Refinance of an “almost complete” apartment conversion scheme

Deal Structure

£4.8m gross facility

65% Loan To Value

2% Arrangement Fee

Interest at 1% pcm

Deal Summary

Our experienced developer client approached us to refinance an apartment block which wasn’t quite at Practical Completion, and as such didn’t satisfy the criteria of the majority of the Bridging Lenders in the “Developer Exit” space.

The usual concern with refinancing such schemes is establishing the “current” market value given the incoming lender would base their loan figures on the current value. Typically, valuers will deduct a rather significant percentage after establishing the GDV figure and the Costs to Complete the scheme to reflect the “part-complete” position, which can often leave a significant gap between the gross loan to be repaid and the incoming lenders net loan amount.

Given the minimum works left to carry out, the valuer & lender took a commercial view to enable them to arrive at workable values and loan figures.

The majority of the scheme was pre-sold which was great, but that meant there were UN1’s on the title which might have presented an issue for other lenders, but our chosen lender managed to get comfortable with their risk.

The new loan will allow sufficient time for the sales to go through when PC documentation is in hand.

Contact John Waddicker

07974 703375

[email protected]