Property Development Loan

What is it

It’s a loan aimed at Limited Companies looking to raise capital to acquire and develop a property by securing it against a Director’s residential property. Once completed, this property can either be sold or rented out.

Who is it for?

Designed for Directors/Limited Companies.

What can it be used for?
  • To raise capital to buy and develop a property. Typically, this means that the property will not be available for rent as there are major alterations being made
  • The mortgage is secured against a residential property offered by a Company Director and the development property
  • There is a follow on option, if the property is going to be rented, to switch to the BlueZest Buy to Let mortgage once the development is complete, subject to status
  • If this option is selected the property will be inspected by BlueZest and if ready to rent, the mortgage security is transferred to the completed development property and the mortgage moves to the prevailing BlueZest Buy to Let rate
Security
  • Primary security for the loan is against a residential and/or other residential properties property owned by a Company Director
  • Additional security is taken against the development property
  • If required, additional borrowing is available by including the land value of this property (typically one third of the property value) within the LTV calculation
  • BlueZest will undertake further inspections of the development property at month 4, month 10 and month 16

Key
features

ERC

No ERC, but interest is charged for the loan term selected, i.e. 6 months, 12 months or 18 months.

Repayment

Two servicing options exist for this loan:

  1. Zero: No monthly payments are required. Fixed rate of interest set at outset and rolled up to the maturity and redemption of the Development Loan
  2. Full: Company services loan interest monthly until Development Loan maturity
LTV

All of our mortgages are structured around the amount of money you want to borrow compared with the value of property you are buying. This is referred to as the loan to value (LTV) ratio. It’s the difference between the deposit you have and the property purchase price in percentage terms.

If your security residential property is worth £100,000 and you borrow £75,000 the LTV will be 75%. If it still has a mortgage against it, you will be taking out a second-charge mortgage with BlueZest on that property.

Criteria
  • The company must have a good credit history and demonstrate profitability that will allow the company to repay the interest on the loan
  • The company must have been continuously trading for at least 2 years (and be able to provide accounts/tax returns for this period)
  • PAYE and non-PAYE contractors are acceptable
  • The main applicant should have a minimum gross basic annual income (including dividends and pension) of £25,000
  • All applicants must have been resident and liable to UK tax for the last 2 years with indefinite leave to remain
  • Applicants must not have any unspent convictions for offences, other than minor traffic offences

Director’s Personal Guarantees (DPG) required from all company directors.

Get Started

Development phase

ChargeLTVZero RateFull Rate
Combined 1st & 2nd ChargeUp to 75%12%10%
Combined 1st & 2nd ChargeUp to 70%11%9%
Combined 1st & 2nd ChargeUp to 65%10%8%
ChargeCombined 1st & 2nd
Charge
LTVUp to 75%
Zero Rate12%
Full Rate10%
ChargeCombined 1st & 2nd
Charge
LTVUp to 70%
Zero Rate11%
Full Rate9%
ChargeCombined 1st & 2nd
Charge
LTVUp to 65%
Zero Rate10%
Full Rate8%
For Intermediaries, please click here to download the full Buy-to-Let product fact sheet

Apply online

Start your BlueZest application on your mobile, tablet or PC, whichever you prefer. For added flexibility you can also switch between devices at any stage.

You do not have to complete your application in one go; you can stop at any time. The information entered will be automatically saved, so you can resume and complete your application whenever convenient.

Get Started