condition of the property, a gross loan of £87,750 was required to complete a light cosmetic refurbishment that included the repair of damp issues raised by the valuer.
Although the client did not have extensive development experience, Signature was happy to assist following the completion of clean credit checks, which were especially necessary, as a large part of the property’s transformation would be funded by the client’s own income.
Upon closer inspection of the property, the client estimated a six-week refurbishment period before being refinanced onto a Buy-to-Let mortgage and relet in the months that followed. As such, a nine-month loan term was deemed sufficient time to complete the necessary works and find appropriate tenants.
The loan was well within Signature’s policy, and given the high demand for letting in the area, it was easy to recognise the long-term vision of the project, as well as the potential benefits it would deliver to residents.
Bob Stones, Relationship Manager at Signature Property Finance, commented: “The UK’s housing crisis has been well-documented, and it’s projects like these that will help improve the situation by providing residents with affordable housing options.
“In addition to this, the project represents an opportunity for Signature to support a relatively inexperienced developer, as they look to begin their journey through the completion of important schemes.
“Of course, the success of the development hinges on our ability to agree suitable terms, ensuring no stone is left unturned so the strict time and budget requirements can be met.
“Given the preparation that has gone into the deal, we are very much looking forward to supporting the developer and seeing the final results.”
The developer said: “As a developer, one of the most frustrating experiences is when important decisions are delayed and the opportunities are then missed. For this reason, we knew it was vital to engage an experienced short-term property finance provider with a proven track record of assisting clients.
“Thankfully, Signature’s team had in-depth experience of all aspects of the property market, and their professional approach reassured us that the development would progress in line with the strict time and budget requirements outlined.
“We would definitely recommend their services to any other developers looking to source much-needed finance, without any unwanted surprises.”