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The contact form to request free advice and a no obligation quote is at the bottom of this page.
All quotations for development loans are provided to you free of charge and on a no-obligation basis - there is no pressure, make your decision in your own time.
Property development finance is a type of funding used to finance the construction, conversion or heavy refurbishment of residential, commercial or mixed use (part commercial/part residential) properties and at the point of applying for the loan, it may not be necessary to having planning permission in place. Most development finance lenders assess applications on a case by case basis.
Regulated development loans are used to fund the build of property that is to be used as a primary dwelling of the borrower. Development finance applications become regulated if 40% or more of the property is to be used as or in connection with a dwelling.
Loans are available from £50,000 with a maximum dependent on your project, over a period of 1 to 36 months, so it is a short-term loan to fund the project during the build only. Once the project has been built, the loan is usually repaid through the sale of the property, or by refinancing to a different product such as a mortgage or bridging loan etc.
Development loans can be arranged for the following types of borrowers:
Private residential borrowers
Special Purpose Vehicles (SPV)
Applicants must be aged 18 or above.
SPV Limited companies can borrow from start up and there is no requirement for previous trading history.
100% development loan - also known as joint venture (JV) development finance is a method of developing property without using your own money. As the lender provides all of the money needed to complete the project, profits are usually shared on the sale of the site.
Generally speaking, the profits usually end up split on a 50/50 basis. Some lenders will charge interest on funds drawn own and split profit in your favour slightly. Others will charge no interest and simply split 50/50.
Where interest is charged on the debt, it is usually allowed to roll up, meaning there is no need to service the debt. JV development finance is designed to cover 100% of all purchase and build costs of the project. This means that site acquisition and build costs are both covered fully.
100% development finance is usually only available to experienced property developers. Applications for first-time developers can be considered but would have to be very strong to be accepted as an exception.
Outline planning permission is required for an application to be considered by a joint-venture development finance lender. For any JV application, the lender will be unwilling to take any planning risk.
The lender will be keen to see a strong return on their investment. As such, they will not usually consider a joint venture for a site with a Gross Development Value (GDV) below £1m. As a percentage, the lender would want to see a margin of at least 30% on the scheme.
Any lender willing to offer 100% development finance will only lend when the debt is supported by a personal guarantee (PG). Different lenders will take a different view on the level of PG, but most will accept a capped PG.
When taking out JV development finance, the property will usually be placed in a special purpose vehicle (SPV). This is a Ltd. company set up purely to own the asset and hold the liability. The SPV will usually be owned by the funder, with a guarantee in your favour.
Commercial property development finance - is designed to allow developers or business owners to build a new commercial property. This is available for both experienced and first time developers. If you’re looking to develop for the first time, we would highly recommend working with experienced professionals.
Commercial Development loans can typically be secured for the following, ifyour scenario is different, please contact us with the form below and an advisor will let you know what can be offered:-
Mezzanine finance - mezzanine development finance is designed to act as a top-up loan, to bridge the gap between the developer’s available deposit and the loan available from the senior lender. It enables a developer to secure the highest return on their investment with the lowest deposit contribution. Mezzanine funders will usually secure their position by taking a second charge over the development.
Mezzanine finance key points :-
Regulated development loans - are used to fund the build of property that is to be used as a primary dwelling of the borrower. Development finance applications become regulated if 40% or more of the property is to be used as or in connection with a dwelling.
They can be used when a plot of land is being purchased to build a new home, or when planning has been granted for a property to be built in the garden of the client’s current home.
Key Points :-
Residential development loans - are a type of funding used to finance the building or conversion of a property into residential units. It can be used to fund schemes from one unit to large projects of thousands of units.
Development exit finance is used to repay outstanding finance against a property development once the project is complete.
A whole of market broker will give you honest advice on how a lender will view your project and the types of information that you’ll need to provide and how best to present it. They will also have access to lenders from high street banks to specialists, who may only offer development finance through their intermediary partners. A broker, who isn’t tied to a specific lender can offer impartial advice, they can negotiate with lenders on your behalf, remember, development finance is often agreed on a case by case basis and they will help to fill in the paperwork and keep the communication going with the lender through out the process, helping things to move smoothly.
Process – to help structure your thinking, here are the steps you’ll need to go through to be ready to approach a lender for funding:
We currently serve the following UK post code areas (for example AB - Aberdeen means all areas in and around Aberdeen whose postcode starts with AB) :-
AB - Aberdeen, AL - St Albans, BA - Bath, BB - Blackburn, B - Birmingham, BD - Bradford, BH - Bournemouth, BL - Bolton, BN - Brighton, BR - Bromley, BS - Bristol, BT - Belfast, CA - Carlisle, CB - Cambridge, CF - Cardiff, CH - Chester, CM - Chelmsford, CO - Colchester, CR - Croydon, CT - Canterbury, CV - Coventry, CW - Crewe, DA - Dartford, DD - Dundee, DE - Derby, DG - Dumfries, DH - Durham, DL - Darlington, DN - Doncaster, DT - Dorchester, DY - Dudley, EC - London, EH - Edinburgh, E - London, EN - Enfield, EX - Exeter, FK - Falkirk, FY - Blackpool, G - Glasgow, GL - Gloucester, GU - Guildford, GY - Guernsey, HA - Harrow, HD - Huddersfield, HG - Harrogate, HP - Hemel Hempstead, HR - Hereford, HS - Western Isles, HU - Hull, HX - Halifax, IG - Ilford, M - Isle of Man, IP - Ipswich, IV - Inverness, JE - Jersey, KA - Kilmarnock, KT - Kingston Upon Thames, KW - Kirkwall, KY - Kirkcaldy, LA - Lancaster, LD - Llandrindod Wells, LE - Leicester, L - Liverpool, LL - Llandudno, LN - Lincoln, LS - Leeds, LU - Luton, ME - Medway, MK - Milton Keynes, ML - Motherwell, M - Manchester, NE - Newcastle, NG - Nottingham, N - London, NN - Northampton, NP - Newport, NR - Norwich, NW - London, OL - Oldham, OX - Oxford, PA - Paisley, PE - Peterborough, PH - Perth, PL - Plymouth, PO - Portsmouth, PR - Preston, RG - Reading, RH - Redhill, RM - Romford, SA - Swansea, SE - London, SG - Stevenage, SK - Stockport, SL - Slough, SM - Sutton, SN - Swindon, SO - Southampton, SP - Salisbury, SR - Sunderland, S - Sheffield, SS - Southend - On - Sea, ST - Stoke - On - Trent, SW - London, SY - Shrewsbury, TA - Taunton, TD - Galashiels, TF - Telford, TN - Tonbridge, TQ - Torquay, TR - Truro, TS - Cleveland, TW - Twickenham, UB - Uxbridge, WA - Warrington, WC - London, WD - Watford, WF - Wakefield, W - London, WN - Wigan, WR - Worcester, WS - Walsall, WV - Wolverhampton, YO - York, ZE - Lerwick.
We offer rapid decisions in principle – often within four hours – and our development loan advisors are available to answer any questions that may arise.
Please use the form below to get free advice and a quote on the best product for your circumstances.