Development Exit — 24 Houses
Wakefield

A developer had completed a scheme of 24 houses on a former industrial site in Wakefield. The build was finished and 16 units had sold, but 8 remained unsold due to a softening in the local market. The original development facility — £2.8m from a specialist lender — was reaching its term end in 6 weeks. The developer had also gone £400k over budget on groundworks after unexpected contamination was discovered during the build. The development lender wanted their money back and was threatening default interest at 3% per month.

The developer was caught between a rock and a hard place. The remaining 8 houses were worth an estimated £1.8m at current market prices, but selling them quickly would mean accepting below-market offers. The development lender's outstanding balance was £1.4m after the 16 sales, and the default interest clock was about to start ticking. The developer's own cash reserves were depleted by the budget overrun, so there was no equity to inject. Any new lender would need to be comfortable stepping into a part-sold scheme with a developer who'd gone £400k over budget.

We structured a development exit bridge at £1.4m to repay the original development lender in full before default interest kicked in. The security was the 8 remaining completed houses valued at £1.8m, plus a parcel of adjacent land the developer owned separately, which brought the overall LTV to 65%. We found a lender from our panel who specialised in dev exit situations and understood that unsold units on a completed scheme are a very different risk profile to a mid-build project. The facility was structured with a 12-month term and part-redemptions allowed — so as each house sold, the loan reduced proportionally. We also negotiated no minimum interest period, meaning the developer saved money on every early sale. Alongside the bridge, we also secured terms for a stabilised long-term facility to exit the short-term bridge — giving the developer a guaranteed refinance route if any units remained unsold at term end. This removed the pressure to accept below-market offers and gave complete certainty on the exit.