Construction Finance

Construction finance loans allow you to borrow up to £2 million towards a construction project of your choice.

Whether you are a homeowner looking to renovate your existing home or a developer looking to add value to a new or existing residential or commercial property, we can help find the product to suit your requirements. Having the right finance in place can give you peace of mind that you can purchase the land, materials and labour effectively and allow for your project to run smoothly.

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What is Construction Finance Used For?

The loans we facilitate can be contribute towards the following costs:

  • Light refurbishments (kitchens, lofts, home offices)
  • Heavy refurbishments (basements, renovations)
  • Land costs
  • Labour costs (builders and contractors)
  • Build costs (interiors and materials)
  • Insurance
  • Design and architects
  • Legal fees
  • Planning permission

A construction project can add a lot of value to an existing or new development project. For instance, loft conversions alone can add up to 20% to the value of the property and basements as much as 30%. Perhaps you are a homeowner looking to increase your living space for you and your family or maybe you are an investor or established property developer looking to grow your portfolio. Using our construction loans, you can transform an empty plot of land or rebuild an existing home or flat. Once completed, you can generate income by renting it out to the local public, through buy to let or sell the house for a higher value than you bought it.

The Terms of Our Construction Loans

Based on the construction lenders that we work with; applicants can typically borrow between £50,000 to £2 million with an average duration of 12 months to repay. The amount you borrow is broken down into:

  • 100% of construction costs for new builds or conversions
  • 50% of the land or property price
  • up to 50% of the Gross Development Value (GDV) – this is the market value of the property once all renovations have been completed.

If your application has been successful, the money will usually be transferred to you in stages. This is intended to help you manage your cash flow better and not spending it all at once. By receiving the funds in small amounts, you are able to plan accordingly, using the money to purchase the land and pay contractors and maintain control of your financial position.

In terms of repayment, it is common to roll up the interest and only pay when the loan term is complete. The construction lenders we work with can also offer alternative repayment structures such as making equal monthly repayments, interest deducted and they allow early repayment if you find that you are in a financial position to repay early. You can simply contact the lender you are working with to clear your account, however, there may be a small fee for doing so.

See also development finance.

Types of Construction Finance For Property Development

Light construction involves changing the interior and not making drastic changes to the outside of the building such as adding a new kitchen, interior design, bathrooms and living spaces. Heavy construction involves far more work and adjustments to the exterior of the property such as loft conversions, new floors or turning a house into flats. Our partners are able to accommodate all kinds of construction purposes and are experienced to answer any enquiries and questions you may have.