Finance 4 Business
As a result of lockdown measures and uncertainty within the sector due to the wider impact of the pandemic, the property market has experienced its fair share of ups and downs over the past year and a half. Luckily, thanks to the stamp duty holiday and an ever-increasing demand for property, the sector has experienced a boost over the past few months.
Currently, prices are still rising thanks to steadily increasing demand with fewer properties to choose from. For investors and property developers, this presents an excellent opportunity to fill a gap in the market.
Filling this gap requires the right finance, of which there are plenty of options to choose from depending on the projects’ requirements. Most types of property development finance are intended to be a short-term funding solution, allowing developers enough time to complete the construction stage and then arrange a suitable exit strategy, whether this is through sale of the properties or refinancing to a longer term solution.
Here’s what investors and developers can consider when financing their next property venture in 2021:
Finance for ground-up developments
Many developments require funding for 100% of the build costs, as well as any funding towards the purchase of the land or site itself. This type of finance is often suitable for someone who has purchased a piece of land with planning in order to use it for development, and is usually lent based on the borrower’s experience as well as the overall costs involved in the project and overall end value of the site (also known as GDV).
Bridging finance for refurbishment
If you’re looking to make alterations to an existing property, you may benefit from a refurbishment bridging loan. This type of loan “bridges” the gap between you and more conventional types of finance, allowing you to access finance quickly. This can be ideal for refurbishment projects, ranging from light to heavy.
Other expenses to consider
Not only are property development loans subject to interest rates, but there can also be additional fees depending on the loan term and the total amount you’re intending to borrow. You might also be liable to pay the loan back in full once you’ve sold the properties, or, depending on the lender, pay the amount back over multiple instalments.
Why a broker is the best solution
When it comes to property development, the easiest way to apply for finance is through an experienced and knowledgeable broker. A broker will have considerable experience in the sector as well as a raft of long-term relationships with lenders to help you find the best finance solution for you.
If you’re looking to finance your next development, Finance 4 Business can help. We can guide you through every step of the process, helping you to avoid many of the financial pitfalls that new developers can often encounter.
Get in touch with our development team today by calling us on 0121 309 0444 or emailing us at email@example.com