Building contractors often approach UK property finance for advice on getting into property development, and our most recent client showed more commitment than most. 12 months ago, our client, Steve, decided to sell his very successful building contractor to take up a new career in property development. Although Steve had 22 years’ experience in building, he had never gone the full length from groundwork to resale, so this was going to be a challenge.
Steve assembled a team and began work on the plot of land he bought from the proceeds of selling his business. Over the next 6 months, groundwork soon evolved into a house-like structure. The property was now wind and water tight with a pitched roof and windows and doors.
The plan was to create an executive property that reflected the affluent market in the local area. To bring this to a high standard, more funding was needed. Steve found UK Property Finance in an advert on Facebook promoting development finance and bridging loans. An enquiry was made, and within minutes, a UK Property Finance consultant was in touch with the client to understand his requirements.
The property had no existing mortgage, and because it was so tight, Steve was given a wide choice from the whole market. The rates were sourced based on the build type (timber frame), and because of the consultant’s experience, he was able to help the client complete an application quickly. Steve gave confirmation he wished to proceed, and a surveyor had already booked the site for the lender.
The valuation was processed, and the surveyor got in touch to inform UK Property Finance that the property value had come in significantly lower than the client expected. This was based on comparable evidence of similar properties in similar condition within the local area. The consultant called Steve to make him aware, but reassured the client they could find a solution.
The lender was contacted by UK Property Finance to find an amicable resolution. Both came to an agreement to offer the client a bridging loan known as a ‘tranche draw-down’. This was a great outcome for the client because they could immediately take a percentage of the loan they needed to commence work again. The remaining funds would be issued as the property value increased, reducing the risk for all involved.
The positive result spurred Steve on to resume work, and within a month, the outstanding work had been completed. UK Property Finance was able to support the client throughout the process and help with the first of many developments.