Case study: Dudley
Project completed: January 2020
A very experienced developer purchased a property and also the adjoining unoccupied land with the view to create a number of ground-up developments on the land. The developer had experience with constructing ground up projects having built numerous other residential properties within his portfolio.
Planning application was submitted to construct 4 x 3 bedroom properties which would also include off-road parking facilities. Located within the in-demand area of Netherton in Dudley, the properties will benefit from close proximity to a range of amenities and very good motorway links to Birmingham and the rest of the UK.
Initially the adjoining car park was not owned by the developer but on transacting on this with his own funds to progress the project he then required a development loan from Mint Bridging to fund the works. The developer had their contractors in place with a budget outlining their ambitious schedule of works and all costs which they expressed were achievable. The developer was looking to construct the properties within 12 months, all of which were to be finished to a good standard ready for sale at loan exit.
With the track record of the developer being excellent we were able to provide a loan of £560,000 for the development of the project over a 12 month term with a first charge on the land and the developer’s residential property. Mint Bridging included a contingency within the loan which was to be separated equally amongst each of the development drawdowns should this be needed. Also included in the facility was additional time at the end of their expected completion date in order to provide time for the sale of the properties
The developer did achieve their completion date goal and also had sales agreed on all four properties prior to the project finishing. The properties were delivered to a high standard and all achieved an asking price above the expected pre-completion market value.
There was an unforeseen issue with the new purchasers all buying under the “Help-to-Buy scheme”, this meant the developer did see completion times far longer than expected. Mint Bridging was able to work with the developer to extend the loan giving capital reductions as the sales happened, this reduced risk as the sales completed for the remaining period prior to the exit.
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