Reduce cash input, increase output and returns.
- 10% LDS deposit is interest free and reduces project cash input.
- Build up to 3x more new homes.
- Increase returns by over 3x.
Reduce deal risk, increase deals done.
- Guaranteed exit removes sales risk in all market conditions.
- Increase lending to new and existing borrowers.
- Maximise the opportunity by creating a joint product.
Increase conversion, increase fee income.
- Increase conversion by offering increased leverage and quick completion process.
- Earn additional fees from LDS.
- Simpler, interest free alternative to mezzanine.
LDS was launched with a clear purpose: to empower SME housebuilders to build more new homes.
Why are we needed?
For the government to hit its target and build 300,000 new homes per year, increased access to finance for SME housebuilders is key. LDS created the Sale Guarantee to assure lenders and housebuilders that LDS will acquire any unsold homes on a site. On exchange, a 10% cash deposit is released into development cashflow, unsecured, and at zero coupon. This powerful combination has led to the LDS Sales Guarantee being embraced across the market.
The LDS Sales Guarantee is provided pre-construction. It assures the purchase of all unsold homes on a development site, then releases a 10% cash deposit on exchange. This removes sales risk, and improves lender credit profile, whilst also reducing developers upfront equity requirement. The unique combination of increased deal leverage and reduced deal risk is a powerful catalyst to new housing delivery across England and Wales.
The sooner we become involved the more benefit we can deliver. You do not need to own the site for us to provide you with a Sales Guarantee and financial projections. It is common for developers, lenders and brokers to involve LDS as part of their initial review process which is often before a site is acquired. A Sales Guarantee and its associated benefits can be the difference when reviewing sites for purchase or financing.
Our preferred criteria is:
- Houses and apartments (located outside of City Centres), across England and Wales
- 5-60 units per scheme or phase, with GDV levels of £1,500,000 – £35,000,000
- We can only guarantee open market sales and not affordable units, although we will require the details
If your site falls outside of these parameters, we may still be able to assist. Please contact us at info@LDSyoursite.com and we will review.
We do not take a charge over the site as it can interfere with lenders’ security. Our contract is registered, as is standard for any potential purchaser.
We can allow our 10% cash deposit to be released at exchange, which has a transformative effect on viability. In addition, we work with a number of lenders and brokers, who are well versed in the benefits of LDS, so can make the introduction should you require.
The Sales Guarantee is simple, and each unit will have one of two outcomes. If a unit is sold on the open market LDS take a small fee at completion for providing the guarantee. If LDS acquire then there is no cost for this service. All other costs will be borne by each party.
In the first instance, when using our online Sales Guarantee engine, we will take the developer’s anticipated values as the start point. If the site is looking to progress, we will complete our own due diligence to confirm the values as well as considering any professional valuation carried out for lenders. There is only one property market therefore the figures we derive are generally in line with the developer projections.
Our Sales Guarantee is for the site. So, in the unfortunate event of a default, the lender would be able to maintain the benefit of the Sales Guarantee which should expedite their exit in default.
We understand that post-PC is often the best time to sell and wanted to ensure developers retained the benefit of this. The run-off period gives the developer a generous period post-PC to dispose of any remaining units. At anytime within this period the developer can call upon LDS to complete on unsold units and exit the site.
Simply serve us a completion notice, exactly the same as any other sale.
LDS is part of Landmark Group, which is into its third decade of investing under our founder and CEO. The Group and CEO place an immeasurable amount of value in our well-earned reputation as reliable and straightforward investor partners. Our core portfolio consists of over 25,000+ properties approaching £200m in value. We have substantial financial resources and always ensure all participants are comfortable before entering into any transaction.
We would look to retain as long-term investments on a rental model basis. Our wider Landmark Group owns a large and constantly growing investment portfolio so is always ready, willing and able to acquire further stock.
We work with a vast number of lenders and we’re adding more all the time. Please contact us for details of our panel lenders and exclusive deals. Also, if you would like to discuss joining our lender panel or creating a bespoke product with a guaranteed exit then please contact Ben Jenkinson, Managing Director at LDS at ben.jenkinson@LDSyoursite.com.
LDS are the only provider of Sales Guarantees in the market and have invested many years and devoted significant funds to bring forward the concept. There is no comparable offering and the use of Sales Guarantees is transforming how developers and lenders approach new sites.
We have conducted extensive research to interrogate the pros and cons, working with developers, lenders and a host of professional advisors. In rare instances where a developer is not using debt and is funding a site entirely from their own reserves the benefits are not as strong. At the same time, the use of a Sales Guarantee should still be compelling as the developer would have the entire site costs at risk without a lender.
Yes, we pay generous introduction fees equivalent to 0.1% of the GDV of the proposed development. This usually means a broker receives the equivalent of 1.25% of our deposit amount. Please get in contact to discuss any introductions you would like to make.
Yes. As we have been active in the market for so long, we have developed an enviable network of trusted contacts. We regularly work with our developer partners to assist them in sourcing opportunities where we then provide a Sales Guarantee.
We are often compared to an insurance policy as we protect against risk, although our process is much simpler to use. If a developer has unsold units at any point in the process, they simply call upon LDS to complete which is legally binding under the guarantee.
We currently work with ICW, NHBC and Checkmate.
Proposal
An interested party – typically a developer, lender or finance broker – will generate an instant sales guarantee through our online engine. This proposal will detail the sales guarantee as well as demonstrating expected improvements in returns and reductions in equity input.
Liaise
LDS will liaise with the broker and/or developer completing all due diligence prior to issuing Heads of Terms and instructing lawyers.
Exchange
LDS will exchange contracts pre-construction guaranteeing to acquire all units on a site at a set price. We will pay over 10% of the contract price as a deposit which can be released to the developer or their lenders for their use.
Construction
The developer will commence construction and open market sales. For each unit sold on the open market LDS will take a small fee for providing the sales guarantee.
Completion
If there are unsold units at the end of the development cycle, or at any point in the process, the developer or lender can call upon LDS to complete.
