Development finance for ambitious projects, any scale.
From light refurbishments to ground-up new-builds. We source development funding across the whole market so you can focus on the project, not the paperwork.
What is property development finance?
Property development finance is a short-term loan used to fund construction, conversion, or significant refurbishment projects. Unlike a standard bridging loan, it typically releases funds in stages, drawn down as work progresses, rather than in one lump sum from day one.
This staged drawdown structure means you only pay interest on what you've actually drawn, which keeps costs manageable on longer or more complex builds. The loan is typically repaid either by selling the completed units or by refinancing onto a longer-term product once the project reaches practical completion.
- Borrow up to 85% of total project costs (land plus build)
- Up to 75% of Gross Development Value (GDV)
- Terms from 6 to 36 months depending on project complexity
- Interest rolled up or retained, no monthly cashflow burden
- Funds drawn in tranches as works are signed off
At a Glance
| Loan size | £50,000 – £100m |
| Max LTC (total project costs) | Up to 85% |
| Max LTV (of GDV) | Up to 75% |
| Term | 6 – 36 months |
| Fund release | Staged drawdowns |
| Interest structure | Rolled-up or retained |
| Exit routes | Sale, refinance, or BTL |
Estimate your development loan
Enter your project figures for an indicative calculation. These are illustrative figures, call us for a detailed quote.
How does GDV affect my loan?
GDV, Gross Development Value, is the projected market value of all properties in your scheme once complete. It's the number lenders watch most closely.
A typical lender will advance up to 85% of total project costs, and cap the total borrowing at 75% of GDV. The gap between your GDV and total costs represents your profit margin, most lenders want to see at least 20% margin on GDV before they'll lend.
If your numbers sit below that, there are still options, including joint venture structures, mezzanine lending, or restructuring the scheme to reduce costs. That's where an independent broker adds real value.
Call us before you commit to a site. We'll run through the figures with you honestly, including whether the deal makes sense and what lenders are likely to say.
Four types of development finance
Most projects fall into one of four categories. Each has different lending criteria, maximum LTV, and typical terms.
Light Refurbishment
For projects that don't require planning permission or structural changes, fitting a new kitchen, updating bathrooms, replacing flooring. Rates are lower because the risk is lower. Most light refurb loans run between three and twelve months.
Heavy Refurbishment
For projects involving structural work, extensions, internal wall removal, loft conversions, or where development costs exceed 15% of the improved property value. Terms typically run to eighteen months, with some lenders going to thirty-six.
Ground-Up Development
Full new-build projects on cleared land or following demolition. More complex underwriting, with funds released in tranches as the build progresses. Lenders typically want a proven track record and a fixed-price building contract in place.
Development Exit Finance
A bridging-style loan for developers whose project is largely complete but who need to repay an expensive development facility while sales complete. Rates are considerably lower than senior development debt, as most of the risk has been removed.
Staged drawdowns explained
Unlike a bridging loan, where the full amount is released on day one, development finance is drawn in stages, timed against construction milestones. This is how it typically works:
- Initial release, funds to purchase the site (or refinance existing debt)
- Build tranches, lender releases further funds at agreed stages, after a monitoring surveyor signs off each tranche
- Interest accrual, interest rolls up on drawn funds only, preserving your cashflow during the build
- Practical completion, once the project is finished, the sales or refinance process begins
- Exit and repayment, loan is cleared from sale proceeds or by refinancing onto a buy-to-let or commercial mortgage
What lenders look at
- Your experience, track record on similar projects
- Site location, planning status, and build quality
- Loan to cost (LTC), typically max 85%
- Loan to GDV, typically max 75%
- Profit margin on GDV, lenders generally want 20%+
- Fixed-price build contract and professional team
- Your exit strategy, sale programme or refinance
What development finance costs
There are more moving parts than a standard bridging loan, here's a clear breakdown of what to budget for.
| Fee | Typical Range | Notes |
|---|---|---|
| Monthly interest rate | 0.75% – 1.5% | Charged on drawn funds only. Typically rolled up and repaid at exit. |
| Arrangement fee | 1% – 3% of loan | Charged by the lender. Often added to the loan and repaid at the end of term. |
| Monitoring surveyor | £500–£2,000 / visit | Appointed by the lender to assess and approve each drawdown tranche. |
| Valuation fee | £1,000 – £5,000+ | RICS red-book valuation required. Includes assessment of GDV and existing site. |
| Legal fees | £2,000 – £6,000+ | Your solicitor plus lender's own legal costs. More complex on development loans. |
| Drawdown fees | £100 – £300 per tranche | Admin fee charged at each staged release of funds. |
| Exit fee | 0% – 1.5% | Some lenders charge an exit fee based on loan or GDV. Always confirmed upfront. |
| Broker fee | £0 to you | We are paid by the lender on completion. No fee charged to our clients. |
Figures shown are indicative. Development finance costs vary considerably based on project complexity, lender, and LTC/LTV ratios.
Development finance FAQs
Yes, though the terms are more restrictive. First-time developers typically access lower LTCs (around 65–70%), pay higher rates, and may be required to use a fixed-price contract with an experienced main contractor. Some specialist lenders focus specifically on first-time developers. We can advise on which lenders to approach based on your project and experience level.
For ground-up and heavy refurbishment loans, full planning permission is normally required before funds are released. Some lenders will offer credit terms, or even a "land loan", before planning is granted, but at higher rates. For light refurbishment projects, planning permission is generally not required as the works don't involve change of use or structural alterations.
In rare cases, via mezzanine finance or joint venture structures, 100% of project costs can theoretically be funded, though the blended interest rate becomes very high. In practice, most lenders require the developer to contribute equity, typically at least 10–15% of total project costs. We can explore all structures, including stretched senior and mezzanine combinations, if you need to reduce your equity input.
More complex than a bridging loan. A typical development finance application takes between four and eight weeks from initial enquiry to first drawdown. The valuation, legal work, and monitoring surveyor appointment all take time. We manage the process actively to avoid unnecessary delays, and we'll tell you upfront if anything is likely to be an issue.
A monitoring surveyor (sometimes called a project monitor or QS) is appointed by the lender to inspect progress against the agreed schedule before each drawdown is released. They effectively act as the lender's eyes on site. Their fees are payable by the borrower and are factored into the total loan costs. It's a layer of cost, but it also provides independent oversight that can be useful on larger projects.