Almost Completed Development Site Overruns Current Loan

Our clients were almost finished; wind and watertight, the development site had overrun the loan term and, as such, had been repossessed by the current bridging/development lender and was now in the hands of the receiver.

The receiver was looking for an early auction sale to recoup the current lender’s loan, but our client wanted to salvage the situation in the best way possible. As he had given a personal guarantee for repayment of the loan, our client’s previously good credit history was now under serious threat, and he believed that once it became public knowledge that the site was a repossession, the profit available within the site would no doubt be reduced or eradicated by the receivers achieved sale price and mounting costs.

Our client wanted to buy back the site and, as such, contacted UK Property Finance following a recommendation from a developer contact who had used our services in the past. An advisor spoke to our client in depth, but due to the lack of equity available within the site, additional security was required to enable the purchase and to complete the remaining works.

The sister of the client offered her residential property as security, although she already had a mortgage secured on the property. We obtained a finance agreement in both names to repay the current bridging and development finance with a bridging loan secured via a first charge across the development site and a second charge on the sister residential property.

The funds were quickly in place, preventing the auctioning of the site and extra receiver charges, and the additional money was raised to complete the build. Once complete, our client had plenty of time to sell the properties in a controlled fashion and, as such, maximise his return to repay the new loan and release the charge over the sisters’ property.

The sister would also receive a bonus for helping her brother out of a very difficult situation.
UK Property Finance is highly skilled in sorting complex cases and has access to any lender in the market. We very carefully choose the right funder, as every deal is different.

The chosen lender in this case was formed to tackle deals of this nature and offered a highly competitive rate of interest. UK Property Finance and our client were on a tight deadline to avoid the loss of the development site, and our strong lender and solicitor relationships ensured a positive outcome.