BuildSafe Construction Finance

Construction Finance

The right finance package & insurance policies for Professional Property Developers

Construction Finance

Through a network of trusted partners, Buildsafe can provide clients with short term finance (12 months) to purchase a property and execute the works. We also provide the structural warranty that allows them to sell or refinance the units in the future.

Some developers have recently made the common mistake of thinking that there is no warranty requirement for refurbishments or conversion projects only for new build. In fact, lenders now insist on a warranty being in place for any conversion or refurbishment where structural work is taking place. It has also been known for lenders to refuse finance even on a conversion where no structural work has taken place.

The rule of thumb now is if you are carrying out works that will convert a building from one type of use to residential or are carrying out major refurbishment works to a residential unit then you need a 10 year building warranty.

Construction Finance is aimed at professional property developers who have the skill to carry out the works to a high standard with a quality outcome. Our partners and select panel of lenders are looking for developers with a proven track record who are developing a relevant project for the location and in established residential areas.

The lending criteria is set individually but as a guide they will lend 100% of the construction cost and up to 70% of the GDV (gross development value). Interest rates vary but are fixed for the term of the loan. Arrangement and redemption fees are negotiated on a case by case basis. As we are focused on quality of service we like to meet all our clients at least once before agreeing on a project, once this is done we can usually assure our clients of a lending decision in principle within 48 hours.

We can also assist with bridging facilities usually up to 60% of the value of the asset.

Our ethos is to provide outstanding customer service. Sourcing finance can be a difficult process for a developer and more often than not can result in a negative outcome. We manage the process for our clients making sure they receive the most relevant product available to match their requirements.

Our team has in excess of 20 years’ experience in the UK property sector including development finance, insurance and asset management.

What is Construction Finance?

Unlike construction loans, mortgage loans can be paid back over multiple decades. Construction loans are usually repaid in less than a year and loans are dispersed as you make progress on the development.

Construction financing can provide you with the necessary funds to complete your construction project. You can use the capital to pay employees, buy supplies, and purchase equipment.

Although construction loans have short repayment periods, lenders will often permit you to transform a loan into a mortgage once construction reaches completion. With this choice, your chosen financing will be wrapped up into one single transaction.

It's important to bear in mind the interest rate is decided on a case-by-case basis, so the only way to get a good deal is to shop from multiple lenders.

At Buildsafe we see our role as an independent advisor, who reviews the merits of each policy to help you make well-informed comparisons. We also save you time in procuring quotes, analysing and comparing quotes, and negotiating the commercials. Our experts have over 40 years’ experience in the property sector, so you can be assured that your construction finance will be handled with great care through our network of trusted partners.