Ground-up development
Projects moving from site acquisition through construction and completion, subject to planning, costs, valuation, experience and exit.
Property finance for developers
Development Finance for UK Property Projects
Development finance can fund property construction, conversion and substantial redevelopment where borrowing needs to follow the project from acquisition or refinance through works, drawdowns and a defined exit.
PurposeFund property development
StructureInitial advance plus staged funding
AssessmentProject, borrower and exit
RepaymentSale or suitable refinance
Direct answer
What is development finance?
Development finance is property-secured funding designed around a construction or redevelopment project rather than a completed property alone.
The lender typically assesses the site or property, proposed works, development costs, expected completed value, borrower experience and planned repayment route. Depending on the case, the facility may include an initial advance and later drawdowns as the project progresses.
It differs from a standard mortgage because the lender is underwriting a changing asset and a delivery plan. It can also differ from a bridging loan, which may suit shorter-term or less construction-led funding needs.
New constructionGround-up property projects
ConversionsChange of use and substantial reconfiguration
Major worksHeavy refurbishment and redevelopment
Existing projectPart-completed schemes needing a new route
Where it can fit
Match the finance to the actual development
The right structure depends on what is being built or changed, how much work remains, when funds are needed and how the facility will be repaid.
Change of use
Conversions can require development funding where the proposed work materially changes the use, layout or value of the property.
Substantial refurbishment
Where works are structural or construction-led, development finance may fit better than lighter refurbishment bridging.
Part-completed schemes
A project already under way may need a new facility where the existing funding no longer fits the remaining costs or programme.
Senior and mezzanine finance
Some schemes use more than one layer of funding. Total cost, completed value, security priority and exit all need to reconcile.
Developer and team
Lenders consider track record alongside the contractor, professional team, borrower structure, financial position and complexity of the project.
How lenders assess a case
The project has to work on paper before the build begins
A strong application connects the property, costs, programme, borrower and exit with consistent evidence.
Property and planning
Title, permissions, current condition, proposed use and restrictions that may affect delivery or value.
Development budget
Purchase or refinance requirement, build costs, professional fees, contingency and funds already invested.
Current and completed value
The security today and the expected value after the agreed works, supported by appropriate valuation evidence.
Borrower and experience
Track record, company structure, contractor and professional team, financial position and ability to deliver the scheme.
Build schedule
When funds are required, how progress will be monitored and which dependencies could affect completion.
Repayment strategy
Sale, refinance or another evidenced route should be credible before the facility is agreed.
How the funding works
Funding can follow project milestones
Development finance can involve an initial advance followed by further releases as works progress and agreed conditions are met.
Structure the facility
Set out the acquisition or refinance requirement, costs, borrower contribution and total funding need.
Valuation and due diligence
The lender assesses the security, planning, project, borrower and completed-value assumptions.
Initial advance
The agreed first amount is used for the purchase, refinance or other permitted project costs.
Staged drawdowns
Further funds may be released against verified progress and the agreed development programme.
Complete and exit
The facility is repaid through the planned sale, refinance or another agreed repayment route.
Prepare the evidence
A strong application starts with a coherent project file
Clear information reduces avoidable underwriting questions and makes realistic structures easier to compare.
Project summaryProperty, current position, proposed development, target dates and required facility.
Planning and drawingsRelevant permissions, plans, specifications and professional documentation.
Cost schedulePurchase or refinance amount, build costs, fees, contingency and funds already invested.
Development programmeStages of work, timing, dependencies and expected drawdown requirements.
Valuation assumptionsCurrent value, completed value and evidence supporting sale or rental assumptions.
Borrower informationStructure, experience, financial information and source-of-funds evidence.
Professional teamContractor, architect, project manager, surveyor and other delivery partners.
Exit evidenceSales strategy, refinance route or other repayment plan with enough detail to test.
Repayment
Plan the exit before the facility starts
The repayment route should remain credible even if the development programme or sales period changes.
Sale of the scheme
Individual sales, a block disposal or sale of the completed property can repay the facility where the assumptions are realistic.
Longer-term refinance
Where the property will be retained, the exit may be an appropriate investment or commercial facility subject to separate underwriting.
Developer exit finance
Where construction debt matures before all units are sold or refinanced, a separate developer exit loan may be considered.
Development finance guides
Specific topics should support the main hub
These guides cover distinct project or borrower situations without competing with the broad development finance page.
Broker routeDevelopment Finance Broker UKRead guide →Existing projectFinance for Part-Completed ProjectsRead guide →Capital structure100% Development Finance ExplainedRead guide →ExperienceFinance for First-Time DevelopersRead guide →ConversionsDevelopment Finance for ConversionsRead guide →Capital stackMezzanine Development FinanceRead guide →
Frequently asked questions
Development finance questions
Pricing, leverage, eligibility and timing vary by project and lender.
What can development finance be used for?
New builds, conversions and substantial redevelopment can be considered where the funding needs to follow the project through works and completion.
How is development finance different from bridging finance?
Development finance is usually structured around construction or substantial works and can include staged drawdowns. Bridging is often used for shorter-term or less construction-led needs.
Do I need development experience?
Experience can affect lender appetite, especially on complex projects. The project team, borrower contribution, financial position and overall case also matter.
How are drawdowns released?
Further funds may be released as the project progresses and agreed conditions are met. A monitoring surveyor or other professional may review progress.
What does a lender assess?
The property, planning, development budget, completed value, programme, borrower, team, borrower contribution, legal position and exit are common areas of assessment.
What happens when the project is complete?
The facility is normally repaid from the planned sale or refinance. If more time is required after completion, developer exit finance may be considered.
What should I send for an initial review?
Start with the property address, planning status, project description, cost schedule, completed-value assumptions, experience, funding required, target dates and exit.
Discuss the project
Start with the development, costs and exit
Share the site, planning position, development budget, amount required, programme, borrower experience and repayment strategy.
Mortgage and finance availability is subject to status, affordability, valuation, lender criteria and underwriting. Your home or property may be repossessed if you do not keep up repayments on your mortgage or another debt secured against it. Information on this page is general and does not constitute legal, tax or financial advice.