BL00051-54 Development Site, Great Harwood

I'm not a fan of the loans with cashback. BL00046 shows what can happen to the SM for such loans, making it less liquid.

I like the fact COL state the LTV ratio based on the site value and not the Gross Devt. Value.

One comment - I note that the VR (and COL website) states the property comprises 2.2 acres of development land. The planning decision notice states the site is 2.29 hectares (which is 5.6 acres approx.). Quite a difference. Which is it???

However the bottom line here is that the site has planning permission for the erection of 42 dwellings (no 'affordable' housing required).

I'm always sceptical of explanations as to why a site has been acquired at such a low figure compared with the stated Market Value (especially when I consider it quite likely that residential land values will fall back in the next few years).

However this is a proper site with planning for resi devt. and with 6 months interest and cashback retained, I'm already into all 4 tranches. 

I'm ignoring the GDV - a brick may never be laid - I'm looking only at the site value as existing, the security we have in place. The loan is £845,000 (65% of the valuation of the site) split into 4 smaller tranches, and even if the valuation of £1.3m is strong, there's still a bit of leeway.

Anyone know what the going rate for resi devt land with planning is in this area, per acre or ha?

shame they dont only get the bonus if they hold it for full term.

Careful what you wish for!

Collateral Rep

I wonder if you can double check the site size with the valuer?

* I note that the VR (and COL website) states the property comprises 2.2 acres of development land. The planning decision notice I found for the site and same 42 home development states the site is 2.29 hectares (which is 5.6 acres approx.). Quite a difference.

I would have thought that fitting 42 houses on a 2.2 acre site would be a bit of a tight squeeze and wondered if the valuer has got his acres and hectares mixed up, and you have, through no fault of your own, transferred that error onto the loan particulars? Probably not, but the thought entered my mind.

I'm trying to work out what the site valuation equates to in terms of £ per hectare, because land values derived from residual valuations are very sensitive to small changes in the variables used and I prefer to look at it in terms of £ per hectare.

I've already invested a bit in all 4 tranches but have further funds standing by if I can be more satisfied on the valuation aspect.

To put it another way, if this is a 2.2 acre site as stated, the valuation of £1.3m equates to close to 600k per acre or £1.5m per hectare which seems a bit high for this part of the country, but then I'm not familiar with the area.

EDIT - Forget this COL. The question has been answered.

THe VR/Col is correct according to the auction listing. The site is 2.26 acres or .92hectares.  Looking at Google maps and the site plan its a 100m x 100m square when you use the lumps to fill the cut outs.

Edit. There is an error in the planning officer's report as it says 42 homes on 2.29ha giving a density of 45 homes per hectare which is clearly only true if the area is less than a hectare.

The application seeks permission for the erection of 42no, 3 and 4 bedroomed homes on a site of 2.29ha, which gives an average density of 45 homes per hectare.

The houses themselves occupy less than 50% of the area.