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Residential Development Finance

Residential development finance is now much more complex than it used to be. The world has changed, so now more than ever you will find our services of great benefit in your search for the finance you need.

Lenders have withdrawn from the market, and for those who remain their lending terms are now stricter and much more expensive. An experienced broker like Monyy is your ideal partner to help you pick your way through this changed landscape.

Whatever your residential development finance needs are we will listen carefully to you and make sure that the advice and product we recommend is suitable to your circumstances.

Monyy Property Finance is a proficient residential development finance and commercial finance broker that endeavours to obtain the most appropriate lending for you. We have great connections with many lenders, main stream, second tier and equity investors enabling us to get the best deal for you.

When lenders won't lend

But, not every deal will find a lender. Many deals are outside lending criteria and cannot therefore proceed. If your proposal falls down don't worry, we may still be able to help. We will put your proposal on to our Opportunities and Deals notice board and hope to attract the missing ingredient that will then allow the provision of senior debt.

100% Residential Development Finance

We get a lot of enquiries for this. If you're an experienced residential developer in search of 100% residential development finance for that next great project, we may be able to find it for you. But it's unlikely. You should think in terms of 90% and the criteria are stricter than ever.

There are now very few players in this 100% residential development finance market, some of the well known ones have either withdrawn or disappeared. It's now much more likely that 90% will become the maximum, based on 65% senior debt + 25% mezzanine finance leaving you to find 10% of total costs in cash, not other property.

But this is still a great product. It gives you gearing of 9:1 for every £1 you bring. With £200,000 cash you can do a deal with total costs of £2m and expect to make £400k profit, to be shared between you and your mezzanine lender. With £500,000 cash the deal could be £5m in total costs with £1m in profit. It's a great way to grow a business - if you can find the right opportunities.

Who is left? What are they looking for? Take a look at the lending criteria below:

• You are an experienced house builder/contractor
• You have up to 10% of total costs in cash if required
• You're prepared to give a personal guarantee or cross-company guarantee between 5% - 10% of Total Costs
• GDV minimum £1.5m, maximum GDV £12m
• Well located and in England and Wales only
• Proven demand for house types, and at the prices declared in your Project Appraisal
• Not holiday homes. Not apartments
• Multiunit proposal.
• The 'rate of sale' in your Project Appraisal is achievable
• Borrowings + interest to be repaid within 18 months maximum
• Full planning permission is or will be achieved imminently
• EBITDA on Total Costs 20% minimum

Finance terms vary wildly and as brokers we can compare the different funding packages and then help you decide which is right for you. Raising 90% - 100% residential development finance is an experts market. We usually arrange the whole package, combining senior debt and mezzanine finance together for greater security and control.

When mezzanine lenders won't lend, we may be able to introduce private investors willing to share in the deal with you. Please take a look at Opportunities and Deals. Click here.