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100% of build costs for newly formed limited company

The Clients: A recently established limited company whose directors are full-time city traders. The pair were looking to enter the property development market, with a focus on building and converting residential units for resale.

Prior to approaching Mortgages for Business, the business partners had undertaken a refurbishment project and started the development of a new build house. Both projects had been financed using cash savings.

Only half way through their first new build development, the pair had purchased another piece of land which they wished to develop on. Keen not eat into any more of their savings, the pair were now looking for finance to cover the cost of the build.

The Project: The directors had purchased a plot of land in a popular commuter village in Kent. The site forms part of a large garden to the side of a detached house. The current owners had split the garden and decided to sell part of it on.

The plan was to build a three-bed detached bungalow on the land. The bungalow would have its own access and parking and follow a similar style to neighbouring properties.

Once complete, the directors plan to sell the property to repay the development loan.

The Finance: The developers were looking for a loan to cover 100% of the build costs. The land itself had been bought outright.

The Application Process: We approached a high street lender which has offered our developer clients loans to cover 100% of the build costs in the past.

The business partners provided us with a portfolio of their previous work and planning permission for the proposed build. We worked together to package this alongside a business plan which included details of materials, landscaping, a timetable and breakdown of costs.

We accompanied the clients to meet with the lending manager to discuss the project. Happy with the plans made, the lender agreed that the project did not require an individual monitoring surveyor which helped keep down the cost of development.

After a full valuation of the land and review of the predicted costs for the project the underwriters were happy that the development would be accomplished in the allocated 18 months completion time and offered the client the full loan required.

Property Details

Site value:

Before works: £165,000

After works: £475,000

Loan amount:

Build costs: £215,000

LTV: 44%

5% (Variable 4.5% plus Bank Base rate currently at 0.5%)

18 months

Lender arrangement fee:
£3150 (1.5% of loan amount and 1.5% of loan amount on exit)

Mortgage payment:
Nil pcm – interest rolled up to be paid at the end of the term (or on sale/refinance of site)

Consultant: Paul Keddy, 01732 471655


Have you got plans to develop and build your own property? Call us today to see how we can assist with your project funding on 0345 345 6788


Mortgages for Business Ltd is registered
in England and Wales No. 2502713.

Registered office:
17 Kings Hill Avenue,
Kings Hill, West Malling,
ME19 4UA.

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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.