News

In what has been a challenging period for many property investors and businesses, with ever increasing demands on cash flow, we continue to see clients’ desire to drive returns from their investments and ensure their money works harder and smarter to navigate the economic climate.

In the most recent article, we discussed how investors have shown resilience in the last couple of years through challenging economic waters by moving away from residential portfolios and leaning towards alternative residential investment, commercial and semi-commercial property use. In this article, we want to highlight a rise in requests for conversions, renovations, and vacant property works and how there are new innovative options available to support these projects.

Finance for conversions and renovations

Omega has started the year with a significant increase in enquiries from our partners whose clients require funding for works to support conversions and renovations of properties of all shapes and sizes. There has certainly been a spike in the volume of requests for property being converted or scenarios where finances are required for a pre planning purchase and change of use. The terms available to support both purchase and costs of works vary based on property type, enhanced value, and many more variables, but it’s important to note that terms are available whether it is the first project with no prior experience or clients have completed multiple schemes previously.

In addition to conversions, many clients are seeking to pick up a strategic purchase, perhaps currently vacant commercial property, or semi-commercial with empty units, and source a tenant either pre-completion or in many cases post-purchase.

Non-standard construction and development

The appetite to create distinctive properties that stand out in a crowded market remains strong, and previous articles discuss the desire for non-traditional developments. This continued demand means our team has access to and good relationships with lenders who will offer terms on the more unusual non-standard construction projects and development and conversion schemes. In a challenging market, it makes sense for property investors to consider both more traditional investments and development schemes but also compare against alternative projects and understand the financial solutions available to facilitate an ever widening range of needs.

Remote working here to stay or are we seeing a decline?

The appetite to support investment into offices and other commercial assets impacted by the shift to a largely remote working environment has been significant and varied from lender to lender. This has continued to change as market sentiment became more localised and specific to each property and project. Repurposing has become a popular phrase used over the last few years and appetite for changing use or developing vacant properties coincided with the change in working behaviours. We are now hearing however, from numerous sources within the market of the beginnings of decline in remote working, certainly from larger corporations. The ripple effect of this shift is starting to feed into buyer and developer appetite. The team have heard anecdotal references of developers rethinking the new housing stock being built specific to locality. This may lead to switching the need for rental stock and with it suitable purpose built development finance solutions.

Identifying project and finance requirements

We have always promoted early finance conversations as these can help crystallise clients’ thinking about the feasibility of their projects and with it their exact requirements. Our relationships with introducing partners, brokers and IFAs mean we will always be transparent and give a comprehensive understanding of what will be possible for clients.

Many use our many years of experience as a sounding board to understand what is available in the market for a new project, even if in infancy stage, to allow them to plan ahead and ensure all funding needs are met ahead of time, or simply a project needs to be amended to fit with lender policy.

This of course isn’t always the case and many clients call with urgent requirements, auction purchases and immediate completions needing to be funded, appreciating that time isn’t always on their side. We work with a range of funders to ensure these requirements can be met.

Some recent case scenarios presented have included:

Property Conversion: investors looking to convert existing properties into new uses, this has included residential property into hotels, student lets, holiday lets and others.
Commercial assets into alternative commercial property and one recent enquiry to turn a mixed use asset of flats and offices into their new home

Renovation Finance:  Properties needing significant work to ensure marketability, borrowing at 75% net against property value, and 100% of the cost of works.

Pre-Planning Purchase Finance: loans to cover the initial purchase and planning costs before an application has been submitted for change of use. This allowed our client to purchase the property at a discounted level, provided them time to get the plans right and application approved immediately enhancing the value of that property and using that enhanced figure as part of the transaction to leverage further and cover the cost of works.

Auction purchases with planned refurbishment and extensions: Clients borrowing at 80% net against purchase price with all interest and fees built in on top of this.

Development Finance: appetite for both small and larger projects, including new builds or extensive redevelopment. Terms to support clients undertaking their first project ranging through to experienced developers, tailored to each client and scheme. Borrowing available up to 90% of all costs.

Please do get in touch on 0333 6000 007 or upload a request via our contact page.