Glossary of terms
Our language, explainedGlossary of Terms
Acquisition Costs |
Incidental costs associated with securing ownership of real property such as agent commissions, mortgage application fees, professional fees and stamp duty. |
Construction Costs |
The total cost of building a real estate project. |
Broker Fee |
A fee, usually charged as a percentage of the overall project cost, for introducing the client/project. |
CIL/S106 |
CIL means Community Infrastructure Levy – this is a contribution for community ground upkeep/doctors/playgrounds/lamp posts etc etc. S106 is a council enforced payment for housing support. This is often in the form of affordable housing on the site, but sometimes the council will defer it to a payment. |
GDV |
Gross Development Value (end value of project) |
Equity |
The money/profit in a project. |
First and Second Charges |
First charge is the first or primary debt against a property. The Second charge is the second charge on the property and sits behind the First. Therefore, it is more risky to have a second charge as you have less control over the security. Second charge lending is often more expensive due to this risk. |
Joint Venture |
An agreement between two or more parties to undertake specific business venture or economic activity together. |
Land Bank |
A stock of land held by a developer with the intent to hold it for future development or until such a time as it is profitable to sell on to others. |
LTV |
The Loan to Value is a ratio term to express how high you will lend against a property value. |
Pre-Sale |
Signing a contract to commit to purchase land or property that is yet to be developed. (Alternative names: Exchange, Sell Off-the-plan) |
ROCE’s |
Return on Capital Employed – this is the percentage rate return we get from an investment. |
Professional Fees |
Fees paid for work done by a professional such as an accountant, solicitor, architect and so on. (Alternative name: Consultant Fees) |
PDR |
Permitted Development Rights – this is a form of planning approval that doesn’t require a formal planning permission application. |
PG’s |
Personal Guarantees – this is a binding agreement which would allow us to legal pursue a client for losses if we can not cover the losses from the target property security. |
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