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Octopus adds development finance product to range

by: Rosie Taylor
  • 03/07/2017
  • 0
Octopus adds development finance product to range
Octopus Property has launched a new, cheaper residential development product with a low exit fee.

Prices start from 0.54% for loans up to 60% loan-to-gross development value (LTGDV), 0.66% for loans up to 65% LTGDV and 0.83% for loans up to 70% LTGDV.

The exit fee of 1.00% is charged on the gross facility amount rather than on the gross development value (GDV).

It is the latest new product in Octopus’s biggest rates overhaul since 2009, as it aims to provide a more comprehensive range to borrowers in a bid to disrupt the mainstream finance market. Traditional lenders are continuing to be cautious despite increasing demand for finance from smaller housebuilders as the government tries to reach its target of building one million new homes by 2020.

Emma Burke, head of development origination, Octopus Property, said: “We can now offer developers lower rates to reflect lower leverage requirements and structure flexible loan facilities to reflect the varying complexities of each scheme.”

Mario Berti (pictured), head of Octopus Property, added: “We’ve always been firm supporters of the residential development sector and feel it is the right time to broaden our range, with the market opportunity for higher LTVs at a competitive pricing point being driven by the well-publicised UK-wide housing shortfall.”

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