Two years ago, property developers would have been obtaining planning permission to build out flats and houses – confident in the knowledge that in a buoyant market, prices would continue to rise and yields increase!
At the beginning of 2019 we had several highly regarded developers come to us with a particular challenge.
They had completed their development projects and were now duly expected to sell and repay their short-term development creditors.
Unfortunately, the market had subsequently slowed considerably, with a negative impact on prices due in some part at least to the uncertainty over Brexit!
The developers had a contractual liability to repay their short-term finance but sales were slow. They therefore had two choices;
1. Sell at a loss
2. Retain the properties to let and re-finance onto a long-term mortgage so that they could clear their short-term liability
At our clients instruction, we have been successful in refinancing several newly built properties which had been let, to enable the developer to retain the ownership and use the rental income to cover the cost of their new long-term mortgage. We have also been able to raise additional surplus funds to be used for the developers next project.
This has allowed the developer to retain the properties with no pressure to sell enabling them to then review their sales strategy once market conditions improve.
If you are a developer who has this particular problem please come and discuss your requirements with us. We can also assist with your new short-term development finance requirements.
Please call Kevin Beck on 01322 558089 or email kevin@fleet-finance.co.uk https://www.fleet-finance.co.uk/. We offer a totally confidential initial free meeting to impartially assess your needs and circumstances before mutually agreeing the best way forward.