Development Finance in Street
Get In TouchJPM Residential helps property developers and investors arrange development finance in Street.
Development finance provides funding for property development projects, including new builds, conversions and substantial refurbishment schemes. Finance can potentially cover the purchase of the site or property as well as construction and development costs.
Whether you are developing a single property or completing a larger residential, commercial or mixed-use scheme, we can help you find suitable development finance.
What is Development Finance?
Development finance is specialist property funding used to finance construction, conversion and major refurbishment projects.
It can be used to fund the purchase of land or an existing property and contribute towards the costs of completing the development.
Unlike a conventional mortgage, development finance is usually structured around the project, with lenders considering factors such as the purchase price, development costs, planning permission, expected Gross Development Value (GDV) and developer experience.
JPM Residential can assess your project and help identify suitable development finance options.
What Types of Development Finance are Available?
Different development finance options in Street are available depending on the size, type and structure of the project.
Options can include:
Residential Development Finance: Funding for houses, apartments and other residential development projects.
Commercial Development Finance: Finance for the development of offices, industrial units, retail property and other commercial schemes.
Mixed-use Development Finance: Funding for projects combining residential and commercial property.
Ground-up Development Finance: Finance for constructing new properties from the ground up.
Conversion Finance: Funding for converting existing buildings into a different use, subject to the necessary permissions.
Heavy Refurbishment Finance: Finance for substantial property renovations and structural works.
The right finance will depend on the site, proposed development, project costs, experience and intended exit strategy.
What can Development Finance be Used For?
Development finance in Street can be used to fund a wide range of property development projects.
These can include:
New-build houses
Apartment developments
Commercial developments
Mixed-use schemes
Property conversions
Major refurbishments
Property extensions
Land acquisition
Construction costs
Professional fees
Site preparation and infrastructure
The lender will assess the proposed project to determine which costs can be included within the development facility.
Who can get Development Finance?
Development finance is available to property developers and investors undertaking viable development projects, subject to lender criteria.
We can help clients including:
Experienced property developers
First-time developers
Property investors
Limited companies
SPVs
Landowners
Residential developers
Commercial developers
Lenders in Street will typically consider your experience, deposit or equity contribution, planning status, development costs, expected GDV and proposed exit strategy.
First-time developers may also be able to obtain development finance, although lenders can require additional experience within the professional team or a larger equity contribution.
Contact JPM Residential to discuss your proposed development and the finance options that may be available.
How Much can I Borrow with Development Finance?
The amount you can borrow with development finance depends on the site or property value, development costs, expected Gross Development Value (GDV) and your contribution to the project.
Development lenders in Street can assess borrowing using several measures, including loan-to-cost (LTC) and loan-to-GDV.
In suitable circumstances, development finance may fund a substantial proportion of the land or property purchase and development costs, although lending limits vary between providers and projects.
The lender will also assess whether the expected value of the completed development provides sufficient security for the proposed borrowing.
JPM Residential can review your project costs and expected GDV to help establish how much development finance may be available.
How Much Deposit do I Need for Development Finance?
The deposit or equity required for development finance depends on the purchase price, development costs, expected GDV and lender criteria.
Developers in Street BA16 0 will normally be expected to contribute their own funds towards the project rather than finance the entire development through senior development debt.
The required contribution can also depend on:
Developer experience
Planning status
Property or land value
Total development costs
Expected GDV
Project type
Proposed exit strategy
Some developers may be able to use existing equity in the site or property as part of their contribution.
JPM Residential can assess the project structure and help establish the level of equity you may need.
How Much does Development Finance Cost?
Development finance interest rates in Street can typically be around 6% to 12% per annum, although pricing varies considerably depending on the project and lender.
The rate available can be affected by:
Loan amount
Loan-to-cost
Loan-to-GDV
Developer experience
Project type and complexity
Planning status
Development timeframe
Exit strategy
Additional costs can include:
Lender arrangement fees
Valuation fees
Legal fees
Quantity surveyor or monitoring surveyor fees
Broker fees where applicable
Exit fees where charged
Arrangement fees can commonly be around 1% to 2% of the loan amount, depending on the lender and facility.
Interest is normally charged on the funds that have been drawn rather than the entire facility from the outset, although the exact structure depends on the lender.
Contact JPM Residential to compare development finance rates and costs for your project.
How does Development Finance Work?
Development finance is usually structured around the progress of the development, with funding released in stages as the project moves forward.
The process normally involves the following stages:
Initial Assessment: We discuss the site, proposed development, purchase price, development costs, planning status, expected GDV and exit strategy.
Lender Search: Suitable development finance lenders are identified based on the project.
Application: Detailed information about the borrower and development is submitted to the lender.
Valuation: The lender arranges an assessment of the property or site and proposed development.
Finance Offer: If the project meets the lender's criteria, a formal development finance offer is issued.
Initial Drawdown: The first funds are released, potentially contributing towards the purchase or refinancing of the development site.
Staged Drawdowns: Further funds are released as construction reaches agreed stages.
Development Completion: The construction or refurbishment works are completed.
Repayment: The development finance is repaid through the agreed exit strategy, usually property sales or refinancing.
JPM Residential can help structure the finance and manage the application through to completion.
How Long does it Take to get Development Finance?
Development finance can typically take around 2 to 6 weeks to arrange, although the timescale depends on the complexity of the project.
The lender may need to assess planning permission, development costs, construction schedules, professional teams, valuations and the expected GDV before issuing a formal offer.
Straightforward projects with complete documentation can progress more quickly, while larger or more complex developments may require additional due diligence.
JPM Residential can help prepare the application and liaise with lenders to keep the finance progressing towards completion.
Frequently Asked Questions
Can I get Development Finance as a First-time Developer?
Yes. First-time developers can potentially obtain development finance, although lender criteria may be more restrictive.
The lender may consider your professional team, previous property experience, available equity and the complexity of the proposed project.
Do I Need Planning Permission for Development Finance?
Not always, but having the required planning permission in place can provide access to a wider range of development finance options.
If planning permission has not yet been granted, alternative short-term finance may be required until the project is ready for development.
Can Development Finance Cover Land Purchase?
Yes. Development finance can potentially contribute towards purchasing land or an existing property that will form part of the development.
The amount available will depend on the purchase price, site value, development costs and expected GDV.
Can Development Finance Cover Construction Costs?
Yes. Funding construction costs is one of the primary purposes of development finance.
Construction funds are commonly released in stages as the development progresses rather than being provided in one payment at the beginning of the project.
What is GDV in Development Finance?
GDV stands for Gross Development Value and refers to the estimated market value of the completed development.
Lenders use GDV alongside development costs and other factors to assess the project and determine how much they may be prepared to lend.
Can a Limited Company get Development Finance?
Yes. Limited companies and SPVs commonly use development finance for property development projects.
The lender may assess the company, directors, development experience, project costs, expected GDV and proposed exit strategy.
How is Development Finance Repaid?
Development finance is normally repaid when the completed properties are sold or the development is refinanced onto longer-term property finance.
The proposed repayment method forms the project's exit strategy and is an important part of the lender's assessment.
Get In Touch
JPM Residential can help you find development finance for residential, commercial and mixed-use property projects in Street.
Whether you are purchasing land, starting a new-build development, converting an existing property or completing substantial refurbishment works, contact us to discuss the development finance options available.
We cover Street (Somerset)