Locked-down – but not locked out

A property development company in Northamptonshire had recently completed a ground-up development comprising six flats and a small retail shop in Kettering using development funding.

The intention was to sell once completed.

Unfortunately, this coincided with the start of the first Covid-19 lockdown in March. Finding themselves unable to sell, the company decided refinance and retain the flats. This would enable them to retain and let each of the flats, as well as leaving open the option to sell individual flats and reduce the debt.

The developer successfully let the commercial property to a barbershop, and four of the six flats were let. However, due to the pandemic, the tenants were unable to take occupancy.

With all these challenges, it was necessary to find the most favourable loan possible, ASC Northamptonshire Director, Philip Thompson, was able to obtain a 25-year loan of £671,200 against a 65% LTV to repay the development funding which was due for redemption. The lender allowed our client a three-month window of no repayments, to give the tenants time to move in and start paying rent.