After being approached by the broker, LDS was ready to contract and release a 10% cash deposit three days later. The unsecured, interest free amount of £233,600 closed the shortfall on the site and protected EAM Development’s purchase.
About the developer
EAM Developments is a small property development company working in Norfolk that pride themselves on providing homes that are ready to live in. They work with the planning authorities to ensure their schemes fit or complement the local area. Each scheme is individually designed and ranges from individual homes, both detached and semi-detached, starter homes to family homes, property conversions and new builds.
The company has established good working practices with an Architect Firm and Consulting Engineer company whom they work with on each development. They also use principal local contractors and specialist suppliers which enables EAM to control costs, quality and progress. They work closely with two independent local Estate Agents to market the developments.
The company has completed and sold a number of small developments prior to this site.
The project
EAM Developments contracted to purchase the former Clover Social Club site in Wretton, Kings Lynn, which is a village community with a pre-school and primary school. It is approximately 6 miles to the town of Downham Market in West Norfolk where there is a regular rail service. The site measures approximately 2.966 acres and has full planning for 8 units, all of which are guaranteed by LDS. The scheme is in a semi-rural area and will benefit from views over adjacent fields, along with generous gardens and two of the plots benefitting from paddocks.
The mix of housing will be 4 x 3 bed detached, 4 x 4 bed detached. Internally the properties will be configured in a similar design, all houses have open plan kitchen diners with bifold doors to gardens, separate utility and ground floor WC. There is a separate living room with a focal fireplace incorporating a wood burner. Upper floors are similar – master bedrooms benefit from an ensuite with family bathrooms. The properties are to be completed to a high specification and each unit will have underfloor heating to ground floors with air source heat pumps.
The original forecast construction period was c40weeks.
How we helped
The company had contracted to purchase the development site but was left with a funding gap due to an unexpected valuation issue. The valuation put EAM Developments at risk of not being able to build the new homes and losing the £40,000 site deposit and other associated fees.
The company’s development finance broker, Westbourne CF, approached LDS to see if a Sales Guarantee could overcome the hurdles.
After being approached by the broker, LDS was ready to contract and release a 10% cash deposit to EAM Developments three days later. The unsecured, interest free amount of £233,600 closed the shortfall on the site and protected EAM Developments’ purchase. This allowed the housebuilder to complete the purchase without losing the deposit and fees.
We are so happy to be able to crack on and build these much-needed new homes. I learnt about LDS from my broker and quickly saw the benefits, the ability to use their 10% deposit and removal of sales risk brought to the transaction. They were ready to complete within days of instruction after receipt of valuation and I was extremely impressed with their flexibility and professionalism in the way they moved towards exchange of contracts so quickly. The release of deposit allowed me to move forward on a development I may not have been able to without the use of their deposit monies.
Mark and the LDS team not only provided an extremely good product that allowed a complicated and difficult transaction to complete but were also flexible in adapting their approach to accommodate a number of what seemed insurmountable last-minute hurdles. The product is exactly what the market needed and the understanding and creativity that Mark and the LDS team bring to a deal is invaluable. Without LDS eight households would miss out on the opportunity to live in these much-needed new homes.
Westbourne CF
We knew from first contact this site had to be processed as quick as possible. We prioritised resources internally, moving immediately to investment committee and sign off within 24 hours. Lawyers were in funds ready to contract on the Sales Guarantee within three days of first contact.
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