Property development finance

• A strong track record: We’re well known for our exceptional work in this area. We’ve helped over 17,000 customers access more than £800M in funding, including property development funding. 

• A wide network of lenders: We work with over 120 lenders offering between £1,000 and £20M.

• Competitive rates: We help match eligible borrowers to lenders. Since we work with so many lenders, we’re able to carefully select the most suitable options for each company.

• Expert support: Our team of experts are ready and waiting to provide comforting support, helping businesses navigate finance with ease.

As Bright Green Homes put it:

“Funding Options spent some time trying to understand what it is we do and why we needed this funding. That’s something that banks don’t do these days – talk.”

Simmons Bar case study

Nick and Jason needed funding to expand their cocktail bar chain and launch a new bar in Soho, the Simmons Bar, but their existing bank only offered half of the £50,000 needed to make the venture a success. So, they turned to us.

We helped them leverage the reputation of their exceptionally well run (and profitable!) bars across London to secure the full amount from RateSetter. With the funding in hand, they were pleased to be able to stick to their tight refurbishment deadlines. They also liked that the lender we found didn’t charge for early repayment and even offered to allow them to draw additional funds in future.

Join Nick and Jason by finding property development finance with us.

The process of applying for a property development loan generally follows these steps:

1. Decide how you want to manage your project.

2. Create a project plan.

3. Decide what loan type you’d like (e.g. a bridging loan or commercial mortgage).

4. Decide which lender you’d like to use, pay close attention to each lender’s terms, such as the interest rates and repayment dates.

5. Gather your documentation together (e.g. an exit plan, cash flow projections, a business plan).

6. Carefully review the contractual terms set out in the lender’s terms and conditions.

7. Complete the application. Depending on the lender, you may have to pay an application fee.

8. Wait for approval or rejection.

9. If you’re approved and you’re happy with the terms, accept them and receive your funds.

10. Repay the loan, either slowly on a monthly basis or all at once at the end of the term length depending on your agreement with the lender.

The loan amount you are eligible for will vary by lender, however, we help match eligible borrowers to lenders offering between £1,000 and £20M.

In general, you may struggle to find funding for more than 75-90% of the value of the property you are securing the loan against.

• Research: Before committing to a property development project, consider conducting research into the local market you're looking to purchase in.

• Strategy: Among other factors, having a well-thought-out investment strategy in place when you approach a lender can help you get a good rate.

• Advice: You may be considering setting up a limited company – if so, you should seek professional tax and legal advice.

• Broker: Using a broker can help you find the best rates and the most suitable lender.

• Documentation: Supplying the lender with all the relevant documentation (such as cash flow projections and an exit plan) can help improve loan approval speeds.

Lenders may consider your track record, both with regards to borrowing and your success when it comes to property development projects in the past. They will likely also look at your credit score, possibly both your company and personal scores, particularly if you are asked to provide a personal guarantee.

To apply, you may need:

• A description of the project

• Information about your company

• Cash flow forecasts

• Planning permission

• An exit plan

• Proof of ownership

• A valuation

• Information about your ability to repay the loan

• A business plan

• A project plan

• A breakdown of the construction timelines

Interest rates for property development finance vary greatly and will depend on your creditworthiness and the value of the property. The average rate for a development loan below £500,000 is around 6.5-9%, whereas the average for a property above £500,000 is around 4.5-7.5% a year.

Yes, you will likely have to pay arrangement fees. These are charged by the lender as a fee for setting up the loan. You may also need to pay exit fees, which could be around 1-2% of the total loan amount. You could also be charged survey fees, valuation costs, and legal fees.

Missing a payment can have a severe impact on your creditworthiness and your ability to borrow in the future. Your lender may charge additional interest and fees and could even take legal action.

Monthly repayments: Sometimes, repayments are made automatically with monthly instalments withdrawn mechanically from an approved bank account. On other occasions, you may need to transfer the funds on or before the monthly repayment date.

Full repayment: To repay the full loan, you have several options. You may choose to rent out the property once development is completed, sell the developed property, sell a different property and inject the funds into this one, refinance the property with a mortgage, or secure another type of loan.

Yes, it most likely will. Applications for property development finance usually invoice a hard credit check which can impact your credit score. Also, if your application is approved and you miss payments or default, this would likely have a severe impact on your score and ability to borrow in future.

That depends on the type of finance you’re seeking. To apply for a commercial mortgage, you will usually have to have the property picked out, the valuation conducted, and a survey completed. Auction finance, on the other hand, has much more flexibility when it comes to the exact property.

If you don’t have the property chosen yet but would still like to gain funding, put together a document that clearly outlines your plans for the property, your cash flow projections, your experience in the property market, and your exit plan.

GDV stands for gross development value, which is the estimated value of the property, land, or real estate once the project has been completed. The GDV is used by lenders to determine the loan amount they intend to extend, for example, if the GDV of a property is £100,000, the lender may choose to extend £70,000 in funding.

You’ll usually repay an agreed sum on a monthly basis. Most property development funding solutions are short term, meaning you’ll have to repay the full amount sometime between several months and a few years. However, mortgages and similar long-term financing options are sometimes used to fund projects and these are repaid over a period of 15-30 years.

Some property finance solutions provide the option to repay the interest only on a monthly basis, with the full amount paid at the end of the entire loan term. Bridging loans and interest only mortgages are two examples of these.  

Exact loan repayment terms vary depending on the loan type and lender.

Just head to our get a quote page and fill in the information requested. Based on the information provided, we’ll let you know if you’re eligible without affecting your credit score. If you are eligible, we’ll show you the lenders we’ve matched you with, how much they’re offering, and under which terms.

At this point, you can choose to walk away. Our service is completely commitment and fee-free.

If, however, you do choose to go ahead with one of the lenders we’ve matched you to, you’ll likely need to submit information about your company and the project, cash flow projections, and an exit plan. 

While a standard mortgage is usually taken out by individuals buying a ready-built property (like a home), property development finance is structured to fund various stages of a development project, such as land acquisition, construction costs, and refurbishments. The repayment terms, interest rates, and drawdown schedule can be more flexible and are specifically adapted to development milestones rather than a fixed property purchase.

Bridging finance is short-term funding often used to bridge a gap—such as buying a new property before selling an existing one. Property development finance is typically more project-focused, released in tranches aligned with construction phases. While bridging loans can fund minor refurbishment or quick transactions, development finance is structured for larger or more complex build projects.

Most UK lenders require a deposit or equity contribution from the developer, generally between 20% and 35% of the total project costs. This helps ensure the borrower has sufficient ‘skin in the game’ and reduces risk for the lender. Some specialised lenders may offer higher loan-to-cost ratios, but these often come with stricter underwriting or higher interest rates.

Yes, many developers refinance into a longer-term mortgage or commercial loan upon project completion. This exit strategy is key to reducing monthly payments and freeing up capital for future projects. Ensuring you have a realistic refinancing plan is often a requirement for securing property development finance in the first place.

When exploring finance for property developers, keep these factors in mind:

1. Loan-to-Value (LTV): How much you can borrow against the property’s value. A higher LTV can be riskier, so expect stricter lending criteria or higher interest rates.

2. Interest Rates & Fees: Financing property development can involve arrangement fees, exit fees, and monthly interest. Always compare different lenders to find the best deal.

3. Project Type & Scope: Larger or more complex developments may require more substantial property development funding, with staged releases as work progresses.

4. Credit Profile: Your personal and business creditworthiness can influence the terms you’re offered. If your credit is less than perfect, consider alternative providers or developer loans specifically designed for riskier projects.

Funding property development can take many forms. Some developers opt for a property development mortgage if the project involves purchasing land or an existing building, while others use loans for property development that release funds in phases tied to construction milestones. If you prefer more flexibility, bridging finance might be a better option—particularly for short-term needs or when speed is essential.

Top tips when comparing property funding:

• Check the total cost of borrowing, not just the monthly rate.

• Understand any conditions for releasing new funds (e.g., site inspections).

• Ask about early repayment fees if you plan to clear the loan ahead of schedule.

With so many property funders on the market, it can be challenging to choose the right lender. Specialist development finance providers, high-street banks, and alternative lenders all offer various property funding products. Some points to consider:

• Speed of Service: If time is of the essence, look for a lender with a quick approval process.

• Industry Expertise: Providers who specialise in finance for property projects often understand the nuances of construction, planning, and valuation.

• Reputation: Seek feedback from other developers or check independent reviews to gauge a lender’s reliability and support.