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Development Finance Applications - Getting Your Paperwork Right

Development Finance Applications - Getting Your Paperwork Right

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Revolution Brokers manages hundreds of development finance applications, and submitting a thorough application with all of the supporting documentation means a far higher chance of approval.

Our team assesses each application before submission, to ensure it contains all the relevant information and will be easy for the lender to approve.

In this guide, we explain all the crucial paperwork you'll need. For more assistance with submitting a successful development finance application, give us a call on 0330 304 3040 or drop an email to info@revolutionbrokers.co.uk.

Planning Permission

Planning application or permission information will help a lender get a better idea about the viability of the development. You can also include a link to the planning portal.

Plans and Site Drawings

By including through site plans, the lender can visualise the project, and assess the accuracy of the calculated costs.

Planning Restrictions

If there are restrictions against what you can build, or what materials you can use, identifying them at the application stage is beneficial.

Lenders will also need to know whether there are Community Infrastructure Levies payable. CIL payments make a substantial difference, as if the levy is high, it will impact the final profit.

Costs and Budgets

You will need to include highly detailed budgets and not just an overall cost figure. The more detail, the better, and if this can be broken down into months or stages, all the more sufficient.

Your Developer Experience

Most lenders will ask to see your development CV, and backing that up with evidence of previous projects completed makes for a much more robust application.

Previous experience improves your credibility, reduces the risk, and ensures that the lender is confident that you can successfully manage the property development.

Detailed Schedule of Works

When applying for development finance, you will need to agree on timescales with the lender. Thus, they will need to know how long the development will take, and when the significant stages will be complete.

A detailed schedule of works, accompanied by a budget breakdown at each stage, shows a well-planned development that is likely to run on schedule.

Development Team

Particularly if you are a new developer, the team you use - including crucial people such as the architect and contractor - will make a difference to the risk factor assessed by the lender.

If you include details of your team, and their experience or professional background, this can improve your application.

Asset Schedule

Development finance lenders will ask for a summary called an ALIE - asset, liability, income and expenditure report.

This report is essential, so the earlier in the process you provide it, the better. The report matters since it shows whether you are financially independent, and what sort of contingency level there is to cope with any unexpected increased costs or time delays.

Lenders will also prefer to see financially stable applicants who can provide personal guarantees secured against other assets to mitigate their risk.

Exit Strategy Details

The lender must know how you expect to repay the loan at the end of the term - whether that's through refinancing, remortgaging, or through selling the property.

Gross Development Value Estimate

GDV is a critical metric and shows the value that the property is expected to be worth on the open market once the building work is complete. This should be at least 20% above the project costs, and ideally 30% or higher.

You'll need to have references from at least two local property agents supporting the projected GDV value. If you can include details of other property sales or valuations that back up your figures, it is beneficial.

Personal ID Documents

Lastly, a UK lender needs to complete anti-money-laundering checks, and will therefore need information about your ID, deposit source and address.

Providing this information at the beginning will save the lender needing to ask for further documents later on in the process.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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