Apartments — Isle of Man

Our client — a first-time developer — had found a former guesthouse on the Isle of Man with planning permission for conversion into 4 self-contained apartments. The purchase price was competitive and the local market showed strong demand for quality apartments, supporting a projected GDV of £1.2m.

The challenge? Most mainstream development lenders don't lend on the Isle of Man. It's a Crown Dependency with its own legal system, land registry, and property law. The client had no development track record, and the project needed to work on tight margins.

Three factors made this difficult: the location (Isle of Man has a tiny pool of willing lenders), the developer's experience (first project), and the margins (around 20% profit on cost — viable but not generous).

Many lenders we approached either couldn't lend in the jurisdiction or wouldn't consider a first-time developer at that margin level. The legal framework required specialist local solicitors, adding another layer of complexity.

We identified a specialist lender with experience of Crown Dependency lending who was comfortable with first-time developers — provided the application was properly structured and presented. We helped our client appoint an experienced local QS and a contractor with a proven track record in similar conversions.

We prepared a detailed development appraisal and business plan with conservative GDV assumptions supported by local agent comparables, and presented the project and borrower in the best possible light — highlighting the contractor's experience as a mitigant for the developer's inexperience. The quality of the presentation gave the lender confidence to commit at competitive terms.

Facility of £726,000 secured at competitive terms. The conversion completed on programme and within budget. All 4 apartments sold within 3 months of completion at values in line with the appraisal, achieving the projected £1.2m GDV.

The client has since completed a second development — this time with a track record, better terms, and the confidence that comes from a successful first project.