Tuesday 05 Aug 2014
The total property development finance handled by commercial finance specialist Crystal Mortgages has doubled so far in 2014, according to new figures. The company reports that it has issued terms on mortgages totalling £20,641,220 compared to £10,359,736 for the same period last year, with the total number of completions up 33% year-to-date.
An increased level of confidence being shown by lenders has been cited as a main reason behind the rise, with the number of available products being offered by Crystal Mortgages rising from two to six over the last year. Up to 75% of total costs are available as well as 100% of build costs. Rates are as low as 4% above the Bank of England Base rate while loans are available from £25,000 to £100 million.
Joe Breeden, Managing Director at Crystal Mortgages, said: "Development finance has consistently been in demand in recent years but there has been a shortage of suitable projects and lenders have been reticent." "Now lenders are returning and we are seeing development finance picking up very quickly, not just within the M25 area and on land with planning permission, but across other areas of the UK on unplanned sites." He pointed to a new building project in Lanarkshire as a good example of the kind of business being done. An experienced developer required funding to complete 44 out of a total project of 51 houses.
Crystal Mortgages utilised the seven unencumbered units along with the site to complete 100% of the remaining build cost, with the first drawdown taking place just two weeks after an offer from one of the company's lending partners on a facility of just over £1 million. Joe continued: "Development finance often requires a fast response and we have a team in place that has the specialist knowledge to put the right deal in place with the right lender.
"As a company we can help to provide finance for the purchase of the site, construction costs, infrastructure and services, ancillary professional costs and the capitalisation of interest, within our standard lending criteria." "We will also consider providing finance for all forms of residential and commercial development from conversions of existing buildings through to new build schemes and everything in between."