Top 10 Finance Ltd, Development Finance Rex House 4-12 Regent Street London SW1Y 4PE Santander
Santander Property Development Finance Santander is a british bank owned by Santander bank a spanish banking group, they a predominantly a retail bank dealing with personal customers although they do have a business banking department that could offer property development finance, as with all retail banks commercial lending is secondary to their core business, what you will find with most high street lenders is that their criteria for development finance are very strict this is due to the fact that property development finance is considered risky lending and as such they are very cautious as to who they will lend to, in the first instance you will need to be an existing client or have some form of banking history with them, banks tend to go up to 50-60% loan to value for Santander Development Loans and many want your contribution in to the deal at first drawdown, so this tends to tie your cash up until the project is finished, they will also only lend to experienced property developers with a number of previous projects that have completed, they would want to see that you are capable of delivering the project within the agreed budget, in time and that you have successfully sold the properties at a profit, this profit would need to be at least 20-25% of the end value, if you have no previous or little experience of property development then it is highly unlikely that funding would be offered.
Santander Property Development Finance would also come with the following costs along with the Interest payments agreed, Interest would be on an annual basis and is always and is added to the loan unlike a normal loan interest payments are not made on a monthly basis you will only ever pay interest when you redeem the loan at this point the bank will calculate the interest based on the days the loan was outstanding and deduct it when you pay them back from the sale of the properties, with a high street bank you can expect to pay between 4 and 7% pa although they will also expect you to pay a commitment fee of around 2% of the loan amount that is agreed and they will also expect you to pay an exit fee this can be as much as 2% and unlike the commitment fee it is not calculated on the loan amount but the end value of the development so although it seems you are getting a low-interest rate when taking into account the exit fees charged it can all add up so you need to look at the overall picture and not just the rate of interest you will be paying.
Also you will have to pay a surveyor to look at the project the surveyor will be appointed by the bank and will produce a report on the feasibility of the project including end value of the properties you are developing sales prospects, the value of the site at purchase time and also go through your construction budget to check that you can build the project out within your agreed budget.
The bank will also appoint their own solicitors to check the title and see if there are any restrictive covenants on the site that could hinder the final sale of the properties, note you will have to pay for the bank's solicitors as well as your own legal fees.
Santander Property Development Finance.
If you cannot get Santander Property Development Finance there are other options still available to you Target Mortgages work with many more lenders who offer this type of finance, they also offer very competitive rates of interest and will also make loans available to first time developers, they also offer far more cash on day one in fact up to 90% of all of your costs is available, and you will not be expected to put all of your cash in on day one, interest rates are slightly higher at 6-9 % but you then have to factor in that they will not be asking you to pay an exit fee of 2% of the gross development value, so when looking at the whole picture of Santander Development Finance.rather than just interest rates they become far more competitive, they are also far more relaxed about what and who they will lend to, so it’s not just about the overall cost but the ease of doing business this is why so many developers are turning to specialist lenders for their Santander Development Finance.
A Santander Development Loan or specialist Lender.
Target Mortgages have been arranging development finance for many years and are well placed to get you the best rates and deals in the market.
You can call us anytime to discuss your project contact us via our chat or website contact form, we will go through your project in detail and get you the best deals on the market our number is 0800 138 6001.
A Santander Development Loan is not Authorised or FCA regulated unless you intend to live in the property.