BFS property development finance facility has been secured by private investors developing a 24 unit new build housing scheme in Ebbw Vale, mid-Wales.
The development firm is owned and operated by a husband and wife team who are investing cash reserves from their successful external wall insulation business into property development. Following a number of successful schemes they have taken on this larger development, totalling 24 houses.
BFS provided a £321,000 property development finance loan to kickstart the build of the first three houses. The funds will be given in three drawdowns. The client will then sell these properties on and move onto the next three homes in a small phased approach. The property development finance loan allowed the client to begin construction works, utilising an existing unencumbered development to secure the loan.
Keith Litherland, Business Development Manager at Bridging Finance Solutions commented: “This has been an interesting scheme in terms of the way that the property was acquired and the loan was secured. Property development finance loans are designed to offer flexibility and consider all aspects of the broader project and the client’s ability to service the loan. More and more developers are understanding the potential and scope of this type of loan – I believe that’s why we are seeing demand for this particular product escalate.”
The scheme in Ebbw Vale was acquired at auction from receivers from the original developer. The site benefitted from planning consent for 36 properties, 12 of which had been built prior to insolvency. In addition to building and selling the first phase of 12 units, they also installed all services to each plot and fully laid the on-site road with work ready to begin on the remaining 24 homes
The build is currently at slab level with all current work to date funded from the client’s own resources. The current site value sits in the region of £1m in its current condition with an estimated GDV of £4.1m.
Keith continued: “We’re about to release the first stage of funds at which point construction work will begin and the next phase completed. We look forward to working with and supporting the client not just through this initial phase but onwards to the completion of the development.”
View prices at Milfraen View for the initial 12 properties here
Current 3 x 3 storey houses being constructed (Right hand side), to the right is the coach house (three garages with flats above)
Left side of current construction plus land to be developed, looking from point 1 to 2 on the map, left side of fence.
Looking down the Road from point 1 to point 4, far house on left is a 3 x 3 storey property, which is the same as our security currently under construction.
View of signage to the fence behind point 2.
Looking from point 2 to point three, with new construction on the rights.
31 Milfraen View sold for £148,000 in February 2019
