Capital Raised From Second Fix Development To Secure New Site Purchase

The Clients:

An experienced property developer approached us seeking funding to secure a new development opportunity. The client operates a substantial residential portfolio and regularly undertakes ground-up new build projects.

They had identified a new land acquisition but did not intend to begin construction immediately, as an existing scheme was still under construction. The strategy was to secure the land now and arrange a longer-term development facility once the current project had completed.

To proceed, the client needed to release capital from an ongoing development without waiting for practical completion or sale.

The Challenge:

The key complexity was that the existing development had only reached second-fix stage.

While the projected Gross Development Value (GDV) was approximately £4.5m, the current value at that point in construction was closer to £3.5m. This meant a traditional refinance or development exit facility was not available, as most lenders require practical completion, sign-off, or a sale before considering lending.

In addition, the client required a net £2m capital raise to secure the new site quickly. Timing was critical and delaying funding risked losing the land opportunity.

The case therefore required:

• Funding against a part-completed development

• Equity release prior to completion

• A short-term holding solution for the new site

• A clear refinance strategy once works completed

Many lenders are reluctant to lend where a property is mid-construction, particularly when funds are being raised for onward acquisition rather than completion of the build itself.

The Solution:

We sourced a specialist bridging lender comfortable lending against a partially completed development and structured a short-term refinance facility secured against the existing scheme.

The agreed facility was structured as follows:

• Loan amount: £2,000,000 

• Term: 12 months 

• Interest rate: 1.01% per month (retained) 

• Retained interest: £242,400 

• Net advance: £1,726,664 

• Security: Part-completed residential development

By evidencing the developer’s track record, build programme and refinance exit onto a development facility at practical completion, we were able to obtain approval and raise the required capital to complete the land purchase.

The Outcome:

The client successfully secured the new site without waiting for the existing project to finish or be sold. The bridging facility unlocked equity tied up within the development at second-fix stage, allowing the developer to continue their pipeline of projects without interruption.

The structure preserved momentum across multiple schemes and provided the flexibility to refinance onto a longer-term development facility once the build reaches completion.

This case demonstrates how specialist commercial finance can release capital from developments before completion, enabling developers to act quickly on opportunities that would otherwise be missed using traditional lending routes.