Coronavirus COVID-19 Update!

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Alan Andrews
Alan Andrews
Commercial Consultant
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Development Finance and Covid19 Lending Changes

Up to date Development Finance Changes due to the Coronavirus

Our advisors are now working from home and we are still open 7 days a week.

 

The Coronavirus is unfortunately making things difficult for the development finance market:

  • Maximum lending is down a little, from 70% to 60% LTV based on the Gross Development Value.
  • For existing facilities releasing drawdown funds has been complicated mainly due to many surveyors not working, and delays getting building regulations signed off due to the added difficulty in arranging site inspections.
  • It is taking longer than anticipated to finish projects, due to building sites being locked down or progressing more slowly.

 

Some lenders are looking at ways to work around these difficulties and continue funding, such as:

  • Rather than relying on surveyors, some lenders are relying on obtaining receipts for materials and photographs of work completed, in order to release drawdown funds.
  • Relying on desktop valuations or drive by valuations where possible.
  • Utilising technology, including video site tours and photography, to undertake viewings and ascertain site progress.
  • Electronically signing documents without the need for wet signatures.
  • Meeting solicitors via skype and teleconferencing.
  • Where there are temporary difficulties completing new facilities, we can continue the application ready for when life starts getting back to normal.

 

We are able to help with delayed projects in a number of ways, including:

  • If you are approaching the end of a finance facility and expect delays in selling the development, we can look at developer exit finance to find a cheaper deal and a longer term in order to provide extra time and reduce finance costs.
  • Struggling to sell units? Rent them out and consider selling later. We have some excellent deals on Buy To Let products, fixed rates available from 2% per annum.
  • Need extra funds? Replace your existing facility with a new one, whilst raising funds for your next project or to finish an existing one.