Property Development and Refurbishment

"Property development funding is the term used for funding a building project of a property.

It can cover residential properties and commercial properties of all types from a land site to a conversion. If the property development has structural changes that are required this can often be described as a refurbishment property and it is good to check which category this can fall in to."

Refurbishment or ground up development?

Refurbishment loans where little or no structural changes occur can be considered as lower risk than ground up developments where the entire scheme has to be built from scratch. This sometimes means that schemes where it is more of a refurbishment can also have lower offers of funding. 

To find out whether your development would be considered as a refurbishment project and if you feel you would like some help please feel free to call us.

Please contact us on 08007723180 or alternatively email us at info@pitch4.com If we feel you require more help we can always introduce you to a broker who specialises in this area.  

Documentation:

Property development funders may ask for substantial paperwork prior to funding a transaction. This may include figures such as your build cost, purchase price or value of the site ( any current debt on the site if owned already) as well as a development appraisal and CV of what experience you have in development. 

At Pitch 4 we can help you with all of this documentation. 

Experience:

Some lenders will want to lend to developers who have experience of similar projects. This is not always the case and the lender will ask the question regarding your previous experience. 

Occupying the Property:

Please ensure that all enquiries on the site are made for property developments that you have no intention of occupying as these need to be administered by either regulated mortgage brokers or the regulated self build loan providers themselves. If you need recommendations in this area please feel free to contact us and we will hand pick the relevant broker to help you. 

Surveyors:

Development lenders may ask you to have a QS (quantity surveyor) at each stage of the drawdown of their loan. Although this may seem intrusive you will find that this is an excellent way to ensure that your development is moving in the right direction and at the agreed costs. They will ensure that the work has been carried out to allow the next drawdown. 

You will need to ensure you have a building regulations surveyor to check that all works have been carried out to legal specifications. 

 

Insurance:

You will also need to inform your buildings insurance company that you intend to carry out work at the property. Otherwise, any claim could be refused if they had not been made aware of the works that are to be carried out. 

Other matters to consider whilst carrying out a property development are as follows:

Contingency: Factoring a contingency amount for unexpected extra costs

Insurance: Ensuring that your contractors all have professional indemnity insurance and the level that this covers ( this will be relevant depending on your project size). 

CIL’s: Are there any Community infrastructure levy payments (CIL’s) that are required or Section 166 requirements. All of this information should be included in your planning permission but if you have any doubts please do not hesitate to contact us. 

Party wall agreements: Have you instructed a party wall surveyor who will inform your neighbours of the work that will be occurring? 

These are all factors that are worthy of consideration. 

Conclusion:

A lender will want to see that the project itself delivers a profit as otherwise the risk of carrying out the work would be outweighed by potential risks. If you haven’t got your own appraisal document please let us know and we can help you with this. This document can then work out what your profit on cost is with regards to the development itself. 

It is also useful to share your plans prior to a planning application with local agents who will give you a guide value to what your scheme will be worth having been completed. It is good practice to get a couple of opinions so you can garner as much information as possible beforehand. It is also important to ask questions such as what buyers are looking for, where do they get the most enquiries from and are properties without outdoor space attracting less values. 

Please contact us on 08007723180 or alternatively email us at info@pitch4.com