Property Development Finance in Scotland.

FAQ: PROPERTY DEVELOPMENT FINANCE FREQUENTLY ASKED QUESTIONS

 

How are Property Development Loans in Scotland Structured?

 

When it comes to development loans, lending will be secured against property or land, lenders will advance a percentage of the purchase price or the value (if a planning gain has increased the value). Then, based on a Quantity Surveyor's report, the lender will fund the construction costs or refurbishment costs in arrears.

 

What is the Minimum Loan for a Property Development Loan in Scotland?

 

There is a minimum loan amount of £750,000 to a maximum of around £50 million for development loans, however bridging loans fill the development finance gap for smaller development projects from £50,000 to around £2 million.

 

How are Property Developments Financed?

 

Development finance is designed to help with the purchase and build costs associated with a residential or commercial development project. Property development loans are usually for a period between 6 and 30 months with the capital loan and interest repayment coming from the sale proceeds or from re-financing the development loan upon completion to a longer term commercial loan.

 

Are 100% Property Development Loans in Scotland Possible?

 

It's certainly not easy, however In certain circumstances it is possible.

 

Some of the main circumstances could be;

 

1. When the property or land you are buying has increased in value due to planning permission being granted resulting in your purchase price being below market value.

 

2. When you have negotiated a below market value purchase price.

 

3. When you joint venture with a property or landowner, the unencumbered property or land can be used to secure the borrowing.

 

4. When you offer an additional property as security in order to borrow up to 100% of the purchase price.

 

How do I Apply for a Property Development Loan?

 

Most Development Finance and Bridging Finance lenders generally require applicants to submit their applications through an experienced broker who can help guide them through the process.

 

Get in touch with us for a no obligation discussion and learn how we work hand in hand with our clients to ensure a successful application, with over 30 years experience and a complete understanding of the Scottish property development finance market we are ideally positioned to guide you through the application process.