When dev-exit beats dev
- Practical completion reached but unsold units remain.
- Dev facility nearing term and would attract penalty interest or extension fees.
- Sales velocity slower than original assumption; need 6 to 12 months to clear stock.
Decision aid
If dev facility costs 9.5 percent annualised and dev-exit costs 8 percent annualised, refinancing 6 months earlier saves roughly 0.75 percent of facility on the residual stock. Net of arrangement fee 1 percent on the new facility, breakeven is roughly 9 months hold.
When to hold for rent instead
If achievable gross yield exceeds 6 percent and the long-term BTL re-finance comes in below 5.5 percent, holding for rent and refinancing as BTL beats dev-exit on a 24-month view.