How development finance is sized
Three numbers decide how much you can borrow. The loan is the lowest of them:
| Measure | What it is | Typical maximum |
|---|---|---|
| Loan to GDV | Total loan against the finished value | 70% resi / 65% commercial |
| Loan to cost | Total loan against land plus build costs | 80% |
| Day-one LTV | Land advance against current site value | 55% |
So on most schemes you'll fund at least 20% of total costs yourself, usually in the land.
Drawdowns and the monitoring surveyor
Build costs are released in arrears. The lender appoints a monitoring surveyor who visits site, checks progress against your build programme and certifies each stage before money is released. Collateral warranties or step-in rights from your contractor and professional team may be needed.
Schemes we can place
- Residential schemes up to 12 units, houses or flats.
- Mixed use with commercial below and residential above, up to four storeys.
- Light industrial, warehouse and distribution units, up to 5,000 sq ft each for sale or let, or 12,500 sq ft for owner-occupiers.
- Conversions of closed pubs, restaurants, hotels and care homes, considered case by case.
Commercial development usually requires you to own other property and isn't available in rural locations.
Prepare your appraisal
A strong development application includes a full appraisal (land, build, professional fees, finance, contingency, sales costs), planning consent, a build programme, contractor details and a CV showing your team's experience. We'll review it before it goes to a lender.
Frequently asked questions
Can first-time developers get development finance?
Some lenders will consider it, especially on smaller schemes with an experienced contractor and professional team. Expect lower leverage than an experienced developer would get.
Do I need planning permission?
Yes. Development finance needs full planning in place. To buy a site before consent, a land bridge at a lower LTV is usually the answer.
What happens when the build finishes?
You repay from sales, or refinance onto developer exit finance or a term loan. See our developer exit page.