Property development finance, structured around your scheme.
Residential and commercial property development finance from £500k to £100m across the UK and Europe, funded against GDV with staged drawdowns and sensible monitoring. Ground up schemes, conversions, heavy refurbishments, and bridging against development sites with or without planning. What the leverage really means, what it costs, and how the money actually flows.
What is development finance?
Development finance funds the purchase of a site and the cost of building on it, secured against the value the scheme will be worth when finished (the gross development value, or GDV). Unlike a mortgage, the facility is released in stages as the build progresses, and interest accrues only on what you have drawn.
It suits ground up schemes, permitted development conversions, and refurbishments heavy enough that a standard bridge will not cover the works. The lender's underwriting revolves around three numbers and one question: LTGDV, LTC, build cost per square foot, and whether your exit is real.
When the scheme completes and the facility runs out, the next decision is not a rate comparison. Read our guide to development exit finance: extend, bridge or refinance.
How the leverage actually works
LTGDV (loan to gross development value) caps the total facility at a percentage of the end value, typically up to 70%. LTC (loan to cost) caps it at a percentage of total project cost (land plus build plus fees), typically up to 85%. Whichever cap bites first sets your facility; the remainder is your equity. Land you already own at an uplifted value with planning can count towards it.
A typical structure funds part of the land on day one, then 100% of build costs in arrears: you complete a stage, the monitoring surveyor signs it off, the lender releases the drawdown. That monitoring is not bureaucracy; it is what lets the lender fund the whole build without repricing every month.
Residential and commercial schemes
The two run on the same mechanics and are underwritten on different bases. See residential development finance and commercial development finance for the detail on each.
Commercial property development finance
Commercial and mixed use schemes are funded on the same mechanics as residential, with three practical differences that change how a facility should be structured.
The exit is assessed differently. A residential scheme exits on unit sales at a value the market can evidence. A commercial scheme usually exits on either an investment sale or a term facility, and both are priced off the income the building will produce. Where a pre let is in place, the covenant strength of the tenant and the backing behind it become central to what a lender will offer, sometimes more so than the bricks.
Valuation is more contested. Commercial GDV rests on yield assumptions rather than comparable sales, and a small movement in the assumed yield moves the end value considerably. Lenders stress this, and a scheme that looks comfortable at one yield can breach its LTGDV cap at another.
Sector appetite varies sharply. Industrial and logistics, healthcare, student accommodation, hotels, leisure and retail all attract different lender appetite at any given moment, and that appetite moves. Testing the whole market matters more here than on a straightforward residential scheme, because the spread between the best and worst available terms is wider.
We arrange commercial property development finance across every sector, from £500k to £100m, throughout the UK and Europe.
Bridging loans for property development
Not every development need is a development facility. A bridging loan is often the right instrument at the two ends of the process, and using the wrong product at either end is a common and expensive mistake.
- Before the build: land and site acquisition. Securing a site at speed, buying land with or without planning, or refinancing an existing charge so a development facility can take over. This is where the lender pool thins most, because land lending combines an asset type many lenders avoid with a valuation that depends on a planning outcome that has not happened yet.
- Funding a planning period. A bridge can hold a site while planning is pursued, with the development facility taking over on grant. The critical question a lender asks is not what the land is worth today but what happens if consent does not come.
- After the build: exiting the facility. Once the scheme completes, a bridge at a lower rate can buy sales time or stabilise the asset for a term lender. See extend, bridge or refinance for how that decision should actually be made.
- Light refurbishment. Where works are cosmetic rather than structural, a refurbishment bridge is usually faster and cheaper than a development facility with full monitoring.
The dividing line is whether there is meaningful construction to fund and monitor. If there is, you want a development facility with staged drawdowns. If there is not, monitoring costs and drawdown mechanics are overhead you do not need.
What does development finance cost?
| Cost line | Typical range | Notes |
|---|---|---|
| Interest rate | from 8.0% pa | Charged on drawn balance only |
| Lender arrangement fee | 1% to 2% of facility | Usually added to the loan |
| Exit fee | 0% to 2% | Often on GDV or facility; we flag the basis up front |
| Monitoring surveyor | £1,000 to £2,500 per visit | Per drawdown stage |
| Valuation and legals | Scheme specific | Both sides' legals are yours |
Indicative ranges based on current whole of market pricing, July 2026.
Because interest accrues on the drawn balance, a facility drawn progressively over an 18 month build typically carries an effective utilisation around 60%, which is exactly how our calculator models it. The headline rate matters less than the fee stack and the exit fee basis; two facilities at the same rate can differ by six figures on a £5m scheme.
First time developer?
Fundable, at slightly lower leverage and with more weight on your professional team. A credible fixed price contract with a solid main contractor, realistic build costs and a conservative GDV will beat a thin scheme from an experienced sponsor. We package your application so it reads that way to a credit committee.
The exit: sale, exit bridge, or hold
Sale of units is the cleanest exit; lenders want pricing evidence, not optimism. A development exit bridge refinances the facility at practical completion onto a cheaper rate, buying marketing time without the development pricing. Holding the asset means refinancing onto a term investment facility against the completed, income producing value.
Sector rarely stops a sound scheme: residential, mixed use, student, hotels, care, industrial and commercial development are all fundable, across the UK and Europe.
We structure the facility around the exit from day one, because the exit determines the term you need, the leverage that is safe, and the lender that is right. If mid scheme costs move against you, mezzanine finance can stretch the capital stack without repricing the senior debt.
Valuation on a development scheme: three numbers, not one
A development facility is underwritten against a set of valuation figures rather than a single value: the current value of the site, the market value on the special assumption that the scheme is complete (your GDV), and often a restricted marketing period view of that completed value. Leverage is tested against several of them at once, which is why a strong GDV alone does not deliver the facility you modelled.
Expect a full Red Book valuation with an inspection, typically one to three weeks, plus a monitoring surveyor appointed separately to certify progress and release drawdowns. Those are different professionals doing different jobs, and both belong in the programme. The full valuations guide →
How long development finance really takes
Six to twelve weeks from enquiry to first drawdown, and it is worth being plain about that because development finance is routinely marketed as though it moves at bridging speed. Indicative terms come within 24 to 48 hours, but a full valuation and a monitoring surveyor's appraisal take two to four weeks between them, and legal work on a development facility is heavier than on any other product.
If you need to move faster than that, the tool for the job is usually a short bridge on the land while the development facility is arranged properly behind it. The honest bridging timeline →
Development finance FAQs
How much can I borrow with development finance?
Facilities typically run from £500k to £100m, capped at around 70% of gross development value (LTGDV) and 85% of total project cost (LTC), whichever bites first. The gap is your equity, which can include land held at uplifted value with planning.
What does it cost?
Rates from 8.0% pa on the drawn balance, plus an arrangement fee of 1% to 2%, monitoring costs, valuation and legals. Watch the exit fee basis; it moves total cost more than the headline rate.
Do lenders fund the land purchase as well as the build?
Yes. A typical structure funds a percentage of the land on day one and 100% of the build cost in arrears through staged drawdowns, signed off by the monitoring surveyor.
Can first time developers qualify?
Yes, at lower leverage with a strong professional team. Contractor credibility and realistic numbers matter more than track record length.
How do I repay a development loan?
Sale of units, a development exit bridge to buy marketing time at a lower rate once practical completion is reached, or refinance onto a term investment facility if you are holding the asset.
What does development finance cost?
Rates start around 8.0% per annum on the drawn balance, plus a lender arrangement fee of 1% to 2%, monitoring surveyor costs, valuation and legals. Because interest accrues only on drawn funds, the effective cost is well below the headline rate applied to the full facility.
Can first time developers get development finance?
Yes, at slightly lower leverage and with a strong professional team around the scheme. A credible main contractor, a realistic build cost and a sensible exit matter more than a long track record.
Can I get a bridging loan for a property development?
Yes, and it is often the right product at either end of a scheme rather than in the middle. Bridging suits land and site acquisition, buying with or without planning, refinancing an existing charge so a development facility can take over, holding a site through a planning period, and exiting a completed scheme. Where there is meaningful construction to fund and monitor, a development facility with staged drawdowns is the better instrument. The dividing line is whether there are works that need monitoring.
How does commercial property development finance differ from residential?
The mechanics are the same but three things differ. The exit is usually an investment sale or a term facility priced off income rather than unit sales, so a pre let and its covenant strength can matter more than the building. Valuation rests on yield assumptions rather than comparables, and a small yield movement moves gross development value considerably. And lender appetite varies sharply by sector and moves over time, which widens the spread between the best and worst terms available on the same scheme.
How long does development finance take to arrange?
Six to twelve weeks from enquiry to first drawdown is the honest range. Indicative terms arrive within 24 to 48 hours, but the valuation and the monitoring surveyor's appraisal take two to four weeks between them, and the legal work on a development facility is heavier than on any other product. Where a site has to be secured faster than that, the usual answer is a short bridge on the land while the development facility is arranged properly behind it.