The Brief

Our client owns a plot of land in a rural location and gained planning permission for holiday homes. To complete the project, development finance was required.

The Challenge

The holiday and tourism sector is viewed as a high-risk by most lenders, due to the seasonal nature, being sensitive to the performance of the economy and the unpredictable nature of the income. This, along with a rural location and the typical development finance risks, means that lending can be restrictive or lenders not being comfortable with the funding.

Exits for development finance can also be tricky, as holiday home sales in rural locations are not as frequent as the general residential market, and in this case, the client wanted to mortgage the whole development as an investment which required proof of income.

The Solution

Breadalbane maintain a wide panel of funders that can lend in most situations. In this case, we quickly understood that the client would have difficulty because of the property sector and rural location. By assessing the client’s wider business and portfolio, we were able to assess several options for them to raise funds, which included development finance, unsecured business loans, remortgaging their existing portfolio, and raising short term loans (bridging) against existing property.

The outcome

Breadalbane identified a lender that could provide a 60% LTGDV development finance loan, that allowed the development to progress. The client also required additional funds to cover a funding gap in the development finance, which we were able to secure through a remortgage of their existing portfolio. Breadalbane’s close working relationship with lenders also allowed discussions around future mortgage options, which gave the client confidence to progress with the development knowing a viable exit to the finance was available.