PRE-PLANNING FINANCE

To assist with the acquisition of a property that does not currently have planning consent for development or where the existing planning consent is to be enhanced.

This is a highly specialised form of property finance that requires the Bank and its professional advisors to have a detailed understanding of the planning process and the ability to take commercial decisions based on reliable and commercial advice. Pre-planning situations are never ‘black and white’.

It is difficult to set down clear criteria for this form of funding as every proposal differs greatly from situations involving "green field" sites that are zoned for development through to existing "brown field" properties where a change of use is required.

We will normally only want to fund situations where the borrowers are seeking a residential or predominantly residential consent. In the event that planning consent is obtained we would be happy to consider providing the development finance if the borrower wants to undertake the scheme.

Various issues need to be taken into account to include:

• The experience of the borrowers in such specialised transactions
• Feedback from the relevant planning authority
• The level of funding required set against the "base" value of the property.

LENDING CRITERIA

As a guide, we will normally consider lending up to 50% of the cost or "base" value of the site (whichever is lower) on our standard pricing terms with any amount that we are prepared to lend in excess of this treated as mezzanine debt and priced accordingly.