AREA: Essex
AMOUNT RAISED: £3,800,000
PRODUCT USED: Bridging Loan
Client Scenario
A property developer with 25 years of experience encountered a time-sensitive situation.
They had obtained planning permission for a mixed-use development in Essex, comprising 18 units: 6 luxury apartments, 8 townhouses, and 4 commercial spaces. However, their original funding source withdrew unexpectedly, jeopardising the project.
The developer required £3.8 million to commence construction and fulfil contractual obligations with contractors and suppliers. Given the tight timeline and competitive Essex property market, traditional lending options were not viable.
Funding Solution
After assessing the project’s needs and potential, a bridging loan was identified as a suitable solution.
The loan package included:
- Loan value: £3,800,000
- Loan-to-Value (LTV): 70%
- Gross Development Value (GDV): £7,200,000
- Loan term: 18 months (12-month build, 6-month sales period)
The loan application process, involving RICS surveyors and construction specialists, was completed within three weeks.
Final Outcome
The bridging loan enabled the developer to:
- Begin construction on schedule
- Maintain relationships with contractors and suppliers
- Capitalise on market conditions
- Complete the development within the projected 12-month build time
The mixed-use development was completed on budget and ahead of schedule. All commercial units were let before completion, and 75% of the residential properties were sold off-plan.
This case study demonstrates how bridging loans can address time-sensitive property development needs in Essex. The developer overcame an unexpected funding issue and completed the project successfully.
The speed, flexibility, and support provided throughout the process were noted as beneficial factors. The ongoing input from development and construction experts contributed to the project’s success in a competitive property market.
Following this experience, the developer has confidently initiated plans for their next project in the region.
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