Finance for Airspace Development
Introducing you to the right lenders to maximise your planning gainSpeak to one of our experts020 3318 2613
Fund entire project
- 1 to 60 months
- £25,000 – No Maximum
- Staged funding
- Major construction and redevelopment
Choice of Funding
- Interest only
- Interest roll-up
- Up to 90% of the Gross Development Value or GDV
- Planning gain transactions our speciality
- Residential and commercial
- Property purchase and work
- Legal and architect fees
- Expert Support throughout
Talk to Rangewell – the business finance experts .
We know every property lender in the market and can help you find the funding you need for airspace developments.
At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.
Finance for Airspace
When you own the freehold of a property in the UK, you legally own the bricks, mortar, - and the ground it stands on. But you also own the airspace, the area above the roof. It could provide an opportunity for development.
You have a right to enjoy the lower stratum of airspace immediately above your property. For practical reasons - and to avoid legal problems with aircraft, this is usually restricted to between 500 and 1,000 feet above your roof space level. This prevents your neighbours erecting overhanging eaves or even advertising hoardings over your home. But the possibilities don’t end there.
In big cities where building land is simply not available, this untapped space is now being explored for its development potential. It is believed that by making use of existing flat roofs in London alone, there would be sufficient room for around 180,000 new homes.
The idea of airspace is already well established in other locations. In London, for example, airspace is worth an average of £176 a square foot.
A relaxation in development rights means that homeowners may be able to add two storeys to a detached property under permitted development rights without needing additional planning permission.
If you have a suitable property you may be able to sell the airspace to a property developer, to build penthouses or flats. Alternatively, if you are a developer yourself, you may be able to buy the airspace above commercial buildings or existing blocks of flats and build new homes.
But there will be substantial costs involved. Property a suitable structure to sustain extra loading and with roof space suitable for development could demand between £1,000 and £2,000 per square metre in the suburbs and as much as £7,000 at the top end of the market in Kensington and Chelsea.
Getting the funding you need
The concept of selling airspace is new, and many lenders will have little familiarity with the concept. At Rangewell we can help you find those lenders who are able to look into the new and promising area, and provide development funding.
Most airspace projects will require heavy refurbishment or development funding.
Heavy refurbishment mortgages allow experienced property developers and investors to fund both the purchase of a property needing work or with potential for extension, and the funds to carry out the work required. The work may include conversion of a single building into multiple letting units, such as self-contained flats or a home capable of major extension above the existing roofline.
.With heavy refurbishment, the lender will want to see a schedule of works. This is a detailed breakdown of the work and costs involved in the project, together with projected timings. A valuer will comment on whether the intended budget is realistic and if the time scale is achievable.
Lenders may also want to see evidence of your past projects, to ensure that you have the skills and vision to complete the work.
How refurbishment finance works
Refurbishment finance is based on the gross development value (GDV), the value of the project once completed. This is also known as the post refurbishment works value.
Loans may be available from £100k to £10m. Lenders may consider lending up to 70% of GDV, with funds released in stages. These funds may cover both the property purchase as well as refurbishment works, although funds may also be available for developers who already own a property in need of work.
Terms of up to 18 - 24 months are available, and interest payments may be rolled up in the total loan amount.
As with all property finance, there will also be fees:
Arrangement fees These are charged by the lender for arranging the loan and are typically 1.5% to 2% of the loan amount.
Exit fees Not all lenders apply exit fees - those that do may charge a percentage of the loan amount or,sometimes, the gross development value.
Valuation fees Lenders will instruct a surveyor to value the property both before and post refurbishment works. The scale of these fees will depend on the size of the project.
Property investment solutions from Rangewell
Call us now to get our experts working for you.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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