Despite many news outlets talking about how Brexit will influence the property market, the market has been particularly steady. Many advisors have warned of an impending “collapse” in the property sector, but instead, we have seen some interest spike in recent times. If you are looking to get into the property development game you will need to know the ways of funding a project like this.
A rare, but valid option when it comes to funding property development. It is a nice option if you have the cash laying around, as it comes with the benefits of no interest and no other charges may incur. The only downside is that the cash is tied up until the project is completed, and you can possibly miss out on other opportunities if you have no other funds.
The most common way to finance a property, where you purchase a property and follow it up with development finance. Many lenders will give capital up to 75% of the costs for development and some can give based on the projected gross value as well. In some situations, development finance can work to your advantage and get you more in return on the backend of the deal.
Another great way to fund a project is to go into a deal as a joint venture with someone else. The interest rates in the UK are low currently, which is prompting people to get together with different partners to get into a project. The outcomes of these scenarios, depending on the situation and parties involved, can be a lucrative one for you.
Within the property development sector, there have been more and more lenders and smaller banks that have been populating the finance portion of it, which is helping more people to easily and effectively get the right type of funding for the project. Any two deals are not the same, and there are always different factors making the different options for financing and funding available to anyone in different situations.