Property Development Finance
We provide tailored funding solutions for property development across the whole of the UK, Ireland and parts of Western Europe across all asset types. Every single deal is packaged precisely for your requirements, to ensure that you receive construction finance which is second to none on the market today.
Development finance tailored to you
We work with a team of leading specialist lenders, family offices and private capital providers to ensure your development finance package is structured optimally around your scheme. Each scheme is individually considered – factoring in the developer’s track record, the build costs, estimated Gross Development Value and the exit plan to give you a funding proposal that is affordable, competitive and attainable.
We negotiate for you, achieve the lowest fee levels possible, and will showcase your scheme to lenders in the most positive light.
We constantly strive to add value… negotiating with lenders, driving down fees, and promoting the merits of your project every step of the way.
Residential development finance
When a lender considers lending for residential development they look at factors such as: experience of the developer, credit rating of the developer, demand in the area, cost of the land, build costs, GDV, and the exit plan.
Typical parameters include:
- UK & Western Europe
- Maximum LTC: up to 90%
- Maximum LTGDV: up to 75%
- Loan size: £100k to no upper limit
- Rates from: BBR + 4.99% p.a.
- Terms up to 48 months
- Equity options available
Ground‑up development finance is typically available with maximum LTC up to 90%, Max LTGDV: up to 75%.
Funding for non‑residential, commercial development
The range of commercial development options include offices, hotels, industrial or factory units and mixed-use schemes. Many lenders require some form of security on exit prior to works commencing such as a pre-approved lets, operator or strong covenant.
Typical parameters include:
- UK only
- Maximum LTC: up to 85%
- Maximum LTGDV: up to 70%
- Loan size: £100k to no upper limit
- Rates from: BBR + 5% p.a.
- Terms up to 48 months
- Senior investment loans also available
A commercial development finance lender will often require some form of secured exit, such as a contract with a hotel operator.
Bespoke development finance solutions
Flexible structures to support your project
- Stretched senior up to 90% of build cost
- Mezzanine up to 75% LTGDV
- Hybrid mezz/equity for higher leverage
- Site acquisition bridging
- Bridging pending planning
- Finish & exit bridging
- Development exit loans to refinance and release equity
High leverage options
When you need maximum gearing.
Mezzanine finance
Provides additional leverage above senior debt, reducing the equity required without profit share.
What we need for assessment of a project
For your development finance quote we require:
- Executive summary: A brief description of the project outlining what you are building, the timeline, costs, profit expectations and overall strategy. This will provide lenders with an immediate overview of the project.
- Borrowing vehicle & corporate structure: Details of the company or SPV which will be borrowing money and information on the corporate structure and control of the company. This will assist with lenders compliance checks and also assist with legal document production.
- Details of shareholders & directors: The names and details of the individuals who own or manage the project along with their ownership percentage. This assists lenders to identify and understand the people behind the project.
- Statement of assets & liabilities: Basic summary of personal and corporate assets and liabilities and overall net worth. This provides the lenders with evidence of your financial strength and support.
- Credit checks (if not clean): If any past credit problems exist additional information may be requested by lenders. This should provide the lenders with more details of the situation and will prevent future problems.
- CVs & profiles of development team and management: This will provide an overview of the development team and management of the project including their previous experience and past project success. This will give the lenders the confidence that the team is capable of delivering the project.
- Detailed development appraisal & accommodation schedule: Complete details of the costs of the scheme, gross development value, and profit calculations, including a breakdown by unit if necessary. Lenders require a detailed development appraisal to assess viability.
- Building costs & cashflow profile: Breakdown of the building costs and a month by month cashflow, showing when the development funding will be drawn down. The building cash flow will be used by the lender to structure the facility and manage the project progression.
- Details of planning permission / application: Any documentation regarding planning consent including planning permission documentation or applications. This provides assurance that the project is feasible and in line with current regulations.
- Site plan & drawings / CGIs: Architectural site plans and drawings, elevations and if available CGIs of the finished development. This enables the lenders to visualise the development.
- Marketing strategy: This outlines how the completed development units will be marketed, sold or let. The strategy should also include target markets and prices, as well as sales channels.
- Sales or valuation comparables: Evidence of comparable property sales or valuations to support the proposed GDV of the development. This allows the lender to review the market assumptions made in the development appraisal.
- Technical reports: These may include, contamination, structural surveys, ground investigations or feasibility study reports. They will help to identify any potential risks with the development.
- Proof of exit: Evidence of the repayment strategy for the loan (e.g. Sales, refinance, lease agreement).
Tips before applying
How to prepare for a successful development finance application:
Understand local demand, demographics and competition. Larger schemes may require a feasibility study.
Use conservative figures for GDV, build costs and timescales. Lenders will not rely on optimistic assumptions.
The development finance market is diverse and it takes a specialist broker to understand how best to increase your likelihood of getting approval. A specialist broker will also alleviate a great deal of stress.
If permission is needed, lenders will typically only approve loan facilities once approval has been granted (unless the bridging finance is for a property while awaiting the outcome of planning permission).
The ability of a contractor to complete the job within budget and on time can be crucial to the lender assessing their financial standing and overall viability as a contractor for this development.
The ability of your solicitor to expedite matters can make or break the transaction timeline.
Lenders will want to know exactly how the loan will be repaid-sale of the completed project, refinance to a more conventional term loan, or sale on to a tenant.
How much can you borrow?
There are many contributing factors in determining the size of a loan. The size of your loan and the rate will be determined by:
- Developer experience
- Credit profile
- Net worth and the amount of equity that you have available
- Cost of land
- Cost of build/refurbishment
- Gross development value
- Type of scheme (new build, mixed use, multi-unit)
- Feasibility and strength of exit strategy
Types of development finance and usage
Development finance facilities are used for a range of developments, most commonly, but not exclusively for:
- Ground up development: The funding you need to buy land and construct from new (usually drawn down in stages – land buy and then subsequent stages to match the build cost against works completed and certified)
- Conversions & change of use: Offices to residential (often on permitted development) convert a church, barn or old commercial premises to residential
- Light refurbishment: Cosmetic works on an existing building (kitchens/bathrooms, redecorate), this would normally be a refurbishment bridging product as opposed to true development finance
- Residential schemes: houses, flats, build to sell or build to rent
- Commercial and semi-commercial schemes: offices, retail, industrial, mixed-use with residential above the retail or office space.
- Specialist Sectors: Hotels, care homes, student accommodation (PBSA), co-living, retirement living, holiday let. These are normally required by specialist lenders as the exit value can depend on the trade and/or an operator or covenants not just on the bricks and mortar.
- Land and planning: Funding used to buy sites with no or only the prospect of planning and funds for when planning permission is achieved, these are high risk and therefore only a limited number of lenders will participate and leverage will be lower.
Development finance common FAQs
65-75% of the gross development value, or up to 100% of the build cost, on the proviso that you provide the site and some equity. This is subject to your assessment of the deal, experience, and exit strategy.
Typically between 10% and 30% of the total cost of the scheme – sometimes this is satisfied by the value of the site that you own. Joint ventures and mezzanine finance can often reduce the upfront equity requirement.
For standard UK deals, two to four weeks is achievable.
However complex developments or those with outstanding planning issues may take longer.
It helps if you have already got the appraisal, planning, and your exit strategy sorted.
No, not always.
Many developers can get finance with a planning application in place or via the permitted development route, or with conditions on planning. However, full planning permission usually secures the best rates and highest level of borrowing.
The exit strategy needs to be your route back out of the development – in simple terms, selling individual units, refinancing onto a BTL product, selling the whole scheme on completion, or achieving pre-lets for commercial deals.
This has to be realistic and credible.