Avamore Capital completes light refurb loan for first time developers
By David Craik -
Principal development and bridging lender Avamore Capital has funded a Light Refurbishment deal ahead of final planning approval to support the goals of two first time developers.
The group provided the £758,046 deal, incorporating a build facility, at a rate of 8.5% per annum for the developers to convert a 5-bedroom house in Maidenhead into its original form of 2×3 bedroom properties.
This was the first project that the borrowers, who both previously worked at CARLA homes as a site manager and quantity surveyor respectively, had led as developers.
Avamore said given the borrowers level of experience and understanding of development projects, it was able to offer terms of 65% LTGDV.
Later in the process, however, there was a ‘slight down valuation of the site’ which had the potential to impact the overall deal structure.
Despite that Avamore added that it felt comfortable with the strength of the scheme and so adjusted to leverage up to 69% LTGDV to cover the change in valuation and ensure consistency with the original loan amount offered.
In another complication the site was also awaiting a Letter of Lawful Development to confirm that the property had permission to be reconfigured back into its original form. The current scheme was recognised by the council as one property.
An Avamore spokesperson said that typically in this situation, the expectation would be to take out a bridging loan in the first instance, wait for the Lawful Development to come through and then proceed onto a refurbishment product.
However, “considering the scope of works planned and taking care to understand the likelihood of Lawful Development being granted we were confident to offer the refurbishment deal saving the borrower time and money in the long term”.
Avamore added that the deal was structured in such a way that it could be adjusted to reflect a bridging facility in the “unlikely event” that appropriate permissions were not granted.
Saleem Akram, Director of Commercial Financial Specialists commented:
“I was impressed with the whole process from start to finish, it was quick and effortless.
Avamore were communicative with both the client and myself. There were a couple of issues along the way but Avamore’s proactive attitude ensured that they dealt with and overcame them quickly.
I will be using Avamore again.”
Adam Butler, Relationship Manager at Avamore, said:
“It was great pleasure to work with Saleem and the borrower on this unique deal.
It really highlighted our core strength of being customer focused and ensuring that we continue to be adaptive which, in turn, resulted in us getting a strong deal structured.
The Credit Analysis and Underwriting teams worked brilliantly with the borrower and broker in communicating and keeping them in the forefront of their minds when making decisions.
Being as dynamic as the Avamore team is so important, especially in the current climate.”