Development finance, structured around your scheme.
Ground up developments, conversions and heavy refurbishments from £500k to £100m, funded against GDV with staged drawdowns and sensible monitoring. 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.
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.
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.
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.
Development finance FAQs
How much can I borrow?
£500k to £100m, capped at around 70% LTGDV and 85% LTC, whichever bites first. The gap is your equity; land held at uplifted value with planning can count.
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 as well as the build?
Yes: part of the land day one, 100% of build costs in arrears through monitored drawdowns.
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 the loan?
Unit sales, a development exit bridge at practical completion, or refinance onto a term facility if you are holding.