Development Finance UK | £500k-£150m+

Development Finance | Property Development Loans

Development Finance UK

Development finance funds the construction, conversion, and refurbishment of property across the UK and internationally. A standard mortgage lends against a property that already exists. Development finance works differently, structured instead around the land value, the build costs, and the value of the finished scheme. Funds are released in staged drawdowns as the build progresses, so you only pay interest on capital you’ve actually drawn, which keeps costs under control through the construction programme.

Platinum Global Bridging Finance arranges development finance from £500,000 to £150 million+ for residential, commercial, and mixed-use projects. We access specialist development lenders, private debt funds, family offices, and challenger banks through a panel of 100+ lenders, matching each project to the most competitive structure available. Indicative terms are delivered within 24 hours from our offices in London (64 Knightsbridge, SW1X 7JF) and Manchester (Railway House, Urmston). No broker fee on facilities of £500,000 or above.

How Development Finance Works

Development finance is a short-term facility, typically running 12 to 24 months, secured against the development site. The lender advances funds in two parts. The land loan, usually up to 70% of the site’s purchase price or current value, is released at drawdown. The build facility, up to 100% of construction costs, is released in staged tranches against progress a surveyor has actually certified. A monitoring surveyor appointed by the lender visits the site at each drawdown stage, confirms the works match the agreed build programme, and signs off the next tranche.

The total facility is typically capped at 65-70% of the Gross Development Value (GDV), the estimated value of the completed scheme. This cap gives the lender a comfortable equity cushion if the project underperforms. Interest is usually rolled up rather than serviced monthly, so you make no payments during the build itself. The full balance comes due when the completed units sell or the scheme is refinanced.

Types of Development Finance We Arrange

Ground-Up Development Finance

Funding for new-build residential and commercial projects, from single houses to large-scale apartment schemes. The facility covers land acquisition and the full construction programme, with staged drawdowns against build milestones. We arrange ground-up development finance for experienced developers and first-time developers with strong professional teams across the UK.

Refurbishment Development Finance

Funding for heavy refurbishment projects that go beyond what a standard refurbishment bridging loan covers: structural alterations, extensions, change of use, and full modernisation programmes. Refurbishment development finance provides staged drawdowns against the works programme, with the exit being a sale or refinance at the improved value.

Permitted Development Finance

Specialist funding for commercial-to-residential conversions under Class MA permitted development rights. The facility covers acquiring the commercial building and the conversion works, with prior approval obtained during the loan term. Permitted development finance is particularly active in London boroughs like Lewisham, Croydon, Woolwich, Ealing, and Acton, where residential values run well ahead of commercial values.

Development Exit Finance

Short-term facilities that replace the development loan once the build is complete but before all units have sold. Development exit finance is cheaper than development finance, since the construction risk has gone, and it gives the developer time to sell remaining units at full market value rather than accepting discounted prices to hit the development loan’s maturity date.

Mezzanine Development Finance

Additional funding that sits between the senior development loan and the developer’s own equity, filling the gap when the senior lender’s facility doesn’t cover the full capital requirement. Mezzanine finance typically covers the difference between the senior loan (65-70% GDV) and the total capital needed, reducing how much cash equity the developer has to put in. Rates run higher than senior debt, but the extra leverage makes projects possible that otherwise wouldn’t be affordable.

100% Development Finance

Structures that eliminate or minimise the developer’s cash equity contribution by combining senior debt, mezzanine funding, and in some cases profit-share arrangements to fund the entire project cost. Our 100% development finance page explains the structures available, the costs involved, and which projects qualify.

Residential Development Finance

Residential development finance for new-build houses, apartment schemes, bungalows, and residential conversions. The UK’s housing shortage keeps driving demand for new residential development, and specialist lenders are actively competing for well-structured schemes with strong GDV evidence and experienced development teams behind them.

Commercial Development Finance

Commercial development finance for office buildings, retail units, industrial and warehouse facilities, hotels, care homes, and mixed-use schemes. Commercial development lending is assessed mainly on the end-use, pre-let status, and how strong the development team’s track record is in that particular sector.

First-Time Developer Finance

You don’t need a track record to secure development finance, but you do need a credible project and a strong professional team. Many lenders accept first-time developers provided the scheme is backed by an experienced contractor, a realistic development appraisal, and the right planning consents. We have extensive experience structuring facilities for developers entering the market for the first time.

Development Finance in London

London is the UK’s most active development market, running from large-scale residential schemes in Stratford, Barking, and Woolwich to boutique conversions in Hampstead, Islington, and Bermondsey. We arrange development finance across London for ground-up builds, office-to-residential PD conversions, basement excavations, HMO conversions, and comprehensive refurbishment projects. Years of arranging bridging loans across 90 London areas means we understand the micro-markets, planning environments, and valuation dynamics that shape every London development project.

Understanding LTV, LTC, and LTGDV: The Three Metrics That Decide Your Facility

Every development finance application gets assessed against three interlocking metrics, and understanding how they interact is probably the single most useful thing a developer can learn before approaching lenders.

Loan to Value (LTV) measures the day-one advance against the current value of the site: typically 65-70% of the land or building’s existing value before any works begin.

Loan to Cost (LTC) measures the total facility against total project costs: land, build costs, professional fees, finance costs, and contingency combined. Most senior lenders fund 80-90% of total cost.

Loan to Gross Development Value (LTGDV) measures the total facility against the projected value of the completed scheme. Senior lenders typically cap LTGDV at 60-65%, with stretched senior facilities reaching 70-75% for strong borrowers on well-evidenced schemes.

The facility size is always set by whichever of these three caps is most restrictive for your specific project, not simply the highest number a lender advertises. A worked example makes this clearer: a developer acquires land for £350,000 and builds three houses at a total build cost of £820,000, with professional fees of £55,000 and a 10% contingency of £82,000, giving a total project cost of £1,307,000. If the projected GDV on completion is £1,800,000, an 85% LTC cap produces a maximum facility of £1,111,000, while a 65% LTGDV cap produces a maximum of £1,170,000. The lower figure of £1,111,000 governs. This is exactly why an experienced broker runs the numbers against all three metrics before approaching lenders, rather than simply quoting whichever percentage sounds highest.

Eligibility Criteria: What Lenders Actually Assess

Beyond the basic requirements of being 18 or over, having UK residency or an appropriate offshore structure, and standard identity verification, development finance lenders assess every application against a consistent set of criteria. Knowing these in advance genuinely improves both the speed and the quality of the terms you receive.

Borrower and team experience. Lenders want to see a track record of comparable completed projects, whether that’s the developer directly or the professional team supporting them: contractor, project manager, and architect.

The development appraisal. A detailed, realistic cost plan with a credible contingency allowance (most lenders expect a minimum of 5-10%, though experienced brokers tend to recommend closer to 10-15% for conversions) is the foundation of every successful application. Lenders treat an undercosted appraisal as a serious red flag.

Planning status. Full planning consent in place, or for permitted development schemes prior approval, significantly widens the field of available lenders and improves pricing. Finance is available pre-planning from a smaller pool of specialist lenders, typically at lower LTV and higher rates to reflect the added risk.

Exit strategy. Every lender wants a credible, evidence-based route to repayment: sale of the completed units backed by genuine comparable evidence, or refinance onto an investment mortgage supported by realistic rental assumptions at current stress-test rates.

Personal guarantee. Almost universal across the development finance market. Alternatives such as a corporate guarantee, a cash deposit, additional security over another asset, or reducing leverage below 50% LTGDV can sometimes be negotiated for experienced borrowers with strong balance sheets.

The Cost of Development Finance: A Worked Example

Using the example above, a £1,111,000 facility against a £1,307,000 total project cost, the day-one land advance is typically 65% of the land value, around £227,500, with the remaining £883,500 build facility drawn in tranches over the construction period, commonly six drawdowns across a 12-14 month programme. At a current senior rate of roughly 0.90-0.95% per month, rolled-up interest on the drawn balances over the build period totals approximately £120,000-£130,000. Add an arrangement fee of around 1% of the facility (£11,000), monitoring surveyor costs across four to six site visits (£500-£1,500 per visit), and legal and valuation fees, and total finance costs typically run to around 12-14% of the facility. It’s a figure every developer should build into their appraisal from the outset, not treat as an afterthought.

The Development Finance Process: From Enquiry to Drawdown

A typical development finance transaction runs through five stages. First, initial enquiry and indicative terms: Platinum Global Bridging Finance reviews the project and issues indicative terms from suitable lenders, usually within 24 hours. Then heads of terms, where once accepted the lender issues formal (non-binding) heads of terms covering facility size, rate, fees, and drawdown structure. Due diligence follows: the lender instructs a valuer for the GDV assessment and a monitoring surveyor to review the schedule of works, while solicitors begin the legal process in parallel. Credit approval comes next, where the lender’s credit committee reviews the full package and issues approval subject to any outstanding conditions. Finally, completion and first drawdown: legal completion takes place and the first tranche is released, with subsequent drawdowns following the agreed build programme. For a well-prepared application with planning already in place, this whole process typically takes four to eight weeks from first enquiry to first drawdown.

The UK Development Finance Market in 2026

The UK development finance market reached approximately £12.5 billion in annual lending volume by late 2025, up 18% year-on-year. Non-bank lenders, including challenger banks, specialist private credit funds, and family offices, now account for around 45% of total market share, and often deliver faster decisions than traditional bank lenders. That depth of competition has kept pricing favourable for well-structured projects: senior development finance rates for experienced developers on strong schemes currently sit at 0.75-0.95% per month, with the Bank of England base rate at 4.25% in mid-2026 adding continued downward pressure on lender funding costs. For developers, that makes 2026 a structurally healthy moment to bring a project to market. Capital is available, and operators with strong track records and well-prepared appraisals are accessing some of the most competitive terms seen in several years.

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