Property Development Finance

Here at UK Property Finance Ltd, we are a “Whole of Market” broker with access to the best rates available, enabling us to deliver affordable financing for all types of property purchases and development. 

  • 90% LTV and/or 75% loan of total GDV
  • Loan amounts range from £25,000 to £100,000,000
  • Finance for new builds and conversions
  • Multi-unit and single-unit development projects
  • Multi-use property development
  • Commercial development projects
  • Finance for both experienced and first-time developers and investors
  • Options for development finance, including regulated and unregulated
  • Funding for the acquisition and development of partially completed projects
  • 100% of the build cost and 70% of the land cost from day one of the project are available
  • Joint venture opportunities

 Key features of development finance

  • Loans available from £25,000 upwards
  • There are no early repayment fees for the majority of the development loans we offer; however, there may still be exit fees
  • First-time developers and experienced developers are welcome to apply
  • Funds are released in stages in accordance with project requirements, and interest is charged only on cash received
  • Secured loans are available where other properties can be used as collateral
  • Flexible terms to meet your individual project needs: If your project comes in under budget, you will not be required to borrow the full agreed-upon amount
  • Competitive and low-interest rates for developers with a proven record of success

Development finance is an effective way to bring projects to fruition for the goal of high profitability where funds accessible by your own means are limited. Please be aware the below is just for example purposes only, contact us to discuss your project specifically.

Note Value

Your Outlay


Development Finance Facility


Overall Project Build Cost


Interest Payable


Lending Fees


Solicitor Charges


Projected Sale Price


Expected Profitability


Criteria for development finance

As a general rule of thumb, the following lending criteria will be required:

  • Loans starting from £25,000 with no upper limit
  • Loan terms of up to 24 months
  • Interest rates range from around 7% pa
  • Interest is ‘rolled up’ and paid at the end of the loan period; therefore, there are no monthly interest charges
  • Average lender arrangement fees of 1-2% of the entire loan amount
  • In some instances, exit fees will be charged, usually when the LTV is high
  • Land purchase LTV of 75% and build cost of 100%
  • Drawdowns will be made in line with cash flow requirements, subject to careful monitoring by the lender using a QS/monitoring surveyor
  • Valuations performed by the lender both before development and after to assess the value of the completed project (GDV) and the initial build costs

Advantages of development finance

The most beneficial aspect of development finance is that it gives developers and investors access to large amounts of money in order to finance big development projects.

Below is an infographic displaying 8 reasons why property developers should use UK Property Finance Ltd

Development Finance infographic

The total amount needed is carefully assessed, with funds being released at key stages of the development. The entire cost of the build can be borrowed with no specific upper limits, giving the developer the flexibility to bring the project to a successful completion.

Advantages include:

  • Development loans can be secured against buildings, land, and developments considered unsuitable by other lenders, including derelict and run-down properties.
  • Because development finance can be repaid in a short period of time, overall borrowing costs can be kept to a minimum.
  • Funds are released in stages, according to the progress of the project, and interest is only charged on money the borrower has actually received; therefore, there is the opportunity to keep costs down.
  • There are no real limitations on the amount that can be borrowed, provided that sufficient proof that the development will be successfully completed is provided to the lender. 100% of the total construction cost can be borrowed.

Costs and fees associated with development finance

There are various fees you will need to take into account when calculating the total cost of your development project:

Facility Fee: Also commonly referred to as the arrangement fee. This fee is typically calculated as a percentage of the total loan amount.

Interest Rate: Interest on development finance can be paid on a monthly or yearly basis. Yearly rates are typically around 7%, and monthly rates are around 1%.

Exit Fee: Also referred to as a completion fee, which is calculated as a percentage of the total loan cost, lenders may calculate the exit fee as a percentage of the value of the completed project as opposed to the loan value.

Broker Fee: The industry standard is around 2% of the net loan.

Valuation Fees: As development finance is a secured type of loan, it will require that a full valuation of the assets offered for security be valued by a neutral third party. The completed project will typically be valued at the same time.

Application Fee: Some lenders will impose a fee simply for making an application or may charge a commitment fee.

Legal Fees: Any required legal advice or the need for a solicitor for any reason will result in legal fees that will have to be paid by the borrower.

Administration Fees: These fees can refer to just about any administrative work and are therefore somewhat vague in terms of what they include. UK Property Finance does not charge any administration fees.

Monitoring Fees: Due to the monitoring required by the lender on each development to ensure that the project is reaching its predetermined goals, you will need to pay monitoring fees. This is to ensure that the funds being released are allocated as agreed and that the lender’s investment is safe.

Drawdown Fees: This is a fee that is sometimes imposed every time funds are released to the developer. The fee can be a fixed amount or a percentage of the project.

Telegraph Transfer Fee: Also referred to as TT fees, this is the fee charged by the banks handling the transfer of funds, which in the case of a development loan will involve large sums of money. TT fees tend to be low and are typically fixed.

Development finance: the process

Development loans are typically tailored to meet the individual developer’s requirements according to the specifics of the project. When applying for development finance, there are several key stages that you can expect.

  • Initial enquiry and a non-obligation, free consultation
  • Comparison of deals from specialist lenders offering property development finance in the UK
  • Submission of the initial application to suitable lenders
  • Agreement in Principle issued by the lender to the borrower
  • Visit the site to establish the viability of the development project
  • Independent valuation of the project’s total value
  • Formal offer and terms of loan issued
  • Solicitor involvement for legal advice and support
  • Completion of the loan and the first payment released (drawdown)
  • Periodic instalments to fund each stage of the development
  • Repayment of the loan as agreed at the end of the loan term

The above should be taken into consideration.

Example of development finance

A development loan is a short-term lending facility used for the purchase of land and/or property intended for development. The funds are released in stages or drawdown payments upon completion of pre-agreed work. At each drawdown, a surveyor (usually the surveyor who made the initial valuation) will visit the site and authorise the release of further funds. This is to ensure that all pre-arranged work stages are being met and that the funds are being used appropriately.

Typical project costing breakdown

Site cost/valuation: £800,000
Build cost (released in stages): £600,000
End valuation: £2.4million
Developer profit: £1 million


Since the property was mainly let on standard assured short-hold tenancy agreements after 6 months, UK Property Finance was able to arrange long term commercial finance to repay the development loan via a high street funder.

Our swift and proactive approach enabled our client to maximise profitability by ensuring the funding was available in time to complete the build, thus enabling students returning to university to habit the pods.