jlend
Member of DD Central
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Post by jlend on Aug 8, 2018 20:25:33 GMT
Does anyone know what the option agreement is that is referred to in the title register? I'm surprised I didn't notice that earlier. IIRC what you refer to was the original agreement between the borrower and the council that the borrower would have the option to buy the site for £1.nnn million IF residential planning approval was granted for the site. This duly was (at the 3rd attempt), and the borrrower purchased the site, partially with funds from MT.
However, many of us (including me) were sceptitcal that developing the site as a single prestige property would result in a profit - essentially the GDV seems overly optimistic and hence the residual land value also seems optimistic. The new planning application is to seek permission to build 4 houses on the site not 1, a strategy that seems to have a more realistic chance of making a profit for the borrower.
The borrower seemed to ignore the old maxim of "Location, Location, Location" is everything in property development. The same failing is what has brought the FS Wimbledon dev to the point where the properties (now complete) will be sold at a loss. Properties of £3m to £4m require a suitable plot, a carriage drive (double entrance), outside entertaining space etc etc.
...agree... plus i do wonder if a plot like this will get planning permission for 4 houses...
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Post by rollercoaster on Aug 23, 2018 11:31:33 GMT
Update stating that it will go to committee, although the planning portal doesn't confirm this (yet). No clarification about the option on the deeds though. MoneyThing: you should check this with the borrower and clarify whether there are any additional risks to lenders. Also what are the current exit plans? This project has moved a lot from the original position so an update on that is needed. A single home will not be built and sold by the time this loan matures.
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Post by balloonthief on Aug 24, 2018 15:04:08 GMT
Disappointing outcome from the planning application. We shall see what September brings but looking at the size of the site I can see a compromise happening.
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Post by rollercoaster on Oct 12, 2018 12:50:14 GMT
The Planning Officer has recommended approval of the plans in the planning committee report. I have to admin I am surprised at that, I was expecting a compromise as per the post above. A quick look at 2 bed houses in the postcode suggests it'd be pretty hard to achieve over £650k per unit (they are a bit odd, so maybe that is generous).
£650 x 4 = £2,600k Land cost plus 2 years of MT interest = £1,600k
If the development finance, architect fees, build and sale can be achieved for under a million then the project is profitable. The gamble looks like it will pay off.
What next? If planning is approved by committee next week is the borrower going to project manage or the architects, or sell the plot with permission?
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Post by queenvictoria on Oct 12, 2018 15:36:48 GMT
The Planning Officer has recommended approval of the plans in the planning committee report. I have to admin I am surprised at that, I was expecting a compromise as per the post above. A quick look at 2 bed houses in the postcode suggests it'd be pretty hard to achieve over £650k per unit (they are a bit odd, so maybe that is generous). £650 x 4 = £2,600k Land cost plus 2 years of MT interest = £1,600k If the development finance, architect fees, build and sale can be achieved for under a million then the project is profitable. The gamble looks like it will pay off. What next? If planning is approved by committee next week is the borrower going to project manage or the architects, or sell the plot with permission? Do you mean a house with an end value of £650k is to be built on a £400k (1600/4) plot? That doesn't sound like a great prospect or have I got the wrong end of the stick?
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Post by rollercoaster on Oct 12, 2018 17:01:26 GMT
You got it.
But this looks better than the single house which would really struggle to get £2.6 mil.
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Post by MoneyThing on Oct 19, 2018 17:42:34 GMT
Evening. Update added to platform. Regards, Ed.
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Post by mrclondon on Oct 23, 2018 15:20:11 GMT
The 2018 planning application is now marked as "Decision: Approve with Conditions CIL Liable" on the planning portal.
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Post by mrclondon on Nov 18, 2018 13:24:12 GMT
MoneyThing , I assume your next update will outline the borrowers thinking now that planning for the 4 property scheme has been approved, whether to attempt to sell as is, or refinance. If the latter, I trust you'll encourage him to push on with planning application(s) to discharge the 'prior to groundworks' conditions to get the site 'spade ready'.
You will no doubt recall my concerns earlier in this thread where you were relaying updates from the borrower that groundworks were about to commence, when there was no evidence on the planning portal that application had been made to discharge conditions on the earlier planning approval that were required prior to commencing groundworks.
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Post by rollercoaster on Nov 22, 2018 13:31:04 GMT
A reminder from March "Subject to planning approval, the valuer will publish their updated report." I presume any valuation from March is now not relevant. But will a new valuation be forthcoming? If it is then that valuer might get some more work - I'm aware of one instance recently in London where a valuer declined work due to market uncertainty!
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Post by rollercoaster on Dec 13, 2018 17:43:50 GMT
I missed the update from last week, but it looks positive. Interesting close-ish property as a comparison for the value of completed units: www.rightmove.co.uk/property-for-sale/property-76526579.html Value is for a cleared site, so is the site clear or is the Audi still King? Noting mrclondon's point above about pre-development conditions. With 3 months left on the loan what is the exit strategy? Everything seems to be a bet on Brexit's effects these days.
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agent69
Member of DD Central
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Post by agent69 on Dec 19, 2018 17:08:25 GMT
I see somebody took a £38k chunk of the SM this morning.
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Post by rollercoaster on Jan 30, 2019 12:12:07 GMT
Two months to the end of the loan / refinance point, and people have been piling in so there is no SM availability. What is the strategy here? Are people thinking it'll default and are after default interest? Or is it seen as a short term 'safe investment' for funds from other loans that have repaid?
This loan had been fairly consistent with a large amount available on the Secondary market until recently.
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amwinv
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Post by amwinv on Jan 30, 2019 12:41:16 GMT
Two months to the end of the loan / refinance point, and people have been piling in so there is no SM availability. What is the strategy here? Are people thinking it'll default and are after default interest? Or is it seen as a short term 'safe investment' for funds from other loans that have repaid? This loan had been fairly consistent with a large amount available on the Secondary market until recently. It's just proof most people were in the queue for the sake of it. Some positive updates, a few big hitters taking 10-20k each - and everyone near the front of a barely moving queue, suddenly got bought out. They bought back in and those they bought off bought back in. Others panic and cancel the sale order. Liquidity improves, confidence grows, queue disappears. Tldr: People are idiots.
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hazellend
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Post by hazellend on Jan 30, 2019 14:53:07 GMT
Two months to the end of the loan / refinance point, and people have been piling in so there is no SM availability. What is the strategy here? Are people thinking it'll default and are after default interest? Or is it seen as a short term 'safe investment' for funds from other loans that have repaid? This loan had been fairly consistent with a large amount available on the Secondary market until recently. Thanks for the heads up. Been in this from the beginning and sold 3k in under an hour today. It’s been a solid loan
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