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Development Finance

Looking for information about property development loans? Get the right advice here

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Property development finance provides short-term funding for property developers, landlords and investors to complete larger projects with.

You can use property development finance to fund:

We have a wealth of articles about property development finance niches available to read at the bottom of this guide. Each one is written and reviewed exclusively by experts to provide you with the most accurate and up-to-date information.

Whether your development is a new build, refurbishment or conversion, the scale of the project will dictate what options are available for you. However, you don’t need to waste time chasing for information and quotes as we can match you with a broker who specialises in sourcing the best property development finance for your needs.


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 What is property development finance?

Property development finance is a type of loan typically offered to fund projects on a short-term, interest-only basis.

To qualify for a property development loan, you can be:

  • An experienced developer
  • A builder by trade who wants to build property on the land they already own
  • Someone with no experience looking to build a property

Lenders release the funds to you in staged drawdowns as the project progresses and most will want confirmation that the schedule is going to plan before releasing more funds. Usually, lenders will agree to a 70-75% loan-to-value (LTV) ratio for the purchase and 100% of the development costs.


 How do I get a property development loan?

In order to get development finance loans in the UK, you’ll need to convince the lender that your plans are viable. Lenders are mostly concerned about how you’ll pay back the loan, so need to evidence a viable exit strategy, i.e. a means of repaying the debt at the end of the term. This would usually be through a remortgage or the sale of the development post-completion.

You may also need:

  • Experience: While not essential, if you have a record of property development, the likelier you are to get your plans approved.
  • Clean credit: The better your credit rating is, the more you could potentially borrow. If you have a bad credit rating, you may need to put up a larger deposit.
  • A Healthy deposit: The more you can put down, the better deals you could unlock, as it reduces risk to the lender if you don’t repay the loan.  

 


Three steps to your development finance

  1.     Make an enquiry with us and we’ll match you with a specialist broker who can offer tailored advice. They’ll also be able to suggest alternative products if they feel that there’s another that is more suitable.  
  2.     Once you’ve had your free, no-obligation chat with a broker, you can decide whether to proceed or not. If you do, your broker will create a plan based on your information, including the amount you want to borrow and your exit strategy.
  3.     Your broker will then search the entire market to find the best property development finance for your needs.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.