Lendhub has finalized a £1.22 million development finance arrangement for a housing project in Havering. This development is strategically located within the London Borough of Havering, an area known for its suburban appeal and proximity to central London. The scheme will involve the construction of two four-bedroom semi-detached houses, designed to meet the growing demand for family-sized homes in the region. The 18-month facility is for a ground-up development on unencumbered land owned by the borrower, ensuring a straightforward transaction without the complexities of existing liens or encumbrances. This allows for a smoother process in securing the necessary permissions and financing.
The financing was facilitated by Nigel Hakkak of Cobalt Financial. Full planning permission is already in place, streamlining the development process and reducing potential delays. This permits the construction to commence without the need for further approvals, which is key for maintaining the project timeline. The projected gross development value is £1.75 million, reflecting the anticipated market value upon completion of the properties.
Interest will be rolled over the 18-month term, which includes 12 months for construction and six months for sale or refinance. This structure provides flexibility for the borrower to either sell the completed properties or refinance the loan, depending on market conditions and strategic considerations. The facility was structured at 13% loan-to-value against the £195,000 market value of the land, ensuring that the loan amount is proportional to the current value of the asset. Additionally, it was structured at 70% loan-to-gross development value against the projected value, balancing risk and reward for both the lender and the borrower.
The borrower owns the land outright, which provided an equity buffer that influenced the credit structure. This equity buffer serves as a safety net, reducing the lender’s risk and allowing for more favorable terms. The facility is designed to fund 100% of construction costs against the land equity, ensuring that all necessary expenses are covered without requiring additional financing. Drawdowns are calibrated to the build programme and monitoring conditions standard for a development of this size, ensuring that funds are released in a phased manner as construction milestones are met.
Negotiations involved three personal guarantees, which were granted in June 2025. These guarantees provide additional security for the lender, reinforcing the borrower’s commitment to the project and reducing the risk of default. The project will be delivered on a self-build basis through REA Construction Ltd, an associated contractor under common ownership. This arrangement allows for greater control over the construction process, ensuring that the project adheres to the specified quality and timelines.
The scheme has seen various professionals involved in its planning and execution. Edward Scott of London’s Surveyors & Valuers undertook the valuation, providing an accurate assessment of the land and projected development value. This valuation is critical for structuring the loan and ensuring that the financing aligns with the asset’s worth. The project has a clear path forward, with a credible guarantee and land ownership already secured. This solid foundation allows for efficient execution and minimizes potential obstacles.
The borrower isn’t the only party involved, though. This project has seen IESIS Consult acting as monitoring surveyor, ensuring that the construction adheres to the agreed standards and timelines. IESIS Consult will oversee the project from start to finish, providing regular updates and ensuring compliance with the agreed specifications. The scheme’s projected value and the borrower’s equity buffer were key factors in structuring the facility. This transaction follows similar specialist lending activity in the development finance sector, where there are now several projects in progress.
“Development cases tend to be discussed in terms of leverage ratios,” said Jack Hoad, a relationship associate at Lendhub. “This facility was driven by the borrower’s position.” The structure reflects the borrower’s position, including clean planning consent and a credible guarantee. The borrower’s ownership of the land and the presence of a credible guarantee significantly influence the credit structure, allowing for more favorable terms and a smoother financing process.
The project required a lender who could act quickly. Hakkak explained that the client had all the necessary elements in place: land, planning, contractor, and equity. The lender needed to move swiftly on the build funding to capitalize on market opportunities and ensure timely completion. This swift action is key in a competitive market where delays can result in increased costs and missed opportunities.
Other active projects in the London property finance market have seen lenders engage in both bridging and development finance segments. Heavily detailed planning and execution have been a key feature of the projects that have moved forward in the past year. This trend highlights the importance of thorough preparation and strategic planning in securing financing and ensuring project success.
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