If you are considering developing a property you should be mindful that from the moment the site is purchased, time is money. Here’s our top tips for approaching your project to ensure you reap the benefits:

1. Planning

Speak to the planners and follow their recommendations.  A great deal of time and cost can be lost over months, or years, of argument and compromise. A planner’s job is to ensure that your project meets local and building regulations as well as monitor its impact on the environment and local community.  They are there to work with you and guide you through the approval process, so listen to what they have to say.

2. Choice of Lender

Choice of lender is essential.  Don’t be fooled into thinking cheaper rates mean cheaper finance and quite often the bigger the lender the more prevalent the red tape!  The quicker you can talk to the decision maker on the credit committee the better.  The qualitative benefits of a lender with professional advisors who are responsive and commercial cannot be undervalued.

3. Choice of Contractor

Make sure you take a close look at your proposed contractor’s track record. Are they good at delivering on time and on budget? Be aware of the contractor that doesn’t like spreadsheets or is slow at supplying financial data – if you can’t measure it you can’t manage it.  The lender will spend as much time doing due diligence on the contractor as the borrower, and whilst a lender might benefit from a small overrun in additional interest earned, they would much rather the developer repaid the loan before the default date. 

4. Planning Conditions, Warranties and Building Regulations

A new mortgage provider or purchaser’s solicitors will need confirmation that all the planning conditions have been met and warranties are in place. So, make sure these are all managed and in place by the time construction is completed.  Funding costs are at their highest at this stage of the project and any unnecessary delays will cost you more money.

5. Sell, Keep, Stick or Refinance

Think ahead and don’t prevaricate over refinancing.  Negotiate!  If the legal conveyancing of the complete project is taking months, every month of delay will cost you additional fees and interest at a higher rate. Line up a broker to provide mortgage funding for your completed units or negotiate a reduced interest rate with your development funder for the finished units.

In summary, choose your team carefully. Don’t be blinded by price and rate, think ahead and work with the professionals around you, they all want your project to be a success.

RQ Capital is a specialist property development lender who has 70% of borrowers as returning customers. You connect direct with our decision makers who take the time to understand your vision and offer the loan to fit your development project. We believe in honest, transparent communication and building long term business relationships.

Call us today if we can help with financing your property development project.