Channel Islands — Luxury Villas

An experienced Jersey-based developer had secured a prime coastal site with planning permission for six detached luxury villas. Each property would be finished to a high specification with sea views, targeting the upper end of the island's residential market — where individual villas in prime coastal locations regularly achieve £1.5m–£2.5m. Total development costs were approximately £8.7m with a projected GDV of £11.4m.

The developer approached several UK-based lenders directly and was declined by all of them. Jersey is a Crown Dependency — not part of the UK, not subject to UK property law, with its own Royal Court for property transactions and a fundamentally different conveyancing process. Most UK development lenders have no framework for lending in the Channel Islands and no appetite to create one for a single deal.

Lending in Jersey presents specific challenges that go beyond simple jurisdictional unfamiliarity. Property is registered through the Royal Court under a customary law system derived from Norman French law. Security is taken by way of hypothec rather than a legal charge, and the enforcement process follows a different path to anything on the UK mainland.

Valuation was another hurdle. The Jersey residential market is small and illiquid at the luxury end. Comparable evidence for villas in the £1.5m+ bracket is limited, and valuers need specific local knowledge to assess both market value and the realistic timeframe for disposal. UK-based panel valuers typically cannot provide this.

The developer also needed the facility structured to accommodate Jersey's distinct planning conditions and building control regime, which differ from the UK system in several material ways.

We identified a specialist lender with an established presence in the Channel Islands who had previously funded residential development in both Jersey and Guernsey. They had in-house legal capability for Jersey transactions and existing relationships with local valuers, which eliminated two of the biggest barriers.

We prepared a detailed appraisal using local comparable evidence gathered directly from Jersey estate agents, supplemented by historic transaction data from the Royal Court records. The development programme and cost plan were reviewed against the Jersey building control framework to ensure compliance.

The facility was structured at 62% loan-to-cost with staged drawdowns aligned to the construction programme. We negotiated individual plot releases to allow the developer to sell completed villas during the build phase, reducing peak debt exposure.

The £5.4m facility completed in just under four weeks from application. Construction progressed smoothly and the scheme reached practical completion in 15 months — one month ahead of programme.

The developer achieved strong sales results. Four of the six villas were sold off-plan during the construction period, with the remaining two selling within eight weeks of completion. All six sold at or above the projected GDV figures, achieving a combined GDV of £11.4m — a profit of approximately 31% on cost before finance charges. Total finance costs were £432,000 at an effective rate of 8.0% per annum. The developer is now progressing a second Jersey site with the same lender on improved terms, reflecting the established track record.