INSTANT UNDERWRITE PROPOSAL

HOW IT WORKS

“Everything should be made as simple as possible, but not simpler”

 

This quote is attributed to many great thinkers, notably Einstein, whilst there may be debate around who said it there is no debate around the statement itself. We understand that development and financing is already a complex area with many moving parts and a range of uncertainties. Our sales guarantee cuts through many of these simplifying the process for all involved.

So how does it work? 

  1. An interested party – typically a developer, lender or finance broker – will generate an instant underwrite through our online engine. This proposal will detail the sales guarantee as well as demonstrating expected improvements in returns and reductions in equity input.
  2. An LDS surveyor will engage with the developer, their lenders and advisors to review the full details and instruct lawyers.
  3. LDS will exchange contracts pre-construction guaranteeing to acquire all units on a site at a set price. We will pay over 10% of the contract price as a deposit which can be released to the developer or their lenders for their use.
  4. The developer will commence construction and open market sales. For each unit sold on the open market LDS will take a small underwrite fee for providing the sales guarantee.
  5. If there are unsold units at the end of the development cycle, or at any point in the process, the developer or lender can call upon LDS to complete.

 

Frequently asked questions

Please see below a list of questions we are regularly asked. If you have a question that isn’t on the list, we would be happy to answer it directly. Contact us today.


Around two minutes – click here to start.

On a typical £10m GDV scheme the improved outputs can be:

  • 78% reduction in upfront cash contribution
  • 186% increase in returns on cash invested
  • 10% cash deposit released on exchange
  • 91% Loan to Cost

There are also many other benefits, including:

  • Increased access to finance on improved terms
  • Ability to acquire larger or multiple sites from the same capital base using LDS
  • Reduce or remove personal liabilities

Get in touch with our Head of New Business John Fletcher today to find out more.


Guaranteed pricing and exit timings for sitesRemoves all speculative risk, immediately improving credit profile and ability to lend

Ability to offer more competitive terms, without increasing risk, leading to more business written

LDS provide 10% unsecured zero coupon cash deposit, which can be released into the transaction at exchange. This has a transformative effect on viability, closes equity shortfalls and converts marginal proposals to much more attractive ones

See our wider list of benefits here.


Increases conversion rate, allowing more business to be written, due to removal of speculative elementsLDS can release 10% cash deposit at exchange reducing developer cash contribution and covering any equity shortfalls

Generate additional income. Our average broker introduction fee is £11,100 (Sept 2020).

Allows lenders to offer increased leverage and improved terms due to reduced risk with sales guarantee in place

Expedites application and credit process

Improves your margins by allowing more business to be written with less processing and administration time required


We have conducted extensive research to interrogate the pros and cons, working with developers, lenders and a host of professional advisors. In rare instances where a developer is not using debt and is funding a site entirely from their own reserves the benefits are not as strong. At the same time, the use of a sales guarantee should still be compelling as the developer would have the entire site costs at risk without a lender.

The sooner we become involved the more benefit we can deliver. You do not need to own the site for us to provide you with a sales guarantee and financial projections. It is common for developers, lenders and brokers to involve LDS as part of their initial review process which is often before a site is acquired. A sales guarantee and its associated benefits can be the difference when reviewing sites for purchase or financing.

LDS are the only provider of Sales Guarantees in the market and have invested many years and devoted significant funds to bring forward the concept. There is no comparable offering and the use of Sales Guarantees is transforming how developers and lenders approach new sites.

LDS is part of Landmark Group, which is into its third decade of investing under our founder and CEO. The Group and CEO place an immeasurable amount of value in our well-earned reputation as reliable and straightforward investor partners. Our core portfolio consists of over 20,000 ground rent assets which produce consistent cashflows, we expect the value of this portfolio to exceed £150,000,000 by late 2020. We have substantial financial resources and always ensure all participants are comfortable before entering into any transaction.

We will pay a 10% cash deposit upon exchange, which can be released to the developer for their use i.e. £10m price = £1,000,000 cash release. We are part of the Landmark Group, which is into its third decade of business and has a faultless track record of performance.

We can allow our 10% cash deposit to be released at exchange, which has a transformative effect on viability. In addition, we work with a number of lenders and brokers, who are well versed in the benefits of LDS, so can make the introduction should you require.

Yes, our average fee is around £11,100 (September 2020). Please get in contact to discuss any introductions you would like to make.

The Sales Guarantee is simple, and each unit will have one of two outcomes. If a unit is sold on the open market LDS take a small fee at completion for providing the guarantee. If LDS acquire then there is no cost for this service. All other costs will be borne by each party.

We are interested in housing schemes, although will consider a small number of apartments as part of a larger site. We generally look at schemes of 15-60 units (excluding affordable) with a GDV between £3,000,000 – £20,000,000. There is some flexibility so please feel free to contact us with anything outside of these parameters for discussion. Get an instant Sales Guarantee proposal today here.

In the first instance, when using our online Sales Guarantee engine [link], we will take the developer’s anticipated values as the start point. If the site is looking to progress, we will complete our own due diligence to confirm the values as well as considering any professional valuation carried out for lenders. There is only one property market therefore the figures we derive are generally in line with the developer projections.

We do not take a charge over the site as it can interfere with lenders’ security. Our contract would be registered, as is standard for any potential purchaser.

We understand that post-PC is often the best time to sell and wanted to ensure developers retained the benefit of this. The run-off period gives the developer a generous period post-PC to dispose of any remaining units. At anytime within this period the developer can call upon LDS to complete on unsold units and exit the site.

Our sales guarantee is for the site. So, in the unfortunate event of a default, the lender would be able to maintain the benefit of the sales underwrite which should expedite their exit in default.

We would look to retain as long-term investments on a rental model basis. Our wider Landmark Group owns a large and constantly growing investment portfolio so is always ready, willing and able to acquire further stock.

Simply serve us a completion notice, exactly the same as any other sale.

Yes, the LDS Sales Guarantee doesn’t interfere with Help-to-Buy which we encourage all our developer partners to sign up for.

Yes. As we have been active in the market for so long, we have developed an enviable network of trusted contacts. We regularly work with our developer partners to assist them in sourcing opportunities where we then provide a Sales Guarantee.

We are often compared to an insurance policy as we protect against risk, although our process is much simpler to use. If a developer has unsold units at any point in the process, they simply call upon LDS to complete which is legally binding under the guarantee.

Our Requirements

  • Housing schemes (small element of apartments considered)
  • All locations in England & Wales considered
  • 15 - 60 units per scheme or phase
  • Typical GDV levels of £3,000,000- £20,000,000

Get an INSTANT sales guarantee today with our online engine

INSTANT SALES GUARANTEE
“The use of LDS allows developers to get on site and off site quicker, meaning more stock is developed and profits generated.”

The Management Team

  • Mark Hawthorn
    Mark Hawthorn
    CEO

    Mark has been involved in property and investment all of his working life, starting at 16 back in 1997. Mark established Landmark Investments in 2000 and Landmark Development Solutions later on.

  • Ben Ogunby
    Ben Ogunby
    Acquisitions Director

    Ben began his career in property as an estate agent in 2001. He ran the acquisitions function within a number of investment property companies, before a chance meeting in 2007 with CEO Mark Hawthorn led to Ben joining the Landmark Group as Acquisitions Director.

  • Andrew Savage
    Andrew Savage
    Finance Director

    Andrew is an experienced finance director with over 15 years’ expertise in the housebuilding sector at both PLC and large regional level.

  • David Lathwood
    David Lathwood
    Non-Executive Director

    David is chairman of Jones Lang LaSalle. He is responsible for providing advice upon major development opportunities across the North West and has acted as ‘Lead Advisor’ to a number of public and private sector bodies on disposal, acquisition, development strategy and structuring such as Shell UK, Astra Zeneca and Warburtons over a period of 25 years.

  • Steve Nobes
    Steve Nobes
    Non-Executive Director

    Steve is an experienced director in growth, disruptive or unique businesses. Having worked with both John Caudwell (Phones 4u, Caudwell Group) and Noel Mckee (webuyanycar & BCA) he was a proven CFO with a track record of generating billions in stakeholder value. Steve also sits on the board of private equity backed fintech businesses as either NED or Chair.

  • John Fletcher MRICS
    John Fletcher MRICS
    Head of New Business

    John is an MRICS Professional with over 15 years’ experience in Commercial, Residential, land and property. Prior to joining LDS he led and helped a multi-disciplined property agency grow into being a large regional business employing over 100 people. As Head of New Business for LDS, John originates and progresses new opportunities to exchange of contracts alongside lender and developer clients.

Get an INSTANT sales guarantee today with our online engine

INSTANT SALES GUARANTEE
Do NOT follow this link or you will be banned from the site!