Backing An Experienced Builder To Deliver A 12 Unit Development

The Client

An experienced builder and construction company owner with a long career delivering
projects for private clients was ready to take on a much larger development of his own.
Having successfully completed several smaller developments, including property
conversions, he identified an opportunity to build a 12-unit residential scheme, acting as both
the developer and principal contractor.

The Challenge

Although the client had extensive construction experience, this was a significant step up in
project size. Many development finance lenders were reluctant to support the scheme
because there was no external contractor appointed under a JCT building contract, with the
client intending to manage and deliver the build through his own construction company. In
addition, the client required a high level of gearing against the completed development value
to make the project commercially viable. During underwriting, the lender's Quantity Surveyor
also assessed the build costs higher than the client's original budget, creating further
pressure on the funding structure.

The Solution

We identified a specialist development finance lender that was comfortable supporting an
experienced developer acting as the principal contractor without the need for an external
JCT contract. We structured a development facility that provided a high level of funding
against the projects gross development value and strengthened the overall package by
arranging additional security against the client's existing buy-to-let portfolio. When the
Quantity Surveyors assessment exceeded the client's projected build costs, we worked
closely with both the lender and the QS to negotiate a pragmatic compromise, reducing the
funding gap and ensuring the project remained viable.

The Outcome

The client secured the funding required to commence the 12-unit development while
retaining control of the build through their own construction company. By overcoming
concerns around contractor structure, additional security and build cost assumptions, we
enabled the client to progress their largest development to date, marking a significant
milestone in the growth of their property development business.

Lender: Nextius Capital
Current Estimated Value: £1,600,000
Gross Development Value (GDV): £4,00,000
Total Facility: £2,800,000

Please note: This case study is based on a genuine client scenario. To protect client confidentiality, specific figures, dates and other identifying details have been amended. The circumstances, solution and overall outcome remain accurate.