Finance for unsold new-build stock and standing units

What a stock lender checks before funding standing units

A stock lender is assessing a finished, saleable asset and a sound repayment route rather than a trading record, so the checks centre on the block, not the borrower. What they ask for is the completion certificate, the building control sign-off together with the building warranty, frequently an NHBC or equivalent cover note, together with a valuation of the remaining homes on both an aggregate and a per-unit basis. They study the absorption rate: how many units the scheme has sold per month, what is exchanged or reserved, and how many still stand unsold. Concentration is the swing factor, because a valuer applies an exposure cap where too many units sit inside one building, and the lender then discounts aggregate value accordingly. They confirm the security sits cleanly in the developer's SPV and that the marketing plan and pricing are realistic. Experience helps, but a debut developer can still be funded provided the scheme is genuinely finished and the repayment route holds up, since a lender weighs the exit far more heavily than the track record. We package the completion evidence, the valuation and the sales data and confirm the exit before the facility draws.

Sizing a stock facility when units are already exchanged

Unsold new-build stock finance is sized against the aggregate value of the standing units, indicatively up to 70 to 75 percent, with a haircut applied where a single building or core holds too much of the security. That concentration adjustment is the figure most developers underestimate: a valuer caps how much of one block can be counted at full value, so a scheme with its unsold homes spread across several buildings supports a higher advance than the same number bunched in one core. Exchanged and reserved units are handled separately, because their proceeds are near-certain and either net down the funding requirement or shorten the exposure the lender is asked to carry, which can lift the effective leverage on the genuinely unsold remainder. On day one the advance equals the gross loan minus the retained interest and the arrangement fee, and as homes complete the facility is released unit by unit against a shrinking pool. We model the aggregate value, the concentration haircut and the equity a facility frees ahead of any lender approach. These bands are illustrative, differ by lender and block, rest on principal sign-off, and are never an offer.

What a stock loan costs while the final units clear

A stock loan is priced for a completed block rather than construction risk, indicatively between 0.65 and 0.95 percent per month, with the position within that band set by the concentration in any one building and the strength of the exit. Budget for a lender arrangement fee, indicatively in the region of 1 to 2 percent of the facility, a valuation of the remaining homes on an aggregate and per-unit basis, both sides' legal costs, and on occasion an exit fee. Time is the biggest lever on the total, because interest keeps accruing for every month the facility is live, so a realistic absorption rate counts for more than hunting the lowest headline rate on standing stock that takes months to clear. Set against the cost is the value protected: holding the last plots to their proper price instead of discounting them into a forced block sale to meet a redemption date typically recovers far more than the finance costs. Our broker fee is set out in writing, we price the full cost stack over the expected marketing period, and we never claim an exclusive panel. each figure is a working model rather than an offer of finance.

Stock loan, portfolio buy-to-let or auction: choosing the route

At the tail of a scheme a developer has three honest routes for the standing units, and a stock loan buys the time to pick the right one rather than the fastest. A stock loan holds the block while the units sell individually at value, which suits well-located remainders that simply need marketing time, though interest accrues while they clear. A portfolio buy-to-let product suits units that let well, converting standing stock into an income-producing hold and refinancing the developer out of short-term debt onto investment term finance, at the cost of tying capital into rental assets rather than releasing it. A controlled auction suits stubborn concentration, a distressed-looking block or a hard redemption deadline, delivering a clean and dated exit but usually at a discount to open-market value. The right answer depends on location, the absorption rate and how much the developer needs the capital back. We model all three against the numbers so the decision is made on economics rather than on a looming development loan redemption date. The pillar page at /solutions/development-exit-loans/ sets out the wider development exit picture.