How Much Can I Borrow?
We are able to bridge against land at up to 65% loan to value (LTV), and can even lend up to 100% LTV with additional security. We can fund loans between £25,000, with no maximum loan size.
How Much Will It Cost?
This depends on a number of factors such as where the land is, what it is used for and whether or not it has the relevant planning permission for the intended use.
If the land has the relevant planning permission to build on and the location is deemed to be good you could expect to pay a rate of around 0.95% per month. If the land has no planning and the location is less desirable, 1.25%-1.5% per month is realistic.
In addition to the monthly interest cost, lenders charge a lender arrangement fee – a fee for setting up the loan. This fee is usually between 1.5% and 2% of the loan amount, although this is sometimes discounted as low as 1%, especially on larger loans.
How Quickly Can I Complete?
If the loan is for land acquisition and none of the legal work has begun, 14 days is realistic. If you are looking to release equity from land and a valuation is needed, you could expect funds in seven days of full lender application. The less work needed the quicker you can expect to complete.
Do You Offer Loans Against Land Without Planning Permission?
Yes, we can offer finance whether planning permission is in place or not. Although the process may be slightly different, borrowing is still usually achievable.
Land Bridging Loan Uses
There are numerous reasons why people choose to take out this type of borrowing against land. Some of the more common reasons are as follows:
- To complete the purchase of a piece of land quickly.
- To raise capital needed to use elsewhere.
- To fund a planning application, allowing the land to ultimately be developed.
How Is My Application Assessed?
Although your personal circumstances will be checked when looking to make a new application, they aren’t the whole story. Lenders will look at the following info about you:
- What your current financial situation is.
- What you’re planning to do with the funds raised and how this might affect your finances.
- Can you keep up the repayments, if paying the interest monthly.
- Your credit history may be taken into consideration by some lenders.
- Your experience in this type of transaction.
In addition, the lender will look at the security offered. The key questions here will be:
- Is the land suitable security?
- What is the value of the land?
- What is the exit strategy and is it realistic?
- Does the land have planning permission?
Will I Be Eligible for A Land Bridge Loan?
Although you will be subject to the above criteria points with most lenders, we can offer funding to most applicants, as long as the loan to value is acceptable.
Issues such as previous credit problems, lack of experience or a low net worth can reduce your choice of lenders, but there are still usually options.
Who Can Take Out A Land Bridging Loan?
We can offer finance against land to a range of borrowers, including:
- Offshore companies
- Limited companies
- LLP / other company structures
- Pension funds (where the pension fund is allowed to borrow money)
What Are Acceptable Exit Strategies?
As mentioned above, the exit strategy is up there with loan to value for the most important factors in assessing a land bridging loan.
There are some common methods of repaying land bridging finance are:
- Sale of the land after planning has been granted.
- Refinance to a self-build mortgage or property development finance.
- Refinance to a commercial mortgage (depending on the use of the land).