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Building on our last blog, where we discussed funding part-built schemes, development exit solutions, in this one we will look at non-traditional developments. Whether funding to complete the project or simply releasing equity for onward investment, some projects don’t always fit the traditional mould of development finance, but there are still solutions.

The barn conversion

There’s an almost romanticised appeal about living in barn conversion. Its distinctive high ceilings, exposed beams and large open spaces give the residents a unique and stunning living environment. The fact that future buyers want the preservation of these unique parts of the structure can be a challenge for a developer and can be one of the reasons why there are fewer lenders active in this environment. Whilst many in their current form are in excellent condition, others require a lot of work. When considering the usual issues around financing a self-build, the scope for potential problems can be off-putting for lenders who see the possibility of spiralling costs. Omega works with a number of lenders who specialise in funding these exact schemes, some having personally undertaken such developments and conversions themselves, meaning they understand the funding requirements and projects presented.

We’ve referenced barn conversions because they are possibly the most well-known non-standard construction property we see across conversions and build requests. However the reality is many lenders still shy away from all non-standard construction development schemes. With interest rates and the cost of materials stabilising however, there are finances available and ways to ensure these creative projects can go ahead.

Smaller development projects

The appetite for smaller development projects is also an area where we see a large volume of enquiries. Many development lenders want to fund £3M plus projects, so this leaves several schemes and good opportunities sitting under this level. With over three decades in the commercial finance space, Omega has strong relationships with many lenders who are willing to look at schemes falling under the bigger project scale. We would encourage the IFAs, brokers and introducing partners who work with us and those who are struggling to arrange finance for their clients to have a conversation with the team as soon as possible to better understand how we can help their clients.

Here are some of the terms available to us on the market:

• 90% loan to costs
• 70% loan to GDV available across this range,
• Development finance can be available up to 75% LTGDV
• 95% LTC for the right project.

For some dev exit schemes, funding is available at 80% net plus residual costs to complete. Please do get in touch with one of the team today if your clients are looking to finance any development project and we will plan ahead to ensure all parties know exactly what is available.