Lender enabled site to be acquired below market value while funding 86% of purchase price
Our client is an experienced property developer who actively seek properties that are being sold below market value. They sourced a site in North London where the prior sale had fallen through due to market volatility, leading to the vendor selling for a discount to our client.
Our client sought the maximum Day 1 loan possible to fund a purchase price of £750,000, being £175,000 below market value. With most lenders typically lending 70/75% against the lower of purchase price or market value, a higher market value is normally of no benefit for the finance transaction.
Our specialists were able to source a specialist development lender to fund 86% of the purchase price/75% of the market value, releasing the maximum Day 1 loan to the customer. The lender is also funding 100% of the construction costs. With this structure we were able to greatly improve our client’s working capital and stretch standard loan to value thresholds.