Applying to a lender for an agreement in principle means that you can see if you will qualify for the lending you need before making a full application. Having the funds agreed in principle will put you in a stronger position when it comes to negotiating with your vendor.
This refers to incidental costs that you may incur if you are purchasing land or buildings as part of your project, such as professional fees and stamp duty.
Borrowing short term finance via a bridge may be useful way to raise funds quickly whilst longer term development finance options are arranged.
This refers to the total build costs of the project.
This is a warranty given by a third party such as a contractor or professional consultant like an architect, to a third party with an interest in the project, e.g. the lender. Under the terms of the warranty the lender can sue to third party if they fail to comply with the terms of their professional appointment.
This is a detailed assessment which looks at the viability of any development project. It’s an essential tool when it comes to cash flow planning for the project.
This is a fee charged for managing and administering a project.
This is a planning tool to help you track income against expenditure so that you can plan your cash flow effectively over the life of the project.
This is undeveloped land that that is zoned so that it can be divided into smaller parcels of land under existing land use provisions.
Some councils offer a fast-track planning application process for a higher fee, which can be useful if planning is needed quickly for a project.
This is a measure of the market value of the development upon completion and is one of the most important metrics when considering a development project.
This refers to the valuation of a property based on the market value if the property were used in the most optimal way.
This is a house in multiple occupation, which is occupied by more than one household with shared facilities. The local council can advise if a property will require a licence as an HMO.
This is land where permanent works have been undertaken to increase its market value, such as installing drainage or roads.
Joint Contracts Tribunal offer a range of off the shelf contracts that you can purchase to use for a building contract with another party as part of your construction project.
This is land that a developer is holding onto for future developments or until it is profitable to sell on.
These are the costs associated with owning and maintaining land, e.g. Council Rates, service charges etc.
This involves gathering and analysing data to judge both supply and demand before embarking on a development project.
This refers to certain works and changes of use that can be carried out without applying for planning permission.
This is similar to a fast track planning application as a developer can agreed a timeframe and resource allocation for a planning application with the Council in exchange for an additional fee.
This refers to signing a contract to agree to purchase land or property that is yet to be developed. This is also referred to as selling off plan.
This is used as a way to value land that has development potential. It involves taking the costs of development and required profit away from the final value of the completed project, to give a maximum figure available for the land purchase.
This is a valuation that has been undertaken in line with the standards and procedures set out by the Royal Institution of Chartered Surveyors (RICS).
This type of credit facility allows a developer to draw down funds as and when they are needed. A commitment fee is paid upfront and then funds can be withdrawn in line with operational needs.
This refers to the graphical representation of the costs of a development project over time. Most projects incur less costs at the beginning and end of the project, with a steeper gradient in the middle, resulting in a S shaped curve if plotted on a graph.
This measures the speed of sales of a development, usually by units per month.
Stamp Duty Land Tax (SDLT) is payable when you buy land or property in England or Northern Ireland over a certain value. In Wales it is called Land Transaction Tax (LTT) and in Scotland it is called Land and Buildings Transaction Tax (LBTT). Buyers of second homes and buy-to-let investors also have to pay a 3% surcharge on top of normal stamp duty. You can calculate your stamp duty liabilities here using our stamp duty calculator.
Also known as undeveloped land or vacant land, this is land in its natural state that has not had any works or improvements made to it.
Last updated: 22 November 2023 | © KIS Bridging Loans 2024
