Build to Let Development Finance
Get the best development finance deal from award winning brokers ABC Finance.
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The build to rent market can be a profitable way to invest in property and is growing in popularity with property investors, property developers and even tenants.
New build schemes that are built with the intention of being retained by the developer and rented out provide multiple benefits over the traditional build to sell model.
Build to rent development finance
At ABC Finance, we offer build to rent development finance up to 70% loan to GDV. As a form of property development finance, it is used to fund property development projects.
We can consider projects around the UK and from both experienced and first time developers.
These loans are perfect for property developers and tenants alike and often see high quality, centrally located properties that provide strong yields from desirable housing.
What is build to let and how does it work?
Build to let is a business model for property developers that sees them build out new projects, which are then retained and let out to tenants.
Property development is a profitable business model, but isn’t always easy to manage from a cash flow perspective.
Build to rent gets around this by developing a strong cash flow trail from the rental income that is achieved on completed units.
This approach sees you slowly gain strong cash flow as you complete projects and rental income starts coming in. While you’ll see lower initial profits than if you sold the units, you retain the value in equity, that could be realised by selling later, you also gain strong cash flow.
How much can I borrow?
We can fund projects from £100,000 with no defined maximum loan size.
The amount you can borrow will depend on both the loan to GDV calculation and loan to cost.
We can fund up to 70% loan to GDV (gross development value) and 90% loan to cost (LTC).
Will I qualify?
We can fund almost any viable project. The following will be considered during the underwriting process:
Developer experience
We can fund build to rent development finance for both experienced and inexperienced developers.
We offer a range of first time developer finance products for first time builders.
Location
We can fund projects throughout the UK, whether in big cities such as London, Manchester, Birmingham, Liverpool or Bristol – right through to remote areas.
We can also fund projects in Scotland, Wales and Northern Ireland.
Scheme types
We can consider any type of residential build to let project.
For commercial projects, consider a commercial development finance facility.
Planning permission
All projects must have full planning in place, or outline with all conditions met.
Projects without planning in place can be funded using planning gain finance.
How does build to rent development finance work?
Build to rent development finance works by offering you an initial lump sum in order to purchase or release equity from the site.
From there, stage releases, which are pre-agreed to suit yourself and the lender are released as you hit agreed development milestones.
The stage release process continues until the units are complete and ready for rental. Once rented out, the facility is then refinanced on to a longer-term loan and the development finance facility repaid.
What other finance can you offer?
We can offer many related finance products for build to rent finance including:
- Bridging loans – A bridging loan can be used to complete the purchase of a site quickly, while waiting for your development finance application to complete.
- Development exit finance – Should you choose to sell the units, rather than let, a development exit finance facility can be used as a sales period loan.
- Buy to let mortgages – For completed build to rent schemes, a buy to let mortgage is used to refinance the properties in the longer term.
- Commercial mortgages – A commercial mortgage can be used to finance a commercial build to rent project on a long term basis once the units are let.
How do I get started?
To get started, get in touch today and we will manage your entire application for you.
We start by sourcing the best deal and can give you a detailed, written quote.
Once you’re happy with the figures, we work with you to make a formal submission to the chosen lender and work with the lender to meet all underwriting requirements. Get in touch now and get the best deal with ABC Finance.
