AREA: Surrey Hills
AMOUNT RAISED: £2.4m
PRODUCT USED: Ground-Up Development Finance
When a property developer spots a promising development opportunity, having the right financial backing is essential. This case study shows how we helped an experienced developer secure appropriate acquisition and development finance for a multi-unit project in Surrey.
Client Scenario
Our client had identified an opportunity – a plot in rural Surrey with planning permission for five detached houses. As an experienced developer with several successful projects completed, he had the expertise to make the project work but needed financial support to move forward.
The client needed £2.4 million to purchase the land and fund the entire construction process. Like many developers, his capital was largely tied up in his existing property portfolio, making quick access to sufficient funds challenging.
What made this situation particularly tricky was the client’s wish to secure both the initial purchase money and subsequent development finance from the same lender, aiming for a smooth transition between the two phases of the project.
Funding Solution
The rural location presented a significant challenge – finding comparable properties for valuation purposes wasn’t straightforward, making some lenders cautious. We needed to find a financing partner who understood development opportunities in less populated settings.
We approached several specialist lenders with appetite for development finance in countryside locations. By highlighting the client’s proven track record and presenting a detailed 32-week build schedule with comprehensive costings, we built confidence in the project.
Working closely with our network of private investors, we identified a funding partner willing to provide both the initial purchase finance and ongoing development funding. This removed the need for the client to switch lenders mid-project, saving both time and paperwork hassle.
After careful negotiations, we secured 65% of the Gross Development Value at competitive rates, with the funds structured as an initial acquisition loan followed by staged drawdowns throughout the construction process.
The lending solution was a Ground-Up Development Finance package. This provides funds for the purchase and development within the one facility.
Final Outcome
With our help coordinating between solicitors, surveyors, and the lender, the client completed the purchase within four weeks and began construction on schedule. The straightforward funding arrangement meant they could focus on the build rather than worrying about additional financing applications.
The project is now progressing well, with construction on track to complete within the planned timeframe. The client’s exit strategy involves selling three properties to repay the development loan and refinancing the remaining two onto a portfolio buy-to-let mortgage for long-term rental income and asset appreciation.
This case shows how specialist finance brokers can overcome location-based challenges and structure practical funding packages that meet both immediate purchase needs and longer-term development requirements. By understanding both property development processes and lender criteria, we helped transform a promising opportunity into a viable project.
