Property development finance is designed to help developers to fund development projects such as new builds, conversions and refurbishments. It can fund residential, mixed use and commercial projects. Property development finance is often a short-term loan solution designed to cover the development period of a project and is repayable within no more than 3 years. Below we have explored some of the leading options available for property finance.
Companies are ranked in no particular order.
Company | Max LTV | Max Term | Max Total Amount | |
---|---|---|---|---|
ABC Finance | Not stated | Not stated | Not stated | |
Aldermore | Not stated | 30 months | £25 million | |
Assetz Capital | 75% | 2 year | £10 million | |
Cambridge & Counties Bank | 65% | 9 months | £2 million | |
Close Brothers | Not stated | 18 months | £20 million+ | |
CrowdProperty | 70% | Not stated | Not stated | |
Cynergy Bank | Not stated | 2 years | Not stated | |
Eastern Credit | 50% | 36 months | Not stated | |
Hampshire Trust Bank | 65% | 36 months | Not stated | |
Hope Capital | 75% | 18 months | £5 million | |
Hunter Finance | 60% | 15 months | £2.5 million | |
LendInvest | 70% | 24 months | £10 million | |
NatWest | Not stated | 36 months | Not stated | |
Oblix Capital | 85% | 24 months | £10 million | |
Octopus Real Estate | Not stated | 36 months | £100 million | |
Paragon Bank | Not stated | Not stated | £35 million | |
Rangewell | Not stated | 24 months | No maximum | |
Redwood Bank | 70% | 12 months | £3 million per property (£5 million per business) | |
Royal Bank of Scotland | Not stated | 36 months | Not stated | |
Saffron Building Society | Not stated | Not stated | £5 million | |
Sancus | 75% | 24 months | £10 million | |
United Trust Bank | Not stated | Not stated | £30 million | |
West One Loans | 70% | Not stated | £15 million |
1. ABC Finance
- Offers a brokerage service specialising in property finance including development finance
- Search a large range of lenders to find the best results in fast timescales
- Suitable for construction, conversion and heavy refurbishment
- Applications can take 6 weeks
- Interest is generally repaid at the end of the loan term
- Typically can borrow up to 65-70% of the property value
- Loan to the cost of the project can vary from 80-90%
- Rates from 4.5% per annum depending on the amount and experience
- Fees may apply including arrangement, broker, valuation and professional fees
- Apply over the phone
Website ABC Finance Property Development Finance
Read the full ABC Finance review
2. Aldermore
- Offers a range of property development finance
- Suitable for new builds, conversions and refurbishments
- Includes mixed use and purpose built student accommodation
- Minimum loan of £1 million
- Maximum loan of £25 million
- Up to 85% loan to cost
- Maximum gross development value of 60%
- Terms up to 30 months
- Fast drawdown on funds
- Also offers VAT loans for developers
Website Aldermore Property Development Finance
Read the full Aldermore review
3. Assetz Capital
- Offers property development lending solutions
- Will seek a competitive solution tailored to your needs
- Suitable for residential, commercial or mixed use
- Minimum loan of £500,000
- Maximum loan of £10 million
- Up to 75% LTGDV including interest
- Borrower rate from 6.99%
- Terms up to 2 years
- Exit fees of 1% of the facility amount
- Apply over the phone
Website Assetz Capital Property Development Finance
Read the full Assetz Capital review
4. Cambridge & Counties Bank
- Offers property finance loans including refurbishment loans
- Short-term funding solution that can be converted into a longer-term loan
- Suitable for investors, landlords and developers
- Available for HMOs and MUBs
- Interest roll-up options are available
- Up to 65% LTV
- Maximum loan of £2 million
- Terms up to 9 months
- No valuation fee is payable until the loan is approved
- Apply over the phone or in branch
Website Cambridge & Counties Bank Property Development Finance
5. Close Brothers
- Offers property development finance for residential and commercial
- Suitable for HMOs, MUBs and mixed use developments
- Minimum loan of £750,000
- Maximum loan of £20 million and more
- Up to 85% loan to cost
- UP to 65% value of GDV
- Terms of 12 to 18 months
- Available for experienced property developers
- Available in England, Wales, Scotland and Northern Ireland
- Apply over the phone
Website Close Brothers Property Development Finance
Read the full Close Brothers review
6. CrowdProperty
- Offers a variety of property finance products including development finance
- Suitable for new builds and property development
- Available on residential, mixed use and HMOs
- Drawdown facility
- Up to 70% LTV
- 100% of the development costs
- Secured by a first charge
- Informal offer in 24 hours
- Available in England, Wales, Scotland and Northern Ireland
- Apply online
Website CrowdProperty Property Development Finance
Read the full CrowdProperty review
7. Cynergy Bank
- Offers a range of property finance solutions
- Includes property investment and property development loans
- Can be used to buy or develop a property
- Repayable as a lump sum
- Interest may be able to be capitalised
- Terms up to 2 years
- Pricing and LTV are dependent on the size and nature of the development
- Available for properties in the UK
- Enquire over the phone
Website Cynergy Bank Property Development Finance
8. Eastern Credit
- Offers development finance
- Suitable for residential, commercial and industrial
- Restrict exposure initially to 50% of LTV
- The loan can increase over time
- Maximum term of 36 months
- Can be used for ground-up developments for residential and commercial new builds
- Commercial and residential property conversions
- Refurbishments and extensions
- Barn conversions
- Apply over the phone or request a quote online
Website Eastern Credit Property Development Finance
Read the full Eastern Credit review
9. Hampshire Trust Bank
- Offers bespoke development finance
- Suitable for new builds and refurbishment projects
- Caters for residential projects
- Up to 65% of the gross development value
- Terms of 12 to 36 months
- Can be used for developments including students accommodation and mixed use
- Support from experienced specialise lender
- Available for properties in England and Wales
- Apply over the phone
Website Hampshire Trust Bank Property Development Finance
Read Hampshire Trust Bank Reviews
10. Hope Capital
- Offers a range of development finance products
- Renovation product for property refurbishment with substantial works
- Scottish Collection for property development in Scotland
- Refresh product for minor refurbishment
- Up to 75% LTV
- Rates from 0.39%
- Minimum loan of £50,000
- Maximum loans of £5 million
- Terms from 3 to 18 months
- Apply over the phone or enquire online
Website Hope Capital Property Development Finance
Read the full Hope Capital review
11. Hunter Finance
- Offers development finance loans
- Caters for residential developments
- Suitable for new builds, refurbishments and conversions
- Minimum loan of £100,000
- Maximum loan of £2.5 million
- Terms of 1 to 15 months
- Up to 60% of LTV and 100% of build costs
- No broker fees or upfront costs
- Fast decisions
- Apply over the phone or enquire online
Website Hunter Finance Property Development Finance
Read the full Hunter Finance review
12. LendInvest
- Offers development finance
- Also offers development exit
- Maximum loan of £10 million
- Up to 70% of LTGDV
- Terms up to 24 months
- Interest rates from 7.5%
- Quick decisions
- Fast funding
- Dedicated in-house experts
- Enquire online
Website LendInvest Property Development Finance
Read the full LendInvest review
13. NatWest
- Offers property development finance
- Only available for residential developers
- Minimum loan of £50,000
- No maximum loan amount stated
- Variable interest rate
- Terms up to 3 years
- Interest-only loans
- No early redemption charges
- Professional valuation needed
- Enquire online or contact your Relationship Manager
Website NatWest Property Development Finance
Read the full NatWest review
14. Oblix Capital
- Offers capital development finance
- Suitable for ground-up projects and large conversions
- Caters for residential, commercial with residential planning, student accommodation and flats
- Funding up to 85% LTC and 100% of building costs
- Minimum loan of £750,000
- Maximum loan of £10 million
- Terms of 6 to 24 months
- Offers margins from 8.5%
- Available in England, Wales and Scotland
- Apply over the phone
Website Oblix Capital Property Development Finance
Read the full Oblix Capital review
15. Octopus Real Estate
- Offers a choice of development lending
- Green Homes Alliance offering discounted finance for energy homes
- Development Light provides funding from £2-£5 million
- Development finance for £5-£100 million
- Up to 70% of LTGDV
- Interest rates from 6.75%
- Terms from 12 to 36 months
- Fast-tracked initial approval process
- Dedicated and experienced development finance team
- Apply over the phone
Website Octopus Real Estate Property Development Finance
Read the full Octopus Real Estate review
16. Paragon Bank
- Offers development finance
- Suitable for residential projects
- Caters for multi-residential, new builds, conversions and refurbishments
- Tailored plans
- First charge loan
- Loans from £400,000 to £35 million
- Up to 70% of GDV and up to 90% of the cost
- They will take planning gained into account
- Available in England and Wales
- Apply over the phone or enquire online
Website Paragon Bank Property Development Finance
Read the full Paragon Bank review
17. Rangewell
- Offers development finance
- Suitable for all property types
- Caters for construction, conversion and heavy refurbishment
- Minimum loan of £50,000
- No maximum loan amount
- Up to 70% GDV
- Terms of up to 24 months
- Choice of interest-only or repayment
- Roll up cost option
- Apply online or call them
Website Rangewell Property Development Finance
Read the full Rangewell review
18. Redwood Bank
- Offers refurbishment mortgages
- Loans from £125,000 to £5 million
- Up to £3 million per single property
- Up to 70% LTV
- Terms of up to 12 months
- Interest-only
- Can be transitioned into a mortgage
- Specialist team to support you
- Must have a minimum of 2 years experience on 2 properties
- Apply over the phone
Website Redwood Bank Property Development Finance
19. Royal Bank of Scotland
- Offers real estate finance development loans
- Suitable for residential properties
- Minimum loan amount of £50,000
- No maximum loan amount stated
- Terms up to 3 years
- Variable interest rate
- No early redemption charges
- Requires a professional valuation
- Apply over the phone
Website Royal Bank of Scotland Property Development Finance
Read the full Royal Bank of Scotland review
20. Saffron Building Society
- Offers development finance
- Bespoke finance
- Designed for experienced property developers
- Minimum loan amount of £300,000
- Maximum loan amount of £5 million
- Up to 75% of project costs
- Up to 65% of GDV
- Dedicated support team
- Available for properties in England and Wales
- Apply over the phone
Website Saffron Building Society Property Development Finance
Read the full Saffron Building Society review
21. Sancus
- Offers property development loans
- Suitable for residential properties
- Caters for ground-up development and major structural renovation
- Minimum loan of £500,000
- Maximum loan of £10 million
- Up to 75% LTV and up to 85% LTC
- Terms from 6 to 24 months
- Interest rates from 7% per annum
- Available throughout the UK
- Apply over the phone
Website Sancus Property Development Finance
Read the full Sancus review
22. United Trust Bank
- Offers property development finance
- Provides acquisition, construction and sales period funding
- Caters for residential, mixed use and commercial projects
- Minimum loan of £1 million
- Maximum loan of £30 million
- Up to 65% GDV
- Offers Housing Accelerator Fund to support SME housebuilders and developers
- Also provides development exit funding
- Available in England and Wales
- Enquire online or call them
Website United Trust Bank Property Development Finance
Read the full United Trust Bank review
23. West One Loans
- Offers development finance
- Suitable for residential-led schemes
- Commercial aspects must be less than 40% of mixed use schemes
- Minimum amount £1 million
- Maximum amount £15 million
- Up to 70% LTV
- Offer up to 100% of building costs
- Provided to experienced developers with minimum 2 successful projects
- Available in England and Wales
- Apply over the phone
Website West One Loans Property Development Finance
Read the full West One Loans review
How does property development finance work?
Property development finance is a special type of finance designed to help developers to fund their projects whether that is a new build project, refurbishment or conversion, and the funding is often released in phases when needed. If the funding is released in stages, you may need to prove that the project is on track and meeting the milestones set out in your application. The loan is often interest-only and repaid at the end of the loan term when the property is complete.
How much can I borrow?
The amount you can borrow will depend on the property you are lending against, the project costs and your experience. Many lenders fund multi-million pound finance projects up to £35 million and others don’t put a limit on the amount they lend. The amount they lend will be impacted based on the value of the property and the cost of the refurbishment as many limit the loan to a maximum of up to 85% of the loan to value but they may lend up to 100% of the build costs.
How much will property development finance cost?
Many lenders do not publish the cost of their property development finance products but those that do vary from 4.5% to 8.5% interest per annum. There are other fees that you may need to take into consideration which can include arrangement fees, valuation fees, broker fees if you use one, legal fees and administration fees.
How long can I borrow money for?
Property development finance is designed as a short-term loan that can last up to a maximum of 36 months with some providers but it can be lower than this.
How to apply for property development finance?
Most providers require borrowers to contact them over the phone to discuss their application, but you may be able to enquire online. Some lenders will require developers to prove their experience in property development such as having a minimum length of time developing properties or having developed a specified number of properties successfully.
The application process will include a valuation of the property and you may need to submit a development plan. Due to the amount of information required and the checks needed, applications are often not turned around too quickly and can be a few weeks. If planning is required on the property to develop it, you may need to seek planning permission and get approval first.