Development finance provides capital to fund the construction, conversion or heavy refurbishment of property. It is designed for professional developers and investors undertaking projects that add value through build or transformation.

How It Works

Development loans are advanced in tranches, released against independent monitoring surveyor (IMS) reports that confirm cost-to-complete and progress on site. Interest is normally rolled-up or retained during the build phase and repaid from the sale or refinance of the completed development.

Facilities are structured around loan-to-cost (LTC) and loan-to-gross-development-value (LTGDV) rather than simple LTV, providing flexibility to match each project’s cashflow.

Typical parameters:

Loan size: from around £250,000 to £15 million+

Leverage: up to ~85% of cost or ~70% of GDV

Term: generally 9 – 24 months, aligned to programme duration

Interest: typically retained or rolled-up during build

Speed: usually 4–8 weeks from enquiry to drawdown (longer for complex or multi-lender structures)

Market Overview

The UK development finance market has expanded rapidly, with challenger banks, debt funds and private lenders active across small to mid-sized schemes.
Typical pricing ranges from 8%–14% per annum, influenced by leverage, borrower experience, location and project risk.

Lenders place increasing emphasis on scheme viability, cost control and exit strategy, favouring well-prepared proposals with clear documentation and professional monitoring.

What Lenders Consider

Lenders assess each scheme on its fundamentals — the asset, the borrower and the delivery plan:

  • Experience and track record of the developer and professional team

  • Build cost and contingency relative to specification and location

  • Planning status and exit route (sales or refinance)

  • Cashflow, equity contribution and contractor arrangement

  • Professional reports, valuation, monitoring and insurance coverage

A clear and realistic appraisal, backed by an organised professional team, often secures materially better pricing and leverage.

Key Advantages

  • Enables equity recycling and faster portfolio growth

  • Flexible structures for refurbishment, conversion or ground-up builds

  • Stage-drawn funding tailored to project cashflow

  • Interest deferred until completion in most cases

  • Supports both senior and mezzanine layers of the capital stack

Architect or developer reviewing building plans with a ruler on a wooden desk, representing property development and construction planning.

Facilities are secured against the site and works in progress, with funds drawn in stages as construction milestones are achieved. Development finance bridges the gap between equity investment and completed asset value, allowing borrowers to leverage their capital efficiently.

Next Steps

For developers seeking to fund new projects, clear presentation of costs, timeline and exit is critical.
We structure comprehensive, lender-ready development proposals, coordinating appraisals, monitoring and term negotiations to secure the right balance of leverage and flexibility.

Discuss Your Funding Scenario