ASK THE EXPERT: DEVELOPMENT FINANCE 35
BuildStore helps clients present their case so lenders can take a balanced view.
HOW DOES DEVELOPMENT FINANCE FIT INTO THE CUSTOM-BUILD END OF THINGS?
rather than a risk. Our role is to guide developers through those challenges, structure the funding appropriately, and provide the reassurance that the fi nance supports, rather than hinders, the project’s success.
WHAT SUPPORT DOES BUILDSTORE PROVIDE TO DEVELOPERS OR CLIENTS SEEKING SHORT-TERM FUNDING? BuildStore helps developers by: • Accessing specialist lenders: As independent advisors we have access to all of the lenders and products on the market. This allows us to ensure that the developer has access to the right solution every time.
• Tailoring solutions: Ensuring products match the borrower’s project size, timescale, and repayment strategy.
• Guidance & structuring: Helping clients present a strong case to lenders, covering budgets, valuations, and exit plans.
• Ongoing support: We’re not just about the loan approval; we stay engaged through drawdowns, build progress, and refi nancing needs.
• Experience: With over 25 years in the self-build and development fi nance market, and more than 30,000 projects successfully delivered across the UK, BuildStore has unrivalled insight into the challenges and opportunities developers face. This depth of experience means we don’t just arrange funding, we anticipate potential hurdles, structure deals that work in practice, and provide developers and clients with the confi dence that their project is backed by proven expertise.
WHY IS TRANSPARENCY IMPORTANT FOR DEVELOPER CUSTOMERS? Transparency builds trust. Developers want certainty about fees, rates, and
conditions before they commit. By being upfront, BuildStore helps clients budget effectively and avoid unpleasant surprises; especially critical when profi t margins on developments can be tight.
THERE’S A PERCEPTION THAT BRIDGING AND DEVELOPMENT FINANCE IS EXPENSIVE – IS THAT REALLY THE CASE? While the rates are higher than traditional long-term mortgages, that’s because these products are short-term and higher risk for lenders. But expensive is relative: • If structured correctly, fi nance is just a project cost – factored into overall profi tability.
• Competition among lenders has driven down costs in recent years.
• Speed and fl exibility often outweigh the slightly higher interest rates when opportunities would otherwise be lost.
DO YOU NEED TO HAVE A CERTAIN LEVEL OF INCOME AS A FIRM TO QUALIFY FOR DEVELOPMENT OR BRIDGING FINANCE? Unlike residential mortgages, development and bridging fi nance are assessed less on personal income and more on: • project viability; • experience of the borrower or team; • strength of the exit strategy.
Even fi rst-time developers can access fi nance if the project is well-structured and supported by professionals.
WHAT IF I HAVE A HISTORY OF ADVERSE CREDIT – DOES THAT RULE ME OUT? Adverse credit doesn’t automatically exclude a borrower. Lenders will look at: • How recent and severe the issues were;
• Evidence of recovery and current fi nancial managementī
• The overall project proposition and exit route.
WWW.HBDONLINE.CO.UK
Custom build projects are unique because they require two distinct layers of funding. The fi rst stage is development fi nance, which covers land acquisition, infrastructure, and site preparation – often delivered as serviced plots, “golden brick,” or shell schemes. At this stage, BuildStore works hand in hand with development lenders to structure funding that gives developers the capital and fl exibility needed to bring sites to market. Once the plots are ready, we manage the transition into the custom build stage-payment mortgage process, which fi nances the construction of each individual home for the buyer. By bridging these two funding stages, we can deliver a seamless handover: developers are able to service their sites with confi dence, while buyers benefi t from a proven mortgage route to complete their homes. Crucially, BuildStore also establishes a dedicated lender panel for each custom build development. This ensures that, before a site goes live, a group of lenders is already in place and committed to supporting it. This joined-up approach not only reassures developers and buyers but also makes projects more attractive to lenders, de-risks delivery, and underpins fi nancial viability from the fi rst spade in the ground through to the fi nished home.
Tom McSherry is national business development manager at Buildstore
To listen to the full podcast and hear more about developers’ options for bridging and development fi nance, visit insights.
netmagmedia.co.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92
