The Saffron Building Society has unveiled a new, smaller development finance loan for people looking for an advance of between £150,000 and £500,000 to build or renovate a property to sell on the open market.
The Smaller Development Loan, which is in addition to the Saffron’s established products financing larger projects of £500,000+, is supported by a team of relationship managers offering expert guidance for customers working on small development projects throughout England and Wales.
The Saffron will lend primarily for new builds and conversions but will in some circumstances also consider funding projects which are part completed and which require additional funding to complete the project.
The Saffron’s Smaller Development Loans can be used for new build flats and houses; conversions (including barns), renovations and extensions and part completed sites.
Funding is available between £150,000 and £500,000, with leverage at the lower of 75% of project costs and 65% of GDV (maximum day one advance 65% of purchase price).
Interest rates typically start from 1% per month and there is an arrangement fee of 2% and an exit fee of 1%.
Fixed legal costs will be typically £1,200 for a single titled property.
Quantity Surveyor (QS) fees do not apply; the Saffron’s internal QS monitors all sites so there are no external monitoring fees.
Monitoring costs are £100 per visit plus out of pocket expenses.
In addition, when lending to limited companies, personal guarantees will be required.
Each customer taking out a development finance loan will be supported by a dedicated relationship manager throughout the build.
Peter Owen, head of property development at the Saffron Building Society said: “Our customers like the fact that we take a personal interest in their projects and provide ongoing advice, guidance and support throughout the complete development process.
“We don’t just lend and walk away, we are dedicated to the project and we visit the site to ensure we support our customers as the project progresses. We offer regular assistance wherever possible to enable them to overcome potential issues, such https://mortgagesoup.co.uk/wp-admin/media-upload.php?post_id=80025&type=image&TB_iframe=1as unavoidable cost and time overruns.
“Many of our customers stay with us and ask for support on subsequent projects – it becomes a partnership. For us, it’s not just about finance. It’s about lending our years of experience to help our customers achieve a successful outcome.”
