Octopus expands residential development lending range

Octopus Property has launched a new, lower-priced development finance product as it continues its most comprehensive rates overhaul since 2009.


The residential development product is priced at 0.54% pm for loans up to 60% loan-to-gross development value (LTGDV) with an exit fee of 1%, which is charged on the gross facility amount only, rather than the GDV.

The product looks to build on Octopus’ popular senior-stretch 70% LTGDV offering as the lender attempts to disrupt the mainstream finance market.

“Having established a reputation for offering developers swift, certain and flexible lending through our senior-stretch product, we’re delighted to be expanding our existing range to more comprehensively cover the mainstream development finance market,” said Emma Burke, head of development origination at Octopus Property (pictured above).

“We can now offer developers lower rates to reflect lower leverage requirements and structure flexible loan facilities to reflect the varying complexities of each scheme.”

The pricing of the full range of Octopus Property’s development finance products is as follows:

•    60% LTGDV – rates from 0.54% pm (6.5% pa)  
•    65% LTGDV – rates from 0.66% pm (8.0% pa)  
•    70% LTGDV – rates from 0.83% pm (10.0% pa)
•    1.00% exit fee charged on gross facility amount only (not GDV).

“We believe that the best way to continue growing our loan book with higher-quality borrowers is to offer them a complete range of financing options and certainty of lending,” added Emma.

“Having done repeat business with over 80% of our existing clients, we are better placed than ever to meet the growing demand from both new and existing clients for our range of development products.”

Mario Berti, head of Octopus Property, said the new product supported its position as the leading lifecycle lender as it provided a full suite of loan facilities capable of supporting property professionals through the various stages of the property development process.

“We’ve always been firm supporters of the residential development sector and feel it is the right time to broaden our range, with the market opportunity for higher LTVs at a competitive pricing point being driven by the well-publicised UK-wide housing shortfall.”

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