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The Client’s Initial Challenge
Our client was developing a ground-up four-bedroom detached house in a highly desirable part of Chalfont St Giles, Buckinghamshire. The scheme had strong end-value potential, where maximising value depended on presentation and timing, not speed.
To fund the construction, we provided a standard development loan of £700,000 against a GDV of £1.4m, priced at 1% per month. The facility was structured at around 50% LTGDV, a deliberate decision that gave the client flexibility around their exit.
The original facility ran for 15 months, covering the build through to completion. However, as the project progressed, it became clear that staying on the development loan after completion would force a quick sale and limit the final price.
The Magnet Capital Approach
Rather than allowing term pressure to dictate the outcome, we reviewed the exit strategy before it became an issue.
As the project approached practical completion, we refinanced the original development loan onto a development exit facility. This repaid the original development loan in full, including accrued interest, and gave the client a further 12 months to sell the completed property.
The new facility reduced the interest rate from 1% per month to 0.89% per month.
The Power of Partnership
By moving onto a development exit facility, the client had more time and a lower interest rate, allowing the property to be properly staged and marketed. This supported a targeted sale price of £1,750,000 – £350,000 higher than would likely have been achieved under the original development loan.
Early exit planning and the low LTGDV meant the client avoided unnecessary extension fees and the pressure of a rushed sale. Instead, the refinance provided a planned, cost-effective transition from build to sale.
The original introducing broker was honoured for the development exit facility, reinforcing the value of long-term collaboration.
Most importantly, the client retained control over the sales strategy and maximised the project’s value, benefiting from a lower-rate, post-completion solution that delivered a materially stronger outcome.
