Development finance

Ground-up schemes and conversions, arranged to 75% of gross development value. Send us the scheme and you will have a considered answer and the options worth looking at the same working day.

What development finance is for

Development finance funds the purchase of a site and the cost of building on it. It is short-term, secured against the land and the scheme being built, and it is sized against what the finished development will be worth rather than what the site is worth on the day you buy it.

That is the whole reason the product exists. A term mortgage looks at the asset in front of it. A development facility looks at the end value — the gross development value, or GDV — and lends against that. We arrange facilities to 75% of GDV.

Schemes we can fund

• Ground-up residential — houses and flats
• Conversions and permitted development
• Mixed-use schemes
• Land with planning consent already in place
• Land without planning, where there is a credible route to it
• Portfolio and multi-site programmes

An unusual site or a first scheme does not rule you out on its own, but it does change which lenders are worth approaching and on what terms. Tell us the position plainly and you will get an answer the same way.

How the money is released

Development facilities are almost always drawn in stages rather than handed over in one lump. A first tranche covers the land or the purchase; the build element is then released in drawdowns as the work is completed, normally against a monitoring surveyor's sign-off.

The practical effect is that you only pay for what you have drawn — and that your cashflow has to survive the gap between spending on the works and the drawdown landing. Lenders differ considerably in how fast they release funds and how much of each stage they will cover. For most schemes that difference is worth more than a small difference in headline rate, and it is one of the first things we look at.

What to send us

Enough for a real answer rather than a polite one:

• The purchase price, or the current value if you already own the site
• The build cost, and whether it is fixed or still an estimate
• The gross development value, and where that figure came from
• The planning position
• The location
• How long you need the facility for
• How you intend to repay it
• Anything awkward — adverse credit, a hard deadline, a lender who has already declined

That last point matters more than people expect. Something we discover later is worth a great deal less than something you tell us at the outset.

Getting out of the facility

Development finance is short-term by design, so the exit is part of the application rather than an afterthought. The usual routes are a sale on the open market once the scheme completes, a refinance onto a term facility if you are holding the units, or the sale of another asset. "Not yet decided" is a perfectly acceptable answer at enquiry stage — it is simply one more thing to work through.

If the works are improvement rather than construction, refurbishment finance is usually the better fit. If you need to move before a development facility can realistically be arranged, look at bridging.