Objective
Our introducers’ client was hoping to fund the development of two new build houses, to be built in the grounds of the client’s primary residence, one part built (not wind and water-tight) and one just a plot of land with planning.
Obstacle
The client’s principle primary residence sat in the middle of the site, and this would typically make it an FCA regulated case. The surrounding land has full planning for a total of seven new build houses. One was already finished and sold, one was part-build, but not yet wind and water-tight, and the other was a bare land plot, where no works had been started; the remaining plots would form later phases of the build. The structure was tricky, as part of the site was owned in the client’s personal name, but he was building in his limited company name and ideally wanted the debt to sit within the business. Plus, his existing mortgage was coming to end of term and needed refinancing as well.
Outcome
Our award-winning team were able to raise a first charge bridging facility to clear the residential mortgage, so the client did not have this to worry about or any monthly mortgage costs during the build. Ultimately, the client intends to demolish his current home anyway to make room for the new build houses that will sit on the plot, so this made sense to do now. The client was able to clear his mortgage, borrow to finish the build of the first two houses, via stage release drawdown development facility to fully fund the entire build of the remaining two properties. This was via a third-party charge and split between the limited company and personal name borrowing, all under one loan agreement. Once the first two houses are sold, the bridge would be repaid, and the client then plans to demolish his main residence to continue with the build of the other units.
The team had to facilitate lending to the limited company and 3rd party charge to the borrower personally, moving some of the assets by splitting title and moving from personal name to business name via transfer of shares in the limited company.
