Development Finance

At Cobalt Capital we also specialise in providing both residential and commercial property development finance for our clients.  

A property development loan is usually arranged on an interest only basis and the term of the loan is typically 12-18 months. This usually depends on whether one is renovating an existing property or building a property new on land. Development Finance usually consists of two loans. A Land Loan which would fund the purchase of the land or property you wish to develop and a Development Loan wish would fund the works and costing of the Build/Renovation.  

Unlike residential mortgages and Buy-To- Let mortgages when applying for a development loan all applications are looked at on a case to case basis. This only enhances further the importance of having a good professional brokerage with an award winning reputation to present your proposal.  Property development finance rates differ dependent on the applicants experience, the industry sector and the caliber of the proposition. However, a developer should consider paying a margin of Bank Base Rate + 1.25% to 2%.

In development finance there is often large differences in the rate/ margin a bank is prepared to offer. Yet another reason why at Cobalt we are committed to reading the market and sourcing the cheapest lending for our clients. Development loans are widely available at 70% Loan to value. However, at Cobalt we have the contacts to obtain higher Loan to value facilities. Up to 100% Loan to value with the assistance of mezzanine finance. Typically, commercial and residential property development mortgages are arranged on loans over £250,000.

At Cobalt Capital we are able to look to arrange finance without planning permission and where an application for change of usage has been submitted.