Best private property development finance options

Best private property development finance options

Property development finance plans for all types of developers

Getting into property development is not an easy decision. It requires a lot of planning, thought and finance in order to be able to pay for the development project.

But it is hard to get the financial backing for it. Many banks reject people based on their credit score and not believing there is potential for the property to do well.

It’s easy for developers to feel demotivated because of the lack of opportunities they have in order to pay for their property development

Hunter Finance is unlike traditional banks as they prefer an approach that focuses on potential and giving a quick ‘yes or no’ in order to get the property development started.

Am I eligible?

Hunter Finance doesn’t loan to only one type of person, they offer private property development finance to:

  • Private individuals
  • Property developers
  • Property companies
  • Building companies
  • Real estate developers
  • Commercial developers

Their customers are based around London, Sussex, Berkshire and other surrounding areas.

Unlike the traditional banks or other financial loan providers, their aim is to give everyone that is passionate about developing a property a fair chance to have access to the adequate amount of finance.

How does the loan structure work?

Their loan structure works in a seven-stage cycle:

  1. Loan to value: They lend up to 60% of the money
  2. Foundations: Access to the first set of the funding so the work can begin
  3. Wall layout: The next stage of funding is released when the foundations have been checked
  4. Roof: Shell and the roofing of the buildings are checked
  5. 1st fix: Inserting the cables, inserting the water supple and constructing the walls,  checking the floors are complete, and ensuring the ceiling is finished completion
  6. 2nd fix: Having the electricians, plumbers and carpenters finish their final work
  7. Completion: The final funds are available to access in order to finish the property and prepare for the sale

For more information about the different methods of private property development finance, you can read ‘how to finance your property development’.

Making property dreams a reality

Through their multiple private property development finance options, they have loaned £75,000,000 to property developers so they can start the property development process.

Their property portfolio ranges from apartment buildings, detached houses, semi-detached houses and farm houses.

Contact us by email on sales@uk-life.co.uk

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Getting into property development for the first time?

property development finance

Want to build? Finance options

Three types of development finance

The first thing to know about property development financing is that there is no such thing as a single model of financing for the entire industry.

There is, in fact, a vast array of different types and models and products of loan finance that exist to cater to the wide range of different types of developments and developers.

To work out which type of financing is most applicable to your potential development, let’s break down the three main types in the UK market:

1) Land Purchase and 100% Build Cost Loan

Development finance is one of the most common types of loan provided by alternative lenders. See lending criteria examples.

Upon successfully applying to receive development finance from a private lender, you could be eligible to receive capital equivalent to 60% of the land purchase cost and even up to 100% of the total build cost of the project.

This money would not land in your account all at once but would be drawn down in stages, requiring the sign-off of a site surveyor at each stage of the build.

2) Bridging Loan

These loans are an instrumental part of major property developments.

Unlike the loans made to developers to secure the land and building and labour costs of property development, a bridging loan is a short-term injection of cash into a project at a critical time.

The loan literally creates a bridge of funding between the expected finish of a build and the sale of a project that allows a developer to repay their original loan.

This bridging funding can cover unexpected delays in the building timetable, or cover the length of time it takes to eventually sell the property.

Some key features of the bridging loan are:

  • The loan can carry up to 75% of the property value
  • They can have fixed or variable interest rates
  • Interest can be paid monthly or at the conclusion of the loan

3) Mezzanine Loan

This represents one of the most complex types of property development loan, but also one of the most important.

Mezzanine loans (sometimes called Mezzanine debt) is usually quite an expensive form of fundraising as it presents a relatively greater risk to the lender.

This is a form of additional financing for a developer who is already subject to a mortgage with a bank and usually carries interest rates of between 10% and 30%.

It can be used to cover:

  • Unexpected overheads
  • Expanded development
  • Additional costs due to changes in planning permission
  • Costs arising due to delays

The major benefits of mezzanine funding are:

  • Immediate access to necessary cash
  • It is often listed as equity (rather than debt) on a company balance sheet, meaning greater access to future financing

More capital news:


Can Living in a Retirement Home be good for you

As most people reading this will already be aware (or soon be aware of), making the decision to move a family member or even to move yourself into a retirement facility is a difficult time in anyone’s life.

If chosen correctly, it can be a great decision that benefits everyone involved but that doesn’t make it any less emotional as it simply marks the end of an era in a similar way to when a child moves out of the family home. A retirement community in whatever capacity it comes is a great place for the elderly to live an active and enjoyable life with similar individuals in a safe and well looked after environment.

There are many different types of accommodation available, for example, a retirement home or exclusive apartments within a retirement complex. Whilst there are obviously exceptions, a significant amount of retirement villages and properties are usually located in the countryside or by the sea with a growing number of developments in the latter.
There are varying levels of retirement communities starting from “affordable” retirement housing which are frequently run by not-for-profit agencies and charities, such as the local council. This offers a reasonable standard of living to the poorer local residents who qualify for these assisted living facilities. Whilst these homes are required to charge rent to support their upkeep, the fees are often very low, often as low as £40 a week. These kinds of properties are very basic but still comfortable for the residents with 24-hour emergency call available to them in the case of any health issues as well as carers who will visit regularly to ensure everything is ok. For more information about this low-cost retirement housing, you can visit the government page at www.direct.gov.uk/en/CaringForSomeone/CareHomes.
On the opposite end of the scale is the resort-style retirement communities such as those offered by Richmond Villages (www.richmondvillages.co.uk) and St Georges Park (www.stgeorgespark.co.uk), which have a wide-range of modern facilities for the residents to use. As well as nice living accommodation, the resorts will have a variety of activities available such as swimming pools, tennis courts, spas, gyms as well as restaurants, hairdressers, shops. These are very much based on the holiday resort feel, attempting to offer anything that the residents may need or want. This may make you want to retire now but unfortunately as you’d expect the fees can be quite high, although with massive variations based on the quality of and facilities in the resort.
For most people in the UK, they will be looking for somewhere in the middle such as care homes offered by Pegasus (www.pegasus-homes.co.uk). These retirement communities will usually be privately funded (i.e. by the residents) and in most cases, be profit-making companies. These are usually pleasant retirement homes or villages designed to give residents support and assistance where necessary but can also feature many modern facilities such as swimming pools as well as dedicated rooms to enjoy activities such as dancing, arts and crafts, libraries etc. As with the resort style retirement communities, the quality and number of these modern features will obviously effect the cost for the resident.

Retirement Charities and Associations

Throughout the UK there are many charities whose aim is to help make life easier for the elderly. If you’re only just retiring now it’s probably not something you need to give much thought to but in a decade or two’s time, you may find that you don’t have the same support from family or friends that you used to. This is very rarely because you no longer have them or they no longer care, but simply because they have their own lives, families and problems and it may even be a conscious decision by you not to rely on them.

One charity that focuses on filling this gap left by your previous support circle is Age UK (www.ageuk.org.uk). Age UK is a recent merger between the two biggest age-related charities, Age Concern and Help the Aged. Admittedly the names, particularly before the merger, sound quite patronising and you may feel that you don’t need that kind of help but they deal with all aspects of growing older from where to invest your money, information on local retirement homes and communities and even more trivial things such as the best holiday destinations for retired people and help if you are looking to get back into employment in some capacity. They have over 330 local centers around the country and help over 5 million individuals every year, so they are by no means a small charity and pride themselves on being able to support individuals in all areas of their lives.

Another charity specialising in working with the older generation is Independent Age (www.independentage.org). They are a much more active support group for those that need them as opposed to a charity in the traditional sense and encourage the older people they support to contribute to the support community if they would like to. Many of those who are supported by Independent Age then go on to volunteer whether that be supporting others or acting as fundraisers to help the charity increase the scope of it’s works. The charity even has a magazine that is made up of contributions from these volunteers, designed to address issues that other post-retirement adults may come across.

Whilst these are two of the biggest charities in the UK that focus on retired and elderly individuals, there are many more local or regional associations and charities. These are often dependent on what you do for a living (such as www.csp.org.uk/membership/retirement – the retirement association for physiotherapists or www.narpo.org.uk the national association of retired police officers) or where you are located in the country (such as www.surreyretirement.org.uk for retired persons in Surrey). If you are thinking of retiring or have already retired and looking to join one of these associations, even if it is just to meet people in a similar position to yourself, the quickest way is to simply search on the internet for retirement associations in your region. Alternatively you can visit your local Age UK office and they can point you in the right direction.

Mobility Scooters, really?

Not so long ago the only realistic option for most of the (non-royalty!) population losing the ability to walk whether permanently or even just finding it difficult, was to buy a wheelchair which was quite an expensive option. However, the wonders of technological advancements has led to a much more practical, enjoyable and not outrageously expensive option. Mobility scooters are now not only an affordable option for those suffering mobility problems but are even starting to become quite an attractive option.

Obviously, the terms used above “not outrageously expensive” and “affordable” is very dependent on the person you are asking but the main problem mobility scooter retailers such as www.valuemobility.co.uk and www.discountmobilitydirect.co.uk have encountered is it’s low and driving range which was severely limited. However, even more, technological advancements have now given us modern scooters that can drive as far as 25 miles on a single battery charge making them a lot more of a realistic option than their predecessors or the electric wheelchair.

More and more people are starting to realise that a mobility scooter is a very beneficial alternative for someone who, through temporary or permanent injury or the virtually inevitable physical restriction that comes with old age, is restricted to a wheelchair. However, an unexpected outcome for manufacturers is that the biggest market for retailers of these scooters has not been the former wheelchair users who do continue to buy them, but rather from those of advancing years or those with a weight and size problem that limits their mobility. For example, the Pride Maxima 4 model can hold over 35 stone of weight (www.discountmobilitydirect.co.uk/mobility-scooters/pavement-mobility-scooters/pride-maxima-4.aspx).

For the older person, a mobility scooter can take over the walk to the shop, or a visit to a friend. Once at the destination the rider can then dismount and walk around a store or a friend’s home on foot.
When used in this way a mobility vehicle actually promotes health and exercise by removing distance barriers and opening up travel options. Using a scooter in this way actually increases the amount of time a mobility restricted person spends outside their home and encourages them to spend more time outdoors.

For those with mobility restricting weight problems, a scooter can remove the constraint of having to stay close to the home for fear of becoming out of breath or exhausted. A vehicle of this type makes getting around easy and worry-free and it can always be parked up if the owner wants to take a walk or wonder around a shop on foot and virtually all modern mobility scooters have baskets or baggage areas making them ideal for carrying shopping and the seats are padded and comfortable.

Whether you’re getting on in age and just want to increase your mobility, or you are disabled and view owning electric mobility as a means of improving your quality of life, purchasing an electric mobility scooter will be one of the best investments you have ever made. With electric mobility scooters getting faster, cheaper and lighter more and more people are making this investment and with sites such as www.preloved.co.uk offering the opportunity to purchase second-hand mobility scooters at much lower prices, even those that didn’t think it was an affordable option are starting to re-think their decision.

Is it time for a stair lift?

When you are you younger you often take using the stairs easily for granted but as you grow older, even this simple task can become quite a difficult process. Stairlifts are a great way round this problem but actually taking the step to purchasing one and facing the fact that age is and will continue to restrict your ability to do certain things is quite a hard step. However, a stairlift may be the ideal solution to your problem that can be both efficient and economical.

The other major choice is to move home and buy/rent a property which is all on the same level such as a bungalow. However, as well as the major upheaval over moving house (which isn’t particularly pleasant at any age), and the loss of close friends and neighbors, it can also have serious financial implication – even if you are buying a house of exactly the same value, taxes and legal fees will usually cost you several thousands of pounds. Instead, the installation of a stairlift whilst still not a cheap solution, will cost a lot less and will allow you to stay in the comfort of your own home without having to struggle up and down the stairs, allowing for simple and easy movement from one floor to the next.

There are many different stairlift manufacturers and suppliers, including both local and national suppliers. You will have to decide if you want to go for a national brand, or a local company who is on your doorstep but when making this decision bear in mind, that it is a better idea to select a retailer who can offer you a range of manufacturer’s choices. The reason for this is that each manufacturer will have a range of products and each may have limitations for a particular installation/location. So select a company who can offer the best stairlift for your needs irrespective of ‘brand’.

Minivator (www.minivator.co.uk) is one of UK ’s leading stairlift manufacturers and producers. Their stairlifts are world-wide renowned and are widely used in homes everywhere.
Stannah (www.stannahstairlifts.co.uk) is a company that produces a wide variety of stair lifts for consumers in many parts of the world, especially in the US and the UK . The quality of their stair lifts is highly praised and they are among the best stair lifts in the world, with 140 years of experience in manufacturing stair lifts behind them.
Another popular manufacturer, ThyssenKrupp Access (www.tkaccess.com), make reasonably priced stairs lift that are of extremely good quality as well. Although their experience of over 50 years is nothing compared to Stannah’s 140, their models are often both trendy and safe. Indeed, many consumers agree that ThyssenKrupp Access produce some of the world’s best stair lifts.