Avamore Capital has provided a £1.47m development finance facility for a residential project that was already substantially advanced when the borrower sought refinancing. The transaction required the lender to assess work already completed and estimate remaining costs amid several complications.
The deal involved stepping into a development mid-construction, which required detailed evaluation of outstanding work and associated costs. During the underwriting process, the building control company entered administration, adding complexity to compliance assessments and requiring alternative arrangements to ensure the project could proceed without delays.
Cost reconciliation challenges
Build cost discrepancies emerged during due diligence, necessitating detailed review and reconciliation with appointed professionals before the facility could be structured. George Ormerod, relationship manager at Avamore Capital, said the transaction demonstrated the firm’s capacity to support projects requiring certainty despite on-site challenges.
“The key to this transaction was reconciling the build cost variance and ensuring the remaining works were fully understood and appropriately risk-assessed,” Ormerod said. “By engaging proactively with the professional team, we were able to structure a facility that gave the borrower clarity to proceed with confidence.”
Part-complete development finance deals have become more common as developers seek to refinance residential schemes at various stages of completion. Such transactions typically require adaptive underwriting approaches and coordination between multiple stakeholders, including developers, contractors, and building control authorities.
Market context
The deal adds to recent activity in the development finance sector, where lenders have been providing facilities for projects ranging from commercial conversions to new residential schemes. The ability to assess and finance part-complete developments has become increasingly relevant as some projects face delays or require alternative funding arrangements mid-construction.
The transaction reflects the technical requirements of financing developments at advanced stages, where establishing accurate valuations of completed work and remaining costs becomes central to structuring viable facilities. The involvement of professional teams in reconciling build costs and compliance requirements proved necessary to finalise the arrangement.
