en.Wedoany.com Reported - Avamore Capital has provided a £895,000 development loan for a two-residential new-build project in Bromley, UK, marking the borrower's first venture into a ground-up development. The 15-month loan is structured at a 70% loan-to-gross development value ratio.
The lender agreed to directly fund most professional fees and community infrastructure tax payments without requiring these items to go through formal monitoring surveyor interim reports. This approach aims to reduce administrative delays during the construction phase.
The transaction faced several challenges, particularly as the planning permission was due to expire approximately two months after the loan completion. Although the borrower had real estate experience, they had never undertaken a ground-up development before. Avamore conducted a review and determined that the borrower had a plan to commence works and retain the permission within the required timeframe. The lender assessed the developer's track record and project fundamentals before proceeding.
Adam Klein, Director of Atlas Property Finance, which introduced the transaction, stated that the team, particularly Aidan, Saif, and Owen, made efforts to ensure a smooth process, while also considering the borrower's relatively young age and recognizing their strong track record in successfully delivering projects, as well as the strength of the professional team supporting the project.
Aidan Lesslie, Relationship Manager at Avamore Capital, said that although this is the borrower's first ground-up development, the lender is confident in their ability to deliver the project. The project fundamentals are strong, the location is excellent, and the borrower has demonstrated a clear strategy to commence works before the planning permission expires. Saif Ali Khichi, Senior Credit Officer at Avamore Capital, noted that the lender focused on the overall risk profile and execution strategy, and the borrower provided evidence of steps taken to implement the permission before its expiry.
The transaction reflects a broader trend in development finance, where lenders are increasingly assessing the borrower's overall capabilities rather than just past project types. This approach differs from the buy-to-let sector within investment strategies, where track record remains a primary consideration. The Bromley project joins a pipeline of small-scale residential developments in London and the Southeast, as developers navigate planning constraints and evolving government housing policies. In the current lending environment, a 70% loan-to-gross development value ratio is typical for ground-up residential projects.
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