Large Development Exit Loan Based on the Open Market Value

Large development exit loan based on the Open Market Value

LTV:

75%

Gross Loan Amounts:

£6,300,000

Property Values:

£8,500,000

Initial Circumstances

A broker we have previously worked with introduced us to a new client. The client was a property developer in need of a loan to redeem an existing development finance facility.

The borrower’s initial development loan funded the construction of 4 new build flats. Due to the pandemic, the building schedule had been severely delayed. With the initial loan term ending, the borrower felt under pressure to repay their first lender. After looking at the initial circumstances, we knew we would be able to step in to help the developer.

Our Solutions

Our BDM, working alongside the underwriter, got to work straight away to find the best solution for the developer’s circumstances.

Using our trusted panel of valuers, we were able to get the properties valued quickly, receiving the valuation report within three days. This meant that we were ready to instruct lawyers straight away upon receiving the green light to proceed from the broker.

We understand that the current circumstances facing some developers is stressful. Whilst the stamp duty holiday has been successful in restoring confidence back in UK property, developers are still facing ongoing delays due to the Coronavirus pandemic. We are in a time when lenders need to be flexible.

In the current market, other bridging lenders will only lend on a 180-day value. Here at Market Financial Solutions, our key concern is providing our client with the best financial solution for them. We have witnessed a steady rise in property value over recent months. Taking this into account, we decided to provide the facility at 75% loan-to-value on the Open Market Value of £8,464,000; providing a bespoke solution that worked for both us and the client.

The Benefits

The developer exit loan provided the borrower with the time they needed to finish their development. It also offered additional time for the client to find buyers for the properties without the pressure of needing to repay the loan immediately.

Our BDM & Underwriters work closely with our brokers to ensure they are kept updated on the progress of their client’s deal. Both the broker and developer were extremely happy with our communication, speed, and bespoke bridging loans, and we look forward to working with them again soon.

FAQs

How does a development exit loan based on OMV benefit the borrower?

Some lenders base their lending on a forced sale value, which can restrict how much a investor can borrow and put added strain on cash flow. By lending against the open market value, we allowed the client to access more funding, giving them extra flexibility to manage sales, settle contractors, or invest in marketing the units.

How do you structure repayment if planning, cost, or market conditions change during development?

We take a pragmatic, case-by-case underwriting approach. If circumstances shift – whether planning delays push back completion, build costs overshoot, or open-market value dips – we work with you to assess the revised valuation and exit timeline. This lets us realign funding on realistic terms, avoiding refinancing pressure and helping you maintain momentum through to exit.

What makes your development-exit facility well-suited for large-scale projects?

Our development exit bridging loan is designed to support projects of varying scale – from individual units to portfolios – across commercial, residential, or mixed-use schemes in England and Wales. We can offer funding based on the final valuation, not just cost or GDV, and our in-house underwriting ensures a fast process, often within days, so you can refinance or repay as soon as practical completion is achieved.

How did the pandemic influence the housing market?

The pandemic paused many transactions as viewings and valuations ground to a halt during national lockdowns in early 2020, causing a sharp drop in mortgage activity and transactions. Once restrictions lifted, pent-up demand and stimulus measures like the Stamp Duty holiday drove a dramatic rebound in property buying.
At the same time, developers faced significant delays. Nearly 43 percent of UK construction sites halted in the first six weeks of lockdown, creating supply chain issues and pushing back delivery schedules. As the market adapts, investors are increasingly focusing on transport connectivity and flexibility over size, reflecting reshaped consumer priorities since COVID.

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