£3.5m Regulated Development Loan

Flexibility for borrowers over a self-build mortgage

Regulated development finance can offer greater flexibility for borrowers over a self-build mortgage, particularly for larger-scale constructions. Specialised property lenders offering regulated development finance often possess the experience necessary to provide solutions throughout the building process, assisting clients in overcoming challenges they are likely to encounter.

At Alternative Bridging Corporation, we recently finalised a £2.15m regulated development finance loan to support the demolition and construction of an 8,000 square foot luxury home in Northamptonshire. At the time of application, the property was valued at £850k, but its Gross Development Value upon completion of construction was projected to be a £3.5m Regulated Development Loan.

Constructing the Ideal Home with a £3.5m Regulated Development Loan

The clients had purchased the land with existing planning consent; however, they opted to redesign the entire property to construct their ideal home. This decision extended the process, and it became evident that the construction timeline would exceed 12 months, which is the maximum term for a regulated development loan. In light of this, the clients financed the initial stages of the build using their personal savings and commenced construction prior to our disbursal of funds to commence the 12-month loan term.

However, the borrowers had spent more than anticipated to reach the stage at which we were able to release the funds. Consequently, our Asset Manager liaised with them and their advisors and successfully increased the amount released upon completion. This reimbursement covered the overspent amount, improving their cashflow and ensuring the project continued at its intended pace.

Large Luxury Home Constructed within 12 months

Through close collaboration with the clients and their advisors and the identification of creative solutions to overcome obstacles in the build, Alternative Bridging successfully completed the construction of a large luxury home within a 12-month period, with the loan being repaid accordingly.

The client, Simon Pickering, who is Managing Director at technology firm DBFB, said: “The thing that really sets Alternative Bridging apart from other lenders is the genuine focus it puts on the personal service it delivers to clients. Working with the lender felt like a true partnership where both of us were striving for the best outcome. This meant we were able to take a flexible approach to overcoming challenges and identifying the best route forward. I have no doubt that this approach was a vital element to the successful completion of the build.”