shshsh
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Post by shshsh on Feb 15, 2016 11:10:15 GMT
I posted a question on the Q&As bit of the site as to why the valuation says there is very little chance of planning permission outside Biggleswade but the purpose is re-purposing for non-agricultural purposes.
Valuation document -
"West Sunderland Farm is located outside the settlement boundary of Biggleswade...
In our opinion, based on the current local plan policies and the site allocations fulfilling
the local housing need, there is a very low chance of obtaining non-agricultural
planning consent on the land adjacent to Biggleswade."
Overview - "This is a strategic land masterplanning project to re-zone the usage of the land from agricultural to multi-purpose residential and commercial development."
Perhaps I am misreading something. Anyway the valuation has been done on current market value.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 15, 2016 11:43:31 GMT
I posted a question on the Q&As bit of the site as to why the valuation says there is very little chance of planning permission outside Biggleswade but the purpose is re-purposing for non-agricultural purposes. Valuation document - "West Sunderland Farm is located outside the settlement boundary of Biggleswade... In our opinion, based on the current local plan policies and the site allocations fulfilling the local housing need, there is a very low chance of obtaining non-agricultural planning consent on the land adjacent to Biggleswade." Overview - "This is a strategic land masterplanning project to re-zone the usage of the land from agricultural to multi-purpose residential and commercial development." Perhaps I am misreading something. Anyway the valuation has been done on current market value. You’re not misreading. I also pointed it out in my summery in the other post. I think it is important to remember that this is a bridging loan; it's a short-term funding option used to bridge a gap between a debt coming due and line of credit becoming available. The planning permission doesn’t really come in to it, as this is a long term prospect which the borrower hopes will bear fruit. In any case it would be unlikely that any PP would be granted within year (the term of the bridging loan). The Valuation of the land is ‘as is’ (i.e. without any planning), and that’s what is important in a bridging loan. The generous valuation and as such the 70% LTV is what concerns me.
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ablender
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Post by ablender on Feb 15, 2016 12:30:24 GMT
A question to savingstream . We know that there are people who game the system, but apparently gaming can come from both sides. I am curious why tranche C has a [loan] value of £1,001,000.00. Is this so that it has a value of more than £1million and does avoid the bottom-up assignment? Edit: I added the word loan as that is what I am referring to. Cheers. |
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webwiz
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Post by webwiz on Feb 15, 2016 12:32:57 GMT
Since all 4 tranches are being released at the same time what is the point of having the land split into tranches?
What are the considerations in deciding pre-funding levels? Ask for your desired total in one tranche and leave the others at zero? Split your desired amount equally between the four? Split it equally between the two smaller tranches? Or.....?
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 15, 2016 12:34:32 GMT
A question to savingstream . We know that there are people who game the system, but apparently gaming can come from both sides. I am curious why tranche C has a value of £1,001,000.00. Is this so that it has a value of more than £1million and does avoid the bottom-up assignment? I will let savingstream answer if they want; but I think they just took the tranche valuation for the from the valuation document and calculated 70% of that value 70% of £1,430,000 = £1,001,000
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webwiz
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Post by webwiz on Feb 15, 2016 12:40:12 GMT
A question to savingstream . We know that there are people who game the system, but apparently gaming can come from both sides. I am curious why tranche C has a value of £1,001,000.00. Is this so that it has a value of more than £1million and does avoid the bottom-up assignment? I doubt that SS will too worried about allocations, they are more likely to be wondering if the loans will all fill. The figure of just over £1m is the loan not the valuation which is £1.43m and the loan is derived from that at 70% so I very much doubt that SS are playing games.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Feb 15, 2016 13:05:22 GMT
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Post by dodgeydave on Feb 15, 2016 13:29:39 GMT
Sorry posted after ilmoro replied
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Post by Deleted on Feb 15, 2016 13:55:52 GMT
Not so sure about the exit strategy here, which is stated as gain planning, development finance then sale
However the valuation surveyor mentions that, ' there is a very low chance of obtaining non-agricultural planning consent on the land adjacent to Biggleswade '
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SteveT
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Post by SteveT on Feb 15, 2016 14:25:16 GMT
Anyone that buys farmland for sale at normal arable land price / acre with the hope of gaining PP for residential development must know it will be a very long bet. If there was any short term likelihood of the land being reclassified for development then the price / acre would be 5-10x higher (at least). Over the likely term of the SS loan, this is a farm, nothing more, nothing less.
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paulg
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Post by paulg on Feb 15, 2016 14:49:32 GMT
Anyone that buys farmland for sale at normal arable land price / acre with the hope of gaining PP for residential development must know it will be a very long bet. If there was any short term likelihood of the land being reclassified for development then the price / acre would be 5-10x higher (at least). Over the likely term of the SS loan, this is a farm, nothing more, nothing less. Any application for PP residential development would take more than 12 months to process, so how will they repay the loan at the end of the 12 month term?
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SteveT
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Post by SteveT on Feb 15, 2016 14:55:27 GMT
Anyone that buys farmland for sale at normal arable land price / acre with the hope of gaining PP for residential development must know it will be a very long bet. If there was any short term likelihood of the land being reclassified for development then the price / acre would be 5-10x higher (at least). Over the likely term of the SS loan, this is a farm, nothing more, nothing less. Any application for PP residential development would take more than 12 months to process, so how will they repay the loan at the end of the 12 month term? I presume the buyer is a HNW developer / speculator with multiple holdings. As soon as one scheme gains PP then much greater funding can be raised against it to help fund other borrowings (the Hemel scheme being a case in point). Bottom line is that this farm could be resold as a farm if other finance wasn't forthcoming so that's the scenario I'm lending against.
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Post by Deleted on Feb 15, 2016 15:09:59 GMT
Any application for PP residential development would take more than 12 months to process, so how will they repay the loan at the end of the 12 month term? I presume the buyer is a HNW developer / speculator with multiple holdings. As soon as one scheme gains PP then much greater funding can be raised against it to help fund other borrowings (the Hemel scheme being a case in point). Bottom line is that this farm could be resold as a farm if other finance wasn't forthcoming so that's the scenario I'm lending against. That's a pretty large presumption - good if its true. Would definitely be more interested in this loan if that was the case, perhaps Saving Stream will enlighten us.
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am
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Post by am on Feb 15, 2016 15:12:18 GMT
Anyone that buys farmland for sale at normal arable land price / acre with the hope of gaining PP for residential development must know it will be a very long bet. If there was any short term likelihood of the land being reclassified for development then the price / acre would be 5-10x higher (at least). Over the likely term of the SS loan, this is a farm, nothing more, nothing less. I can't believe that the interest rates they are paying are sustainable on the income from the farm. It won't take all that much of an overrun to eat away the margin on the security. So I want to know what the exit strategy is.
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ablender
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Post by ablender on Feb 15, 2016 15:16:00 GMT
Anyone that buys farmland for sale at normal arable land price / acre with the hope of gaining PP for residential development must know it will be a very long bet. If there was any short term likelihood of the land being reclassified for development then the price / acre would be 5-10x higher (at least). Over the likely term of the SS loan, this is a farm, nothing more, nothing less. I can't believe that the interest rates they are paying are sustainable on the income from the farm. It won't take all that much of an overrun to eat away the margin on the security. So I want to know what the exit strategy is. If it is a developer, like SteveT suggests, and I think he is right otherwise I do not think that a farm owner would need a loan from SS, we are not looking at the income from a farm but the income from all his investment.
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