Bridging Finance Solutions (BFS) has finalised a short term finance agreement for £634,000 with a private developer and repeat BFS business customer.
Under the deal, the developer has completed a deal to buy a large detached house in Wirral with scope to build a second home on the existing grounds. As part of the agreement with the homeowner, the client will demolish and rebuild a new home on the site, carrying out all planning and approval works prior to completion of the deal.
Once the deal was completed the site was acquired by the developer’s building company with whom the homeowner entered a formal demolition and new build contract.
The homeowner will then use the proceeds from the sale of the plot to fund the build whilst BFS bridging finance was secured to fund the purchase of the plot and the building of the second house.
The client explained: “I’ve been developing property for several years now and understand the complexities and challenges that we face and so am constantly looking at new and innovative ways to ‘unlock’ deals. In several instances, as is the case here, bridging finance has undoubtedly provided the ‘key’ that has enabled us to move forward.”
Interest in the development has been such that three other homeowners have approached the developer with a view to developing their own homes and land in a similar way.
The developer added: “This is a different way to approach development but one that works incredibly well for both the homeowner and us. Essentially, the homeowner will benefit by securing a new modern, energy efficient home on the site of his existing home, with our building company carry out construction works, whilst our development company secure a plot on which to build a second home.”
The developer has borrowed a total of £634,000 from BFS, combining the cost of the purchase of the land and the new build of the second home. Upon completion the second home is expected to be valued in excess of £1 million.
Steve Barber, managing director of BFS, said: “The client is an incredibly savvy and smart builder and developer who recognises and understands the versatility and flexibility of bridging.
“We have once again worked with him to finance his latest development which is now well underway and set for completion at the beginning of 2019.”