Top 10 Finance Ltd Rex House, 4-12 Regent Street, London, SW1Y 4PE
Consumer Credit License Number CCL 657619/1 FCA Regulated
We are registered and comply with the Data Protection Act (1998). Registration No: Z2861884 Company registered in England number 06261373
HSBC Property Development Finance & HSBC Property Development loans HSBC Bank is a UK Bank that offers mostly personal Financial products although they do offer commercial banking we are currently unaware that they offer property development finance if they do then it would be along the lines of the other big four banks as they are known, these tend to only offer this type of loan to clients that are already known to them and or have a previous history of completing property developments, the other high street banks will offer funding but at greatly reduced loan to values than are on offer through other lenders, the criteria will be along the lines of 60% of what your development costs are with your portion i.e the 40% you will be providing put on deposit or used to finance the land or site acquisition the 60% of funding they then offer would go to the balance of the land purchase and the construction costs of the development, they would want to see that they are funding 100% of the construction and professional fees this is to ensure you have enough cash to complete the build once you start on site, they would also ask you to provide what is called a cost overrun guarantee, what this basically means is that if you go over budget then you will have to find the extra cash from your own funds, they do not like to provide further finance once all of the costs have been only in exceptional circumstances with proof of what the overrun is for would even look at it.
HSBC Development Loans what other costs will be payable?
Interest rates from the big four are competitive as low as 4% pa but this does not take into account other fees that will be loaded onto the loan, this includes such things as a commitment/arrangement fee that will be in the range of 1-2% this is on the loan amount and will be payable before legal's are started, you will also be liable to pay for a surveyor who the bank will instruct to look at the feasibility of your project and will cover such things as the value of the land at the time of purchase, the end value of the finished properties and also a Quantity Surveyor who will look at all of your construction costs and see if you have accounted for all of the costs you are likely to encounter in addition you will need a contingency sum for any unforeseen circumstances, another fee is the Exit fees which are calculated on the total value of the properties this will be in the order of 1-2% of the total project value.
HSBC Development Loans are not the only source of funding for property development in the UK, we work with many lenders who can offer far more attractive terms for an HSBC Development Loan and a higher loan to value loan and best of all they do not have exit fees which can eat into your profit margins if you think about it a 2% exit fee on 20% profit will take 10% of your profit, so it pays to look at all of the options that are available to you.
UK Development Finance covers the whole of the UK and can get you quotes for your development finance from our lender panel who will not only lend to developers who are undertaking their first project but also experienced developers who are looking for greater flexibility from a lender and more competitive rates than those on offer from the HSBC Bank.
To get the ball rolling give us a call on 0800 138 6001 anytime 24/7 or you can talk to us on chat or complete the web form and we will give you a call at a time that is convenient to you.
Property Development Loans are not FCA regulated unless you intend to live in the property.
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