Developer receives further advance on new build flats
The client: A successful developer and businessman, with over ten years of experience in new build development. We have helped the client on several occasions already, allowing us to form a good working relationship.
The project: A new build block of eight flats, under construction next to a railway in North London. The block was planned to include three one-bedroom flats, one studio flat and four two-bedroom flats. The client originally purchased the land with his father in 2011, later receiving his father’s interest in the land by Deed of Gift. Upon completion of the project, the client intended to let the flats on Assured Shorthold Tenancies.
The finance: After we helped secure initial finance, the client was able to begin work on construction, with the project formally beginning in November 2014. However, he realised after just two months into the build that he would need additional funds to complete the project, as the price of the development contract rose. For this reason, the client returned to us to seek assistance in negotiating a further advance from his lender.
Despite having a good relationship with both client and lender, negotiations of this type require detailed information on the state of the project and how the additional funds will be used. We liaised with the client to provide the appropriate documentation and, once these were produced, secured the release of a further £194,000 within a month of the initial request, bringing the total loan facility to £1,128,000. A quantity surveyor had been appointed to oversee the development and provide a schedule of costs, with funds to be released based on this schedule.
The result: With additional finance secured, the client was able to complete the development after a further 13 months, with the project completing in May 2016. We then once again helped the client to secure finance, this time remortgaging the property onto a term mortgage so that the flats could be retained and let.