Property Development Finance

Silver Oak Capital:- Property Development Finance

We were approached by a CEO of a London based Wealth Management firm who needed assistance in acquiring a residential development loan in order to completely demolish and rebuild his primary residence located in Surrey. He had obtained full planning to build his dream home on the site and had made arrangements to rent an adjacent property for a period of 18 months during the build period. The build cost amounted to £2 million.

Client Circumstances

The client had little to no experience in residential property development but had appointed a strong team of architects and contractors to handle the project. As the client had a strong regular income stream via his business he requested that we structure a loan where the interest could be rolled up during the construction period – and subsequently refinance on to regular interest only mortgage facility thereafter.

Problems To Solve

Finding a development finance loan that flipped on to a regular residential mortgage would prove challenging with conventional development lenders as they tend to only operate in the short term market. This called for a creative approach from our team – we henc approached a London-based private bank to structure a deal that would fit this client’s circumstances.

Solution Provided

We were able to secure a cheap residential development facility and place the client with a reputable private bank which allowed him to flip the construction loan on to a regular interest only residential mortgage (5 year term) following practical completion of the build. Residential Development Finance Facility £2 million (Net) 70% Loan to Value (85% Loan to Cost) Fixed Rate 4.5% per annum Term 18 months Interest Rolled Up No AUM Requiremnt