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Development finance for property developers

Most schemes that fail to get funded are not bad schemes. They are badly presented, or taken to the wrong lenders.

We look at the numbers first, tell you what is fundable, and put a clean pack in front of lenders who actually do your type of deal.

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Who it's for

Developers and investors building for sale or to hold, on commercial terms.

  • New build residential schemes, from a handful of houses to blocks of flats
  • Conversions: office to residential, barns, commercial buildings and change of use
  • Mixed use schemes with ground floor commercial
  • Experienced developers scaling up, and newer developers with a strong team around them
How it works

How development finance works

A development loan usually covers part of the land and most of the build. The build element is released in stages against a monitoring surveyor's sign off. Interest is normally rolled up and paid on exit, so the loan is repaid from sales or a refinance.

Lenders size a loan against two tests and lend the lower of the two.

Loan to gross development value (LTGDV)

The loan as a share of what the finished scheme is worth. A valuer sets the GDV, not your agent's best case. This is the main test on most senior loans.

Loan to cost (LTC)

The loan as a share of total costs: land, build, fees and contingency. It tells the lender how much of your own money is at risk alongside theirs.

Senior debt

The first charge loan. Lower cost, lower leverage. Lenders want to see meaningful cash behind it.

Stretched senior

One first charge loan at higher leverage, in place of senior plus mezzanine. Simpler to run, with a higher rate to match. Appetite depends on the scheme, the location and your track record.

Regulatory note: TMP Land Consultants Ltd is not authorised or regulated by the Financial Conduct Authority and only offers non-regulated services. We work with commercial and investment borrowers only and do not arrange regulated mortgages, regulated consumer buy to let agreements or any other regulated activity. We advise and introduce commercial debt enquiries to HyLend Limited, a credit broker and full member of the NACFB. HyLend is our preferred partner for commercial debt brokerage, but we are not limited to them. HyLend arranges non-regulated commercial finance only, and we may receive a share of HyLend's fee. Nothing on this page is an offer of credit or financial advice, and all figures are indicative and subject to underwriting, valuation and lender approval. Read our regulatory information.

Try the development finance calculator

What we need from you

Have these to hand

  • Site address, tenure and a short description of the scheme
  • Planning position: consent reference, conditions and any S106 or CIL
  • Purchase price or current value, and how much you would like to borrow
  • Build cost plan, ideally from a QS or contractor, with contingency
  • Expected sales values or rents, with comparable evidence
  • Your track record: past schemes, sizes and outcomes
  • Assets and liabilities statement for the borrowing entity and guarantors
  • Timescale: when funds are needed and when you expect to exit

Don't have it all? Send what you have. We will tell you what matters most.

Test the numbers first

Run your scheme through the calculator, then send it to us with the figures already filled in.

Open the calculator
How we work

5 steps, one team

  1. 01

    First view

    Send us the headline numbers. We tell you if the scheme is fundable on the terms you expect and what would need to change if not.

  2. 02

    Pack

    We help you build a lender-ready pack: appraisal, cost plan, sales evidence, CVs and planning documents, in the order lenders read them.

  3. 03

    Introduction

    We introduce the deal through our broker partner HyLend to a short list of lenders with real appetite. No broadcasting.

  4. 04

    Terms

    We help you compare indicative terms on total cost, not headline rate: fees, retentions, conditions and exit.

  5. 05

    Drawdown

    We stay involved through valuation, legals and the first drawdown, so small issues do not become delays.

Common questions

How much can I borrow for a development?

It depends on the scheme. Lenders look at LTGDV and LTC and lend the lower result. Indicative senior leverage is often quoted in the region of 60% to 70% of GDV, with stretched senior higher, but every case is underwritten on its own merits.

Do I need planning permission to get development finance?

For the build loan, yes. Lenders want an implementable consent with conditions under control. Land without planning is usually funded with bridging finance first, then refinanced once consent is granted.

Can a first time developer get development finance?

Sometimes. Lenders will look harder at the team around you: contractor, project manager, architect and QS. Expect lower leverage and more scrutiny on the build contract.

What is a monitoring surveyor?

An independent surveyor appointed by the lender. They review the cost plan and programme at the start, then inspect the site before each drawdown to confirm the work has been done.

How long does development finance take to arrange?

With a complete pack and a clean title, a few weeks from terms to drawdown is common. Missing information is the main cause of delay, which is why we build the pack before we go to lenders.

Do you lend the money yourselves?

No. We advise and introduce through our broker partner HyLend. We are not a lender and do not arrange regulated mortgages.

Insights

Further reading

Capital Advisory

Have a scheme that needs funding?

Send us the site, the numbers and the timescale. We will give you a straight view on what is achievable.

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