18-unit scheme, Leicestershire
Sales covenant required 50% of units sold by month 6. Achieved 40%. Rate stepped up to 0.90% pm for subsequent months. Extended 3 months. Final hold cost ~20% above base-case.
Outcome
Sales covenant breached, rate stepped up.
Sales covenant required 50% of units sold by month 6. Achieved 40%. Rate stepped up to 0.90% pm for subsequent months. Extended 3 months. Final hold cost ~20% above base-case.
What the numbers show
Over an actual hold of 14 months at 0.75% per month, monthly interest on a £4.5m facility runs to about £33,750 each month. Add a 1.5% arrangement fee of £67,500, and the estimated all-in cost is roughly £540,000 — about 12.0% of facility. That excludes valuation, legals, and any extension or step-up costs where applicable.
Related case studies
- 12-unit residential new-build, Camden — Conventional mid-market scheme. Strong area, conservative pricing, fast sales velocity. Exit finance beat the extended senior tail by £78k over the 9-month actual hold.
- 9-unit heavy refurb conversion, Brighton — Slower sales market than modelled. Extended facility twice. Pricing stepped up from 0.82% pm to 0.92% pm for the final 3 months.
- 24-unit BTR scheme, Leeds — Sold the entire block to a single institutional buyer after 5 months. Repaid early with no ERC. Would have been cheaper to stay on senior + block sale direct, but certainty of execution was worth the premium.