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Surrey is a county located in the south east corner of England, bordered by Hampshire, Berkshire and Greater London. Guildford is the county town. Surrey has many notable landmarks including Box Hill, Leith Hill, Hindhead and Abinger Hammer.
The county is home to the Gatwick Airport and is also the location of the headquarters of several large companies including Ernest & Young, GlaxoSmithKline and Shell.
Here is a great website for people wanting to know more interesting facts about Surrey!
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Do you need development finance for your property in Surrey?
Before starting on building your development in Surrey, make sure you have accurately calculated the funds that you will need to complete your development. Building costs can change overtime and in recent years we’ve seen materials become more expensive.
Many developers decide to use development finance to fund their building projects even when they’re in a position to complete the development without the finance.
The most common reason developers take development finance when they have enough money in the bank to complete the project without it is to hold back funds that can be used towards other simultaneous developments or to protect against the project costing more than initially thought.
If you are planning to take development finance, just bear in mind that it can be costly so do not take too much and be sure of your exit plan when taking it.
How would development finance work for my property development in Surrey?
Development finance is raised against the plot that you own or that you are buying. The money raised is then used to pay for the build of the property or properties on that site.
The money is released in stages throughout the duration of the build. At different intervals, a surveyor will come out to the site to inspect it so sign it off before the lender releases for the next sum of money.
Often monthly interest is not paid on development finance, instead a net amount of money is paid to the borrower and a gross amount paid back at the end. For example, a property developer may need £800,000 to complete their project, rather than pay interest every month it may be that the total amount to be paid back at the end of the loan term is £1 Million pounds when taking into account monthly interest for the period (e.g. 24 months) the set up fees and the redemption fees.
The numbers would differ from deal to deal so best to ask your mortgage adviser to explain all of this to you.
Would I need a development finance broker to get development finance for my project in Surrey?
When looking to take finance for your property development in Surrey, it would be recommended to look for a financial adviser that has experience in arranging this type of finance. Development finance is complex so finding a suitable adviser is important.
They will need to work with you to understand the project, your experience, expected timeframes, the amount of money that you have to put into the project yourself, what you need to borrow and a clear plan of your exit strategy at the end.
Your adviser would not necessarily need to be based in Surrey themselves as many development finance mortgage brokers conduct their business over the phone saving you the need to arrange face to face appointments. If you felt a face to face appointment was needed for you to understand your options, you should look for a local mortgage adviser with experience in development finance.
What is the most that you can borrow for your property development in Surrey?
There are some lenders that would be willing to lend all the way to 100% of the project as long as you have sufficient assets as security for the loan. For example, if you had another property in the background with a large enough amount of equity within it, some lenders would be willing to secure the finance across both the plot that is being developed and the other property in the background.
Bear in mind that if you are taking financing this way, this means that both assets could be repossessed if the loan was not paid back.
If you do not have multiple assets to use as security for the loan, a more common loan to value threshold is approximately 75% gross loan. This amount would vary based on the lender and the individual project.
Your mortgage adviser will be able to work with you to assess the situation and then advise what the maximum amount is that you can borrow for your property development in Surrey.
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Do you need to be an experienced property developer to be agreed for the finance?
You don’t always need to be an experienced property developer to be offered development finance. Lenders will always need to know what your experience is and be confident that you are able to complete the project within the expected time scales so they can be paid back in time.
They will need to know whether you are going to be using a professional architect and a professional company that will oversee the build. Many lenders will also need to see a fixed contract at the beginning for assurance that the costs of the build have been accurately budgeted for.
The level of experience that you have yourself as a property developer may affect the different products that you are offered. Your mortgage adviser will work out who would be your possible lenders based on the level of experience that you have yourself or people that you intend to oversee your project.
What are the best areas in Surrey where my development should be successful?
This is a difficult question as it is subjective and there are also many great places in Surrey where people love to live. Some desirable and popular spots in Surrey include Farnham, Weybridge and Guildford. Here is a bit of information about each town for people that don’t know the history of them.
Farnham is a town located in the south-west of England in the county of Surrey. It is approximately 33 miles (53 km) south-west of London and 16 miles (26 km) east of Winchester. Find a mortgage broker in Winchester.
Farnham is the second largest town in Surrey, after Guildford. Farnham is a market town. It has a castle and a abbey.
Weybridge is a town in Surrey, located just outside of London in borough of Elmbridge. It is bounded to the north by the River Wey and to the south by the M25 motorway. The town is served by Weybridge railway station on the South Western main line.
It is home to a number of historic buildings and landmarks, as well as a variety of shops and restaurants.
Guildford is a historic market town in Surrey, England, located 27 miles (43 km) southwest of London. The town has a population of about 80,000 and is the seat of the borough of Guildford. It is known for its castle, Guildford Cathedral, and for a medieval bridge across the River Wey.
Guildford is a historic town with a long association with the British royalty and aristocracy. The town was the site of the first ever Parliament in England, in 1295. Guildford Castle, which overlooks the town, was built in the 11th century and was later the home of several English monarchs, including Henry VIII and Elizabeth I.
Guildford is also home to the University of Surrey, one of the leading research universities in the UK. The town has a lively cultural scene, with a number of museums, art galleries, and live music venues.
Guildford is well-connected to the rest of the UK, with regular train and bus services to London and other major cities. The town is also served by London Gatwick Airport, which is located just outside of Guildford.
Those are three examples but there are plenty of great spots in Surrey, especially if you plan to live here following the development. Find a mortgage broker in Guildford.
How would I be expected to pay back the development finance against the property in Surrey?
At the end of your development finance term, you will need to pay back the full amount of the loan. Loan terms will be different but a common term for development finance is 2 years. How you decide to repay the loan is down to you but this would usually be by selling the development or refinancing out of it on another mortgage, usually for a much longer term.
For example if you had bought the Surrey plot to build a house that you now will live in, you may wish to remortgage onto a residential product which would be linked to your personal affordability.
If you plan to keep the Surrey property but wish to put tenants into it to pay you a rental income, you may then wish to remortgage out of the development finance onto a buy to let mortgage. These are linked to the rental income that the property would be expected to generate.
If you plan to sell the development, you may have a tax liability. always take professional advice from a qualified tax adviser.
What would be the difference between commercial and residential development finance for my project in Surrey?
Whether you would need commercial or residential development finance would depend on what you are building and the use of that property.
For example, if you were building a Surrey based hotel looking to then rent it to a company in the future for them to occupy and run their business from it paying you rent, you would take commercial development finance. Once the build is complete, if you wanted to keep the property and needed to replace the finance, you would likely need a commercial mortgage.
Many commercial mortgage advisers will be members of the National Association of Commercial Finance Brokers.
If you were building a new Surrey home for your family to live in at the end of the build, you would be taking residential development finance. Advisers arranging regulated finance should be showing on the Financial Conduct Authority (FCA) register.
Your mortgage adviser would understand your project and then advise the finance that you need.
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Where would I go to find land for sale for my development project in Surrey?
If you are looking to buy land in Surrey to then develop, it would be worth talking to some estate agents to find out if they have any contacts that they could put you in touch with who sell land in Surrey.
It may be that the individual agents that you talk to also list land And have plots for sale, they may also know of plots coming onto the market in the near future.
Your builder or architect may also know of people planning to sell land in Surrey so it may be worth asking them to put you in touch with any individuals that can offer this.
It’s also not uncommon for land to be sold via property auctions so using the Internet you will be able to find out what auctions are taking place on which days and details of the plots and properties that they’re selling. A popular property auction company is Allsops.
How could I NEED ADVICE help me when looking for development finance in Surrey?
If you’re looking for an experienced mortgage adviser with knowledge on development finance to help you with your project in Surrey, I NEED ADVICE can find you a mortgage adviser that can offer you a free consultation to discuss your options.
The adviser will be able to discuss your lending requirements, experience, income and credit history to work out who would be the suitable lenders for you in your situation.
There would be no obligation to use any broker that we put you in touch with end would encourage you to do your own due diligence too.