Residential Development
The Case
An established property developer required finance to purchase
a site for residential development. The land price was £500,000 and Detailed Planning
Permission had been obtained. Build costs were £229,000 and the end value of the
development was £1.5m. The profit of £771,000 equated to 105% of the development
cost. The client required the maximum advance.
The Solution
A mortgage was arranged for £729,000 i.e. 100% of purchase
price and all costs. The interest rate was agreed at 3.0% over bank base rate,
with an arrangement fee of 1.5% added to the loan. No exit penalty was payable.
Introducer Commission
Commission of £3645 was paid to the introducer.