United Trust Bank has launched a range of flexible ‘residential property improvement loans’ aimed at property developers.
The products offer a choice of loan options funding both the improvement works and acquisition costs, or alternatively, just the acquisition costs.
Aimed at developers wishing to carry out a range of projects, the loans could help cover the cost of extensions to complex conversions, as well as straightforward refurbishment projects.
Loans can be repaid when the property is sold once works are complete, or refinancing of the loan if the property is to be retained for letting.
The Funded Works Improvement Loan allows the borrower to fund 100 per cent of the improvement costs - maximum of £500,000 or half of initial market value, whichever is the lower - and to borrow a maximum of £1,500,000 subject to a maximum 70 per cent of loan to gross development value.
Interest will be charged at 0.95 per cent per month and be added to the loan.
Another product, the Unfunded Works Improvement Loan, is for borrowers who intend to fund the improvement works themselves, providing up to 70 per cent of the purchase price, with interest charged at 0.75 per cent per month and added to the loan.
Applicants must have successfully completed at least two similar projects, noted United Trust Bank.
Head of sales and underwriting in its bridging division Gavin Diamond suggested the loans will appeal to experienced property improvers looking for the opportunity to work with a finance partner that understands the business, the process and the challenges which can often arise during a project.
“This product is something of a bridging and development finance hybrid. But like many of the products brought to market by United Trust Bank, it is a specific response to demand and has been developed in consultation with our broker partners.”
peter.walker@ft.com
