Client situation.
An experienced developer had built out a scheme of 14 three-storey terraced houses in Oldham, 11 of them 6-bedroom and 3 of them 8-bedroom. The houses were up, but the site was not finished.
The development facility behind the scheme was running down, leaving the developer with two things to fund at once, with a deadline to arrange funding by. The outgoing development lender had to be redeemed, and the works still live on site had to be paid for.
The security added to that. All 14 units sat on a single freehold title, so this was a whole site held as one asset rather than 14 individually saleable lots. The exit was the sale of the completed houses, and on a scheme this size, that runs unit by unit over a period rather than arriving as a single redemption event. The term had to accommodate a phased sale.
Our solution.
We structured a £1.6m gross facility at 46% LTV over a 12-month term. The scheme was built, vacant, and had a clear sale exit. The leverage was low against the value of the site. The real questions were how the facility would be structured, and how long the sales would take.
The facility did two jobs at once. It redeemed the outgoing development lender, and it released £68,000 towards the works still outstanding on site. The developer did not have to arrange two separate pieces of finance, or fund the remaining works out of their own cash before they could refinance.
The 12-month term was set against how the sale exit actually behaves. The houses in a 14-unit scheme will sell over months rather than on a single date, so the term gives the developer room to sell through rather than pushing them toward a single redemption point the site cannot support.
Result.
5 days from legal undertaking to completion, on a £1.6m facility secured against a 14-unit site with works still live on it.
Size and complexity are usually what slow a bridge down. This loan shows that Lakeshield’s processes can complete a large multi-unit development exit with outstanding works in days, and a developer facing a deadline on a scheme does not have to accept a slow process because the facility is large or because the security is a range of properties on a single title rather than a single property.