Development Finance

Development Finance

We arrange property development finance from £200k to £250m, funding both experienced and first time developers for site acquisition, ground up development, mixed-use schemes, heavy renovations through to change of use, conversions and lighter refurbishment projects.

Our finance specialists help package up your proposal so they achieve the best rates available to UK property developers, from private equity firms, specialist lenders, family offices & private investors.

We can achieve up to 100% LTGDV (loan to gross development value) with additional security and 100% of build costs. When you need to finance property development contact us first for a no obligation quote. We're ready to help.

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Our development finance service

  • Market-leading property development finance from £200,000 to £250m
  • Monthly interest rates from 0.44% pm with interest rolled-up options
  • LTGDVs up to 65% (up to 100% finance if additional collateral is available)
  • 100% Build costs
  • Terms up to 24 months

Development finance uses

Typically the finance we arrange is for residential, semi-commercial and commercial development.

Light refurbishment bridging loans:
Our property refurbishment loans are used for purchasing property such as residential property investments including uninhabitable and unmortgageable, financing permitted development, modernising, doer-uppers, property flips or buy-to-lets.

Heavy refurbishment loans:
Used for purchasing residential and commercial property investments and financing heavy refurbishment including: Change of use, HMO conversion, extensions, basement developments, roof top development, loft conversions, commercial to residential conversions & barn conversions

Development finance: 
Use for pre-planning finance, financing Land purchasesground-up development finance and development exit finance

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Land Bridging Loan

Land Bridging

Land bridging finance is a fast solution for financing land purchases with or without planning. It enables investors, developers and speculators seize time-critical opportunities such as purchasing Residential land, Commercial land, Agricultural land & Development land (including Brownfield sites).

Property Refurbishment Loans

Property Refurbishment Loans

Light and heavy property refurbishment bridging loans are typically used for completing work on residential investment properties such as: Loft conversions, Basement & Rooftop developments or Extensions. It can also be used for: Student Let, HMO, Hotel, Pub & Office refurbs. We can source up to 100% build costs.

Property Conversion Financing

Property Conversion

We arrange finance for all types of property conversions, from commercial to residential or mixed use schemes, but also includes the conversion of Offices, Barns & Outbuildings, Hotels, Warehouses, Utility Buildings into dwellings. This finance can cover purchase costs and 100% of build costs.

Ground Up Development Finance

Ground Up Development

Typically the finance we arrange is for residential development, but we can also source finance for semi-commercial and commercial, covering all stages from pre-planning finance, financing Land purchases, ground-up development and exit finance.

Senior Debt Finance

Senior Debt

Our market-leading senior debt finance up to £250m is used by experienced developers and investors to fund their large scale property development projects. Complex structures, all UK and certain EU jurisdictions considered. All asset classes considered. Upscale and run multiple projects.

Mezzanine Finance


Our mezzanine finance is a niche type of property finance available to ‘top up’ an existing loan on a development. Many UK developers use mezzanine development finance to fund various stages of their projects. If you need additional funding quickly, we're likely to be able to help.

100% Structured Finance

100% Structured

We can arrange 100% Structured Finance. With our flexible and tailored finance approach for each project, 100% structured development finance allows for more complex projects with limited access to senior debt. Access to larger sums of money than senior debt finance alone.

Build To Let Finance

Build To Let

We arrange fast build to let finance for landlords and property investors for residential, commercial and mixed-use rental properties who need access to both the finance for the initial build of their rental property and access to longer term refinancing options.

Developer Exit Finance

Developer Exit

Our development exit finance, also known as Sales Exit Finance, allows you time to finish up your project, market the development & complete the sale of your asset or obtain longer term financing. Refinancing a completed development enables developers to negotiate more favourable interest.

Development finance lending criteria

Loan to gross development value (LTGDV) 65% maximum (100% with additional security)
And 100% Build financing
Loan term 3 to 24 months
Loan amount £200,000 up to £250m
Interest options Rolled-up, retained or serviced
Interest rates From 0.44%
Decision Immediate decision in principle
Completion From 3 days to 3 months (Depending on type of finance required - call us today for more info)
Early repayment fees None
Availability England, Scotland, Wales and Northern Ireland & Europe
Individuals, Companies, SPVs
No credit & adverse credit considered
Exit strategy Sale or refinance

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development finance quote

Use the quick enquiry below to obtain an accurate cost of development finance.

property development

Financing property development

Designed to be used when a normal bridging loan is too short term or cannot offer the capital needed to progress a project, it is a specialist product designed around the timescales and financial requirements specific to the construction sector.

By utilising development finance, you'll potentially be able to undertake multiple projects simultaneously, or avoid having to wait until an existing project is sold, or is fully sold, before commencing your next development.

At the end of the building or refurbishment project, the property finance facility is normally repaid through sale of the properties or through a re-finance agreement. 

The interest rates on development loans will depend on the size of the project which is being funded, the value of the security on offer, the value of the property once building work is completed and the amount of money being borrowed.

Experienced property developers with more established track records will generally benefit from the most competitive interest rates for development funding due to the perceived reduction of risk.

However, we're happy to work with first time property developers and will make a lending decision based on the strength of the proposed project plan.  

Find the best rates on your development finance

We offer experience-based, impartial information and accessing quotes from the whole of market. Because we have incredible relationships with many specialist UK's lenders we're also able to move fast and can give you an in principle decision within 24 hours.

Get expert assistance today.

To find out the exact costs of our loans get an online quote - it takes just 3 minutes!

Or call our friendly team on 01202 612934 today!

Bridging Loan For Property Development

A comprehensive guide to Property Development Finance

Introduction to Property Development Finance

Property development finance is a type of financial tool used to fund large-scale property construction, renovation, and development projects available to developers with construction projects in England, Scotland, Wales and Northern Ireland

It typically involves using an investment fund or loan facility to support the acquisition, development, and construction of a new property development project.

This financing may come in the form of different types of debt based finance and equity based finance.

The differences between Light Refurbishment, Heavy Refurbishment and Ground-up Development

What is Light Property Refurbishment?

Light Refurbishments are when the building is mainly in good condition, but needs some minor work on the property. This is usually in the form of repairs or minor modernisation such as installing a new kitchen or bathroom, moving a bathroom upstairs or decoration. 

It is normally used to increase the value of a property to its optimum level or to ready for sale or rental.

This is the simplest and quickest form of property development finance. If you've heard the term property flipping then this is typically buying a property in poor condition below market value, completing light refurbishment and then selling on quickly for a profit.

What is Heavy Property Refurbishment?

Heavy Refurbishments are when a larger amount of work is required to optimise the value in the property.

Heavy refurbishment normally involves structural works such as going up a level, digging out a basement, extending the property, a loft conversion, new roof or other significant work. Depending on the severity of the works Development Finance might be more suitable. 

What is Ground-up Development?

Ground-Up Developments are when the land is either undeveloped or where a site is intended to be cleared of existing structures and requires extensive development works to build a new property.

The work involved would likely include groundworks, levelling, drainage and construction. Property development finance typically pay for the land procurement, planning costs and materials, as well as the construction and fit out of the property itself. 

How does Property Development Finance differ from a Bridging Loan?

Property Development finance are typically longer-term financing solutions for large-scale development projects, such as new builds, conversions, and ground-up developments. 

They're typically used to cover the site acquisition and development costs associated with the property, as well as the construction and fit out. 

The finance tends to have much longer repayment terms than a Bridging Finance, which is a short-term option used to enable quick access to capital. Whilst a bridging loan could well be used for the initial land purchase if the site isn't going to be developed immediately, once the site begins being developed development finance will come into play.

The repayment terms for Property Development Finance typically range from anywhere between one to three years because its likely that the project will be refinanced multiple times as the development progresses in order to minimise the interest of the loan. If you include the longer-term refinancing then the total loan duration could be as long as 30 years.

The two parts to Development Finance

Development finance comes in two parts:

1. To purchase the site

The first stage is typically used to finance the site acquisition. This might be land where a number of new properties will be constructed or an existing property that will be renovated.

2. To fund the building costs

The second part funds of the project's associated build works. This will be typically drawn over time over a series of stages that could be once per month or according to the build schedule. 

Types of Property Development Finance

The types of finance a developer chooses will depend on their specific needs and how they wish to structure their finance. At a glance, this development finance graphic shows how each of the different types of finance work together.

Types of Development Finance showing types of debt & equity finance

A broker can help developers understand which types to use in which circumstances, but as this type of finance is typically only available to experienced developers the borrower will have at least a basic insight of what they require. 

What is debt based finance?

Debt based finance describes a loan facility where the developer will pay interest and fees for the finance and then repay the capital sum at the term end. Debt based finance may include any single type, or a combination of: Senior Debt, Stretched Senior Debt, Mezzanine and Subordinated Debt finance.

What is equity based finance?

Equity based finance describes a partnership approach to development finance where the developer will offer a stake in the company that owns the development instead of using debt based finance. Equity based finance may include any single type, or a combination of: Preferred Equity, Equity and Joint Venture.

What is 100% Structured Finance?

100% Structured Finance describes the combination of any debt or equity based finance to achieve 100% of the finance required.

Property development finance comes in a variety of different forms, these include:

Senior Debt Finance

Senior debt finance is the most common form of property development finance, providing funds for the purchase of land, construction and/or the refurbishment of property. 

The funds available are agreed between lender and borrower, and the borrower is typically required to place a security against the loan (typically the resulting property asset being developed).

This finance type is typically the most secure type of property development finance and the lender will have a first claim on the development’s cashflow and proceeds from sale. 

Stretched Senior Debt Finance

Stretched Senior Debt Finance is a variant of the above senior debt finance, except that it is typically provided at higher loan to value (LTV) levels and can incur higher interest rates than traditional senior debt finance.

These higher loan amounts and interest rates serve to increase the risk for the lender and thus, are provided only to more established or experienced property developers with strong track records and impeccable credit histories. 

Mezzanine Finance

Mezzanine Finance is a hybrid form of debt and equity finance, where the lender provides both a loan and equity investment to the borrower, with the loan being subordinate to the more senior security provided by the lender.

In return for providing the loan to the borrower at higher LTVs and typically at a higher interest rate, the lender receives shares in the borrower’s business. 

100% Structured Finance

100% Structured Finance is a form of 100% of the property development cost being provided by the lender, who lends on the basis of the end value of the development (when complete) rather than the inherent risk of the development itself.

The lender will typically place more stringent requirements on the borrower and will likely require additional security (e.g. additional land or assets) in order to justify the loan.

Subordinated Debt Finance

Subordinated Debt Finance is a form of debt finance where the lender provides the loan but takes a ‘second seat’ to the more senior debt provider, in terms of loan repayment priority.

This type of funding is only provided to borrowers who have obtained first-charge debt from a senior lender and the subordinated debt lender will take a lower priority in repayment terms. Typically, the subordinated debt lender will also be provided with equity in the borrower’s business. 

Preferred Equity Finance

Preferred Equity Finance is a form of finance which provides an equity investment in the borrower’s business with certain predetermined rights (‘preferred’) over the deliverers of the equity in terms of repayment, dividend payments etc.

The terms of the preferred equity arrangement are pre-agreed and often provide the lender with greater control over the project than is possible through traditional equity investment. 

Equity Finance

Equity Finance is a form of investment used in property developments whereby the investors place funds in the form of equity allowing them to take a share of the profits and any potential losses resulting from the development.

As the lenders are taking a greater risk in this form of finance, they are typically compensated in proportion to the risk taken. 

Joint Venture Finance

Joint Venture Finance is a form of development finance where two or more parties come together to provide funds for a property transaction.

The joint venture partners pool their resources and funds to purchase assets or finance developments and typically receive a proportion of the returns. This form of finance is often used when a development is too large for a single investor or group of investors to finance on their own.

Considerations for Financing a Property Development 

When considering which type of financing to use, some of the key considerations include: 

Risk Profile: Before applying for financing, you need to assess the risk of the project. This includes looking at factors such as the location of the property, the type of development, the expected returns, and the timeline for the project.

Asset Strength: The financial strength of the underlying asset is another key consideration. A strong asset can help to secure financing on more favourable terms.

Loan Term: It is important to understand the repayment terms of the loan and make sure that it is in line with the timeline of the project.

Timeframe for Project: The length of the project timeline will affect the type of financing you need and the terms of the loan. If the project is expected to take a long time, then loan financing may not be suitable.

Understanding the Banking Landscape for Property Developers

Banks were the traditional source of funding for property development finance. Today, however, banks may be reluctant to lend to developers because of the perceived increased risk of defaults due to the downturn in the global economy.

Developers can still apply for development finance with a bank, but they should be aware that the terms and conditions may be more stringent.

In addition to the traditional banking sector, there are also several specialist property development finance providers, such as property investment firms, private lenders, and other alternative lending sources.

These lenders are usually more flexible in their lending criteria, and may offer more competitive rates and terms than banks.

What are the benefits of Development Finance? 

Development finance allows developers to access funds for a range of projects, including the building of housing, offices, industrial units, retail units, and other commercial projects.

Developing a property from scratch can have enormous potential, but is often cost prohibitive without external financial support.

Development finance enables property developers to access the funds necessary to complete their project, while providing them with a range of financial benefits that can help offset the costs of securing a loan and ensure successful completion of the project. 

Development finance can help developers manage costs, as funds are usually released as the project progresses, with an initial lump sum on day one, followed by additional release of funds as development milestones are passed.

What are the features of Development Finance? 

Development finance typically has a long repayment period, allowing borrowers to benefit from additional time to repay the loan, as well as potentially lower interest rates when compared to bridging loans. In addition, lenders often offer flexible repayment plans, enabling developers to get the best terms to suit their individual needs. 

Development finance can also be used to finance a range of related expenditures, including the purchase of materials, construction costs, fees for professionals, and taxes.

Depending on the agreement between the lender and the borrower, funds may also be released in stages, ensuring that funds are distributed based on the progress of the project which is critical to reducing interest costs.

Development Finance criteria

In order to be eligible for development finance, borrowers must typically meet certain criteria, including having a solid track record of completing successful developments, an honest and reliable financial history, and a good credit record.

Lenders will usually also take into account the projected revenue from the project and its expected completion time, as well as any feedback from planners and local authorities. 

Generally speaking, lenders will not typically consider a development finance project if the loan-to-value ratio (LTV), loan-to-cost (LTC) or loan-to-gross-development-value (LTDGV) exceeds a certain threshold and it's best to speak with a broker to understand how much you can borrow using these different ratios.

This means that buyers must have some form of collateral that can be used as security for the loan, such as land or property, and may also need to provide a personal guarantee.

How does Development Finance work? 

When taking out development finance, the borrower will typically require a land asset or, if the site hasn't yet been acquired a certain amount of money or other form of collateral to go into the project.

The amount required depends on the lender’s criteria, and will vary based on many factors such as the type of security being offered, loan duration and the risk presented by the borrower.

Depending on the agreement between the lender and the borrower, the finance will be released in two ways. The initial advance will be paid on day one with the subsequent stages of finance being released based on the progress of the project.

The loan amount and repayment terms will also be agreed upon in advance, with interest rates often fixed for the duration of the loan period.

The repayment schedule may also be staggered, and once the project has been completed, the entire loan plus interest and other fees must then be repaid.

How are the stage releases agreed? 

The stage releases of development finance are typically agreed in advance, with the exact release structure and any penalties for failing to meet specific phase completion deadlines, as well as meeting the agreed exit strategy deadline, detailed in the contract between the borrower and the lender.

Generally, the loan is released in three stages – the development loan (or advance), the stage release, and the completion loan.

Depending on the target returns of the project, the lender may also agree to a further release once the project has been sold or rented out; this is referred to as the ‘rental or sale release’.

This final stage of finance is usually determined by either the arithmetic of the lending application or an assessment of the value of the finished development.

How much can I borrow? 

The amount of money that you can borrow will depend on a variety of factors, such as the value of the project, the expected profits, the loan-to-value ratio (LTV) and the loan-to-cost (LTC) ratio.

The LTV ratio is the amount of property value that can be used to cover the loan amount, while the LTC ratio is the amount of money being borrowed compared to the total cost of the project.

The LTV and LTC ratios are important factors in determining the maximum development finance amount and should always be considered when applying for a loan. The maximum loan amount will also depend on the terms and conditions of the specific offer, such as the repayment terms, the interest rate, and the amount of deposit required.

How are LTGDV, LTC and LTVs Calculated? 

The Loan To Gross Development Value (LTGDV) is the ratio of the total loan amount to the total Gross Development Value (GDV) of the project; this is the estimated value of the finished development once it has been completed and fitted out.

The Loan to Cost (LTC) is the ratio between the total loan amount and the estimated total costs of the project, while the Loan to Value (LTV) is the ratio between the loan amount and the current market value of the property. 

In order to calculate the maximum loan amount a lender can provide for a development finance project, the LTGDV, LTC and LTV ratios must be taken into account.

A higher LTGDV, LTC and/or LTV will leave the developer with greater potential for profit, but also increases the risk for the lender, so the maximum loan amount will usually be proportional to these ratios.

How is the maximum loan calculated? 

The maximum loan amount for a development finance project is usually determined by a combination of the loan-to-gross development value (LTGDV), loan-to-cost (LTC), and loan-to-value (LTV) ratios. The minimum loan amount is usually determined by the estimated costs of the project and the target returns. 

The maximum development finance amount is also affected by market conditions and the rate of development, and so lenders will often also take into account any feedback from planners or local authorities and the estimated completion time of the project. In addition, lenders may impose additional criteria, such as having collateral to offer as security for the loan. 

What are the costs of development finance?

The costs of property development finance can be broken down into two main categories: interest payments and loan fees.

Regarding the interest payments, this will depend on the size of the loan, the creditworthiness of the borrower, the loan term, and the specific type of loan requested. Various short-term loans, long-term loans, or fixed-rate loans can have different interest rates.

When it comes to loan fees, there are a series of fees that must be taken into account, such as setup fees, application fees, and miscellaneous administrative costs. This is why it is important to be aware of all the costs associated with property development financing when attempting to secure such a loan.

What are the fees for development finance?

When researching a loan, borrowers must consider all the associated fees besides the interest rate, since these fees can increase the total cost of the loan.

Fixed-cost charges are typically paid upfront and can include the application fee, the arrangement fee, the exit fee, and the valuation fee. Additional miscellaneous fees may include late payment fees, administrative costs, and more. Fees can vary from lender to lender, depending on the type of development finance and the specific terms of the loan agreement.

Development finance rates

The development finance rates offered by lenders can be significantly different between them. For instance, short-term development finance typically has higher interest rates, while longer-term loans tend to have lower rates.

Additionally, different types of properties may require different interest rates, depending on the risk associated with such a loan. Some lenders may also offer different repayment structures, such as deferred payments or variable repayment terms.

Our advice is to approach a broker who can offer you guidance on what rates might apply to your specific project.


Property development finance can provide investors and developers with the necessary capital to construct or purchase new properties. By understanding the costs and fees associated with this type of loan, one can better evaluate their options and make an informed decision.

With a development finance broker on board, borrowers can more easily source and compare different options, accessing the best overall deal.

We're property and development finance experts who arrange both simple and complex financing for developers, sourcing and securing you the best deal from UK specialist lenders, private equity firms, investors and family offices.

Get expert assistance today, we're on hand to answer any questions about development finance.

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Call our friendly team on 01202 612934we're ready to help.

What is development finance?

Development finance is a type of loan facility that borrowers use to fund developments and works significantly different to other types of financing such as bridging finance. A developer typically borrows money from a lender in order to purchase property investment opportunities such as buying land (with planning permission or without planning permission) to build upon or acquiring an existing building with a view to renovate, refurb or change its use.

Due to their high returns, the opportunities in the UK are quite often focused on creating new residential dwellings. Whilst this may be the primary use of the finance, there are many other uses such as: to fund regeneration initiatives, build new commercial properties or mixed-use projects.

Whether its converting a historic building, changing the use of a high street landmark department store, renovating a local pub, creating a new leisure and hospitality complex or developing a holiday park, property development finance is used for all sorts of property ventures.

Who takes out property development finance?

Borrowers are typically, but not always, property developers who have been working in the sector for a number of years and have expertise in knowing what property investment opportunities deliver the best yields. These developers are also able to understand the property finance market place and how they can access different types of finance from a variety of lenders.

Why use property development finance?

New properties, refurbishments and regeneration initiatives all require a substantial amount of money before you can realise any return on your investment.

Developers need significant capital up front in order to buy property investment opportunities such as land, existing buildings or businesses that they want to convert into new property developments. In addition, developers intending to create a tenanted property must have large amounts of cash available for initial construction costs which incur during what is known as pre-let. The pre-let period covers the time from when construction starts until it's ready to receive its first tenant.

When would it require a specialist lender?

Quite simply every development loan is as unique as the developer's specific circumstances at that moment in time and their project. Combine this with each lender's preference for funding certain types of developments and not others, their specific lending criteria and current appetite for risk, these all factor into their decision-making process.

Securing development loans can be a complex and nuanced process as the solution is not one-size-fits all. This is where broker who deal with specialist lenders come into their own as they're often able to quickly arrange finance for each project at the best rates.

Who can use this finance facility?

Anyone looking to fund property development projects from ground up to refurbishment projects will likely need property development loans.

Developers often work with banks or traditional lenders such as building societies, but they also are increasingly needing to access specialist lenders for either more flexible terms and conditions - particularly if you don't meet current lending criteria due to a lower credit score, lack of track record or where their project is not straight forward.

A great example is the current high demand for financing brownfield sites or new requirements such as air space developments, many main stream lenders will steer clear of these projects as they are considered too high risk.

What finance facilities are available?

There are a number of finance options that developers can consider.

The options available for developers varies according to the type of venture whether it's residential or commercial property, as well as what stage of projects has been reached.

In addition different lenders have their own preference so before going anywhere else it’s important to speak to a broker who understands the property finance market place and know where to go in order to get the most appropriate property development finance for your specific needs.

Light development finance

This is often the development loan of choice for property renovation projects where you are retaining most if not all the property’s current tenants. This property finance option is typically more commonly used on small renovations projects so can be accessed quickly without too much difficulty.

Heavy refurbishment finance

This is designed for borrowers whose renovation project is likely to result in significant property renovation and remodelling such as structural works etc.

Ground up development finance

This type of finance is usually secured against an unencumbered site so in essence its financing 100% of the land value itself without any property attached to it. This option is used during the development stages of building work taking place on the property. Borrowers looking for this type of finance must be aware that they will need ‘Planning Permission’ to commence any property construction so you will require an integral part of the property development finance solution to actually get planning permission.

Senior debt finance

This option is designed for property renovations or developments where there are no current tenants and it may not even have planning consent yet. It can be used but it's often subject to a lender looking at several other criteria before agreeing to lend money. The most important factor in securing senior debt development financing is your track record as a developer.

Stretched senior finance

Borrowers use this term to refer to instances where they offer a property as security, but the property is not solely owned by them. In this case developers can become tenant in common with their lender and co-owners of the property whose value may be used as collateral for finance.

1. What percentage of funding does a property developer typically require for a new build property development?

Usually experienced developers will require between 20% and 35% of the total value of the property, but this will vary from project to project.

For example if a property cost £100k to refurbish then loans could provide up to 70%, but if it costs £500k then loans could provide up to 50%. It all depends on the lender's requirements and the risk profile of the property.

2. What can you use development finance for?

Development finance has many uses, and can include:

  • Residential property development
  • Commercial or Mixed-use Commercial property development
  • Renovations & refurbishment
  • Change of use & property conversions
  • New builds
  • Single unit developments to large multi-unit
  • Finish & Exits
  • Exit Financing
  • Sales Period Funding

3. Can you get 100% development finance?

Its completely possible to obtain 100% development financing however, you'll need to provide additional security, usually in the form of property or land.

So how does financing a property development project work?

If a borrower is looking to purchase land with planning permission, or obtain a change of use on an existing building and develop it into 10 residential dwellings, they may first consider a bridging loan.

However the costs of construction would exceed the value of the only asset they have (the land or the building), and the short time scales inherent in bridging loans would not offer the time needed to successfully finish the construction – meaning that a bridging loan would not be a suitable choice for finance in this scenario. 

Development finance allows up to 65% LTGDV to be raised against the initial asset, the land or existing building or 100% where the borrower offers additional security, and in addition to this up to 100% of the build costs for the actual development.

The build costs are divided into tranches and released/drawn down as the build schedule progresses. As the build schedule progresses the gross development value increases relative to the loan being drawn down ensuring that the LTGDV remains within the agreed lending criteria.

At the end of the construction, the property is usually either sold or refinanced using long term refinancing should the developer plan to keep the finished development for themselves to use or let.

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