Property Development UK Finance

By: Sean Horton

Property development UK finance can vary considerably depending on where you choose to go for the loan. Interest rates will depend on such factors as the project you are undertaking, the size of it and the individuals experience in the field. However you can also make savings if you choose to go with a broker rather than just taking finance from the high street lender. The reason for this is a broker will negotiate with lenders who they find by searching the whole of the market place.

Usually interest rates will vary somewhere between 1.5% and 2.5% as a rough guide. The cheapest end of the scale is secured through a brokers experience in negotiating with the lender and the dearest with a high street lender. The same will apply to how much you are able to get for property development UK finance funding. If you wish to get 100% then you will have to prove excellent credentials and records with past ventures. It can also help if you are willing to put up something as security against the loan such as another property. The majority of lenders are willing to offer around 70% to 80% when it comes to funding.

Depending on how big the project is you want property development UK finance for will depend on the term of the loan. Individuals can take out finance from 1 year to around 25 years and more. The bigger project that is likely to go on for many years will be taken over a long term. If this happens then the lender will usually propose an interest only loan. This means that throughout the term of the loan the repayments you make will only be taken off the interest that accumulates on the loan. However upon completion the capitol will have to be repaid and the lender will expect you to repay this in a lump sum. The majority of lenders will ask for proof you have the means of doing so.

Before you get to the stage of finding a suitable loan it is imperative that you make sure you have the relevant planning permission. Approaching a lender without the proper documentation will almost certainly mean your loan application will be denied. This will result in a lot of wasted time and energy on both yours and the broker's part.

The cheapest and best deal for property development UK finance are always found by taking on the help of a broker. However you should read the terms and conditions of any loan you are considering before actually signing on the bottom line. There can be additional costs associated with any loan particularly if you take out a fixed rate of interest and this is where you can find them. The terms and conditions will relate to how much the total loan will cost, how long it is taken over and the total amount of interest that the loan will accumulate. In the case of an interest only loan it will also state how much you will have to pay in full upon completion.

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