Octopus Property launches residential development-light product
Specialist property lender Octopus Property, part of the Octopus Group, has launched a development-light product.
This is to meet the increasing demand from SMEs and smaller developers requiring finance for residential schemes that sit outside the traditional refurbishment or development lending parameters.
The intermediate development product, for projects with build costs between £0.5 and £1.5m.
It is targeted at schemes that may require more technical support than a typical refurbishment, but are shorter-term, require less monitoring and are lower down the risk curve than a normal development project.
Gavin Eustace, head of development at Octopus Property, said: “We continue to leverage our market knowledge and relationships to better understand the challenges facing property professionals in accessing development finance, and believe that this product is ideally positioned to fill a gap in the market.
“With wider macro uncertainty affecting the sector, smaller developers are increasingly looking at ways to re-position existing properties to realise value or embark on smaller ground-up schemes which require a new type of funding to match the risk profile of the project.”
It’s priced at 8% fixed rate per annum and has a maximum LTV of 85%, and a maximum loan-to-gross-development value of 70%.
To date Octopus Property has provided nine loans, totalling £10m for a diverse range of schemes, including the conversion of an office in Leytonstone, North London, into 10 apartments where Octopus Property agreed a £1.4m land loan and a £0.6m construction facility.