The product will support smaller developers who require finance for residential schemes which sit outside the traditional refurbishment or development lending parameters.
The new intermediate development product is for projects with build costs between £500,000 and £1.5m.
It is targeted at schemes that may require more technical support than a typical refurbishment, but are shorter term, require less monitoring and are lower down the risk curve than a normal development project.
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Key features of the development-light product include:
• 8% fixed rate per annum
• a maximum loan-to-cost of 85%
• a maximum loan-to-gross development value of 70%
• a loan size of £500,000-1.5m
“We continue to leverage our market knowledge and relationships to better understand the challenges facing property professionals in accessing development finance and believe that this product is ideally positioned to fill a gap in the market,” said Gavin Eustace, head of development at Octopus Property (pictured above).
“With wider macro uncertainty affecting the sector, smaller developers are increasingly looking at ways to re-position existing properties to realise value or embark on smaller ground-up schemes, which require a new type of funding to match the risk profile of the project.”