Development Finance
Development finance provides the capital that property developers need to fund new build projects, conversions, and major renovation schemes across the United Kingdom. Unlike standard bridging loans, development finance is released in stages as construction works progress, allowing you to fund the build cost incrementally and minimise interest charges.
- Development finance from £150,000 to £25 million
- Up to 70% of Gross Development Value (GDV)
- Up to 90% of build costs funded
- Stage-released drawdowns as works progress
- Interest rates from 0.5% per month
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What Is Development Finance and How Does It Work?
Development finance is a specialist form of property lending designed to fund the construction, conversion, or major renovation of property. Unlike a standard bridging loan, which provides a single lump sum at completion, development finance is structured with staged drawdowns — tranches of funding released as the development progresses through pre-agreed milestones such as foundations, first floor, roof on, first fix, second fix, and completion.
This staged approach means you only pay interest on the funds that have been drawn down, not on the total facility. For a development that takes 12 months to build, the interest savings compared to drawing the entire amount on day one are substantial. Each drawdown is typically released after a monitoring surveyor inspects the site and confirms that the works have been completed to the required standard.
Development finance can fund the site acquisition as well as the build costs, or it can be layered on top of an existing bridging loan that was used to purchase the site. The maximum advance is typically calculated as a percentage of the Gross Development Value (GDV) — the estimated value of the completed scheme — usually up to 65-70% of GDV. Build cost funding can reach up to 90% of total construction costs, with the developer contributing the balance from their own resources.
Matt Lenzie brings over 25 years of financial services experience to every development finance application. His background in banking and corporate finance means he can structure development finance proposals in a way that maximises leverage, minimises cost, and presents the scheme to lenders in the most compelling format. Whether you are an experienced developer with dozens of schemes behind you or embarking on your first project, Matt and the team provide the expertise you need.
What Types of Development Can We Finance?
Our lender partner provides development finance for a wide range of property development projects across the United Kingdom. From single-unit conversions to multi-unit new build schemes, we can structure finance to match your project's specific requirements.
Ground-Up New Build Development
Development finance for new build residential and commercial properties, from single houses to larger schemes of multiple units. Funding covers land acquisition, planning costs, and full construction through to practical completion. Our lender partner finances new builds across England, Scotland, Wales, and Northern Ireland, working with developers at all experience levels.
Commercial to Residential Conversion
Converting offices, shops, pubs, churches, barns, and other commercial buildings into residential dwellings — often under permitted development rights (Class MA, Class Q). These conversion projects are a significant part of the UK property development market, and our development finance products are specifically designed to fund them from acquisition through to completion.
Heavy Refurbishment and Renovation
Major renovation projects that involve structural alterations, extensions, reconfiguration of internal layout, or significant upgrade of building services. These projects go beyond what a standard bridging loan can fund and require the staged drawdown structure of development finance. Examples include converting a large period house into multiple flats or adding floors to an existing building.
Mixed-Use Development
Schemes that combine commercial and residential uses — such as retail units on the ground floor with residential flats above. Mixed-use developments require careful structuring of development finance to reflect the different values and risk profiles of the commercial and residential elements. Matt Lenzie's corporate finance background is particularly valuable for these more complex transactions.
Development Finance Key Features
What Do Development Finance Lenders Look For?
Development finance applications are assessed more rigorously than standard bridging loan applications because of the additional construction risk involved. Lenders need confidence that the scheme will be completed on time, on budget, and will achieve the projected end values. Here is what lenders typically assess.
Developer Experience and Track Record
Lenders want to see evidence that you have successfully completed similar projects. First-time developers can still access development finance, but may need a more experienced contractor and may face slightly lower leverage. Your CV and a portfolio of past projects strengthen the application significantly.
Planning Permission and Building Regulations
Full planning permission (or prior approval for permitted development conversions) must be in place before the lender will fund the build phase. Outline or conditional planning may be sufficient for site acquisition funding only. Building regulations approval is also required.
Detailed Build Cost Schedule
A comprehensive breakdown of all construction costs, including materials, labour, professional fees, utilities, and contingency. The lender's monitoring surveyor will review this schedule and compare it against market rates to ensure the budget is realistic.
Projected GDV and Comparable Evidence
The estimated Gross Development Value of the completed scheme, supported by comparable sales evidence in the local area. The lender's valuer will independently assess the projected GDV and provide a formal valuation report.
Exit Strategy
How you plan to repay the development finance — most commonly through the sale of the completed units, or through refinancing onto long-term investment mortgages if you plan to retain the properties as a rental portfolio.
Fund Your Next Development Project
From site acquisition through to practical completion, our development finance solutions provide the staged funding your project needs. Matt Lenzie and the team will structure your application for the best possible terms and work closely with you throughout the build programme.
Development Finance FAQs
Can first-time developers get development finance?
Yes, first-time developers can access development finance, though the terms may differ from those offered to experienced developers. Lenders will typically want to see that you have appointed an experienced main contractor, that your cost schedule has been reviewed by a quantity surveyor, and that you have a realistic programme and contingency budget. Building a strong application with professional input increases your chances of approval.
How quickly can development finance be arranged?
Development finance typically takes 3 to 6 weeks to arrange due to the complexity of the valuation, the need to review architectural plans and cost schedules, and the legal due diligence involved. However, the site acquisition element can sometimes be funded faster with a bridging loan, which is then refinanced into the development finance facility once the full application is approved.
What is a monitoring surveyor and why is one needed?
A monitoring surveyor (or quantity surveyor) is appointed by the lender to inspect the development at each drawdown stage. They confirm that the works completed match the agreed specification and that the costs claimed are reasonable. This protects the lender's investment and ensures the project stays on track. The cost of the monitoring surveyor is typically paid by the borrower.
Can I buy land without planning permission using development finance?
Development finance lenders generally require planning permission before they will fund the build phase. However, a bridging loan can be used to acquire the land, with the development finance facility put in place once planning permission is granted. Some lenders will fund land acquisition at a lower LTV if there is a strong prospect of planning being achieved.
What is development exit finance?
Development exit finance is a product designed for developers who have completed or nearly completed their scheme but have unsold units. It allows the developer to repay the more expensive development finance facility and switch to a lower-cost loan while the remaining units are marketed and sold. This can significantly reduce holding costs and improve overall project profitability.
Ready to Finance Your Development Project?
Whether you are planning a single-unit conversion or a multi-unit new build, our development finance solutions are structured to match your project. Get a free, no-obligation quote today.