August 19, 2019

FUNDING A PROPERTY PURCHASE

The wheels of the property market turn partially due to the availability of funding from banks and other institutions for the majority of businesses.  In the property crash, many of the Banks effectively switched off the taps for lending and their criteria changed as they became more restrictive in their lending terms to both businesses and developers.

In today’s property market there are different avenues of obtaining finance, from your mainstream Banks to your second and third tier lenders.  Commercial mortgages are available, with lenders normally funding up to 70% of the purchase cost, with payment terms of up to 30 years.  For property developments, these are usually in the form of a short-term loan that’s used for the development, with up to 70% of the gross development value being financed, with the terms being up to 24 months.  Alternatively, bridging finance is a short-term finance solution, providing a quick way to finance the purchase of a property.

Although not all Banks can offer finance of these varieties, there are still many opportunities that are available.

Some Banks are seeking to incentivise loans to be moved to other lenders and they are offering financial incentives to do so.  A number of the other Banks, such as the likes of Handelsbanken, Yorkshire Bank and Metro Bank are offering opportunities to build their books, where their criteria is met.

Naturally, each Bank will have their own set of criteria, which need to be passed in order for them to consider loans.  At FHP we act for many of the major Banks and other lenders in providing valuation advice in accordance with the RICS Red Book provisions.

FHP Property Consultants advise on a wide range of commercial properties within the office, industrial and retail sectors, but are increasingly active in the provision of valuation advice in all these sectors including development appraisals for residential and commercial projects.  We also provide valuation advice for pensions, private individuals and probate work.  Should you have a requirement for a valuation, then please contact FHP Property Consultants.

For further information, please contact Jon Marriott on 01332 224 858 or jon.marriott@fhp.co.uk.

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