A client came to us with a sizeable office premises which he’d let to his IT company for the last 20 years.  He now intended to relocate his company elsewhere and develop the vacated site into eight self-contained flats to let out.  Permitted Development Rights had been approved by the Borough Council to May 2016.   The client sought a £550,000 finance facility to settle the £150,000 current mortgage outstanding against the property and fund the £400,000 cost of the development.

This was an interesting case as, although our client didn’t have direct relevant experience, he was going to use the services of an experienced surveyor and structural engineer and the development was to be project managed by a suitably qualified architect.

The client also proposed to rent out the flats for £57,600 p.a. and refinance onto a term facility. Furthermore his income from the IT business was circa £85,000 p.a.

With these plans for repayment, the help of a first legal charge over the freehold (currently valued at £350,000) and a gross development value of £950,000 we were able to arrange the finance at 7.5% flat rate with interest rolled up for the 12 month conversion period, as the client requested.