Development Finance

A short-term funding for the development of residential.

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What is Development Finance?

Development finance is short-term funding for the development of residential, commercial or mixed use property. From land purchase & build developments to property renovation, refurbishment  & conversion projects. The amount lent and the term of the loan will depend on a professional estimate of end/finished value and realistic timescale for completion of works.

Development finance is usually made available to experienced builders & developers with a track-record of successful activity. First-time developer finance is available, however, subject to a sound project that values up and a meaningful contribution to the project cost. Exit strategy is a crucial part of the lender appraisal : how will the loan be repaid at completion? (sale, short-term refinance, e.g. bridging, or long- term refinance, e.g. term loan or mortgage).

A detailed project appraisal will be needed at application stage : cost or value of land or property, build or renovation costs, likely completed value, timescales to complete work, planning permission & building regulations, c.v. with detail of previous projects undertaken, etc. Every development project is different and lenders will assess proposals for finance very much on an individual basis and set terms & pricing relative to risk. As a very broad guideline :

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Indicative/Typical Terms

  • Rates: from 7% for larger quality propositions
  • Max LTV : up to 65% of land/land & buildings cost & up to 100% development costs, subject to max 70% GOV (Gross Development Value)
  • Min/Max loan: £100K to £10 million
  • Drawdown of funds: usually in stages, subject to surveyor or architect’s sign off certification
  • Loan term: 1-24 months
  • Roll up of interest : yes
  • Repayment: from sale or refinance of property
  • Security: 1st legal charge over land, residential or commercial property
  • Fees: arrangement fee from 1%, exit fee from 2%
  • Other fees: legal & valuation fees
  • Personal guarantees: dependent on risk/strength of proposal
  • Loan purpose: land purchase & build costs; land & building purchase & renovation/conversion/refurbishment costs
  • Credit underwriting: weaker cases/credit unlikely to be approved


We can help you source the best finance package from our wide panel of lenders and smooth out any creases along the way. Call us for a confidential chat.