Development finance is funding designed to facilitate either new builds, part-builds, or comprehensive renovations. Property developers, investors, and landlords often call upon this property development mortgage to give them the capital they need to proceed with their project. For smaller refurbishments that are generally just aesthetic in nature, there are other property development finance options, such as bridging finance or short-term refurbishment finance.
The total amount you can borrow will be based on a percentage of the gross development value (GDV) after all works have been finalised – aka, the expected market value of the property. Development loans, whether commercial or not, usually have between six to 24-month terms, subject to the scope and type of project.
Development loans are usually arranged on an interest-only basis with the interest rolled up into the loan, so no monthly payments are required. The exit on this type of loan is generally the sale of the property. Rates can often be negotiated, as lenders will assess each case differently depending on the circumstances, also taking into account arrangement and exit fees.
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How can we help you arrange suitable development finance in the UK?
Our team of specialist finance brokers can source development finance for residential, commercial, and mixed-use projects. We’ve spent years helping new and experienced property developers find the finance they need to start and complete their developments.
We have significant experience in arranging property development loans, and we have an in-depth understanding of how to present your individual case to each lender to secure the best possible outcome. We will follow the application process to the letter, submitting all necessary drawings, plans, budget forecasts, and a schedule of works to the lender to ensure the best chance of a successful application.
We have unlimited access to the market and have relationships with a panel of specialist property development lenders and other institutions, which means we’re in the perfect position to find you a tailored solution.
At CBM Financial Partners, we deliver truly independent solutions through our relationships with over 150 finance providers, providing proactive advice while dealing with all aspects of our clients’ circumstances. We aim to make arranging your property development finance simple and easy, however complex your needs may be.