Frequently Asked
Questions

Yes. Auction purchases typically require completion within 28 days. We can arrange bridging finance within this timeframe — sometimes as quickly as 7–10 days for straightforward cases. The bridge is then refinanced into a development facility if the site has development potential.

Regulated bridging applies when the borrower (or a close family member) will live in the property. Unregulated bridging applies to commercial, investment, and development purposes. All development-related bridging we arrange is unregulated — it is commercial property finance, not consumer lending.

For commercial property and development purposes, a bridging loan is often the right tool — provided the exit route is clear and realistic. Bridges make sense when speed is paramount (auction purchases, chain breaks, time-limited opportunities), when a site needs short-term funding before a development facility opens, or when planning is pending and a senior development lender is not yet able to commit. The key question is exit: how are you repaying the bridge, and how confident are you in the timing? A bridge with a clear exit — refinance into a development facility on planning grant, or completion of a development and sale — is a sensible, well-used funding structure. A bridge taken without a credible exit is expensive problem-deferral. We assess exit viability before recommending a bridge, and we arrange the subsequent development finance alongside it where needed.

Profit on cost is your net profit divided by total development costs — lenders typically require a minimum of 20% for senior debt. Profit on GDV is your net profit divided by the Gross Development Value — typically 15%+ minimum. Both are key viability metrics that determine whether a lender will fund your scheme.

LTC is the total loan amount expressed as a percentage of total development costs. Senior lenders typically cap at 60–70% LTC. With mezzanine, you can reach 85–90% LTC. The remaining percentage must come from your own equity.

Stamp Duty Land Tax applies to development land purchases at standard commercial rates: 0% up to £150k, 2% on £150k–£250k, and 5% above £250k. For mixed-use sites and some residential land, different rates may apply. SDLT is a significant cost and is factored into every development appraisal we produce.

At minimum: a solicitor experienced in development finance, an architect or designer, a contractor or builder with verifiable track record, and ideally a quantity surveyor. For larger schemes, you may also need a planning consultant, structural engineer, and project manager. The stronger your team, the better your terms.

Build costs vary enormously by location, specification, and build type. As a rough guide: basic residential conversion £80–£120/sqft, standard new-build houses £120–£180/sqft, apartments £140–£200/sqft, high-specification London apartments £200–£350/sqft. Lenders will benchmark your costs against industry data.

Yes. Scotland uses a different legal system (Scottish property law, standard securities instead of legal charges, and missives instead of exchange of contracts), but we have lenders experienced in Scottish development funding. We cover the whole UK including Scotland, Wales, Northern Ireland, and the Crown Dependencies.

Section 106 (S106) is a planning obligation requiring developers to contribute to community infrastructure — often affordable housing, education, healthcare, or transport improvements. S106 costs must be factored into your development appraisal. Lenders will scrutinise your S106 obligations carefully as they directly impact viability.

The Community Infrastructure Levy is a fixed charge per square metre of new development, set by local authorities. Unlike Section 106, CIL rates are non-negotiable. CIL must be paid on commencement of development and is factored into your total project costs. Exemptions exist for affordable housing and self-build.

A development exit (or "dev exit") loan replaces your development finance facility with a cheaper term loan once construction is substantially complete. It gives you time to sell remaining units at market price rather than being forced into fire sales by an expiring development facility. Rates are typically 50–70% cheaper than development finance.

Yes. If you have a site in mind but no planning permission, we can advise on the likely funding structure, produce an indicative appraisal, arrange bridging finance for the land purchase, and plan the transition to development finance once planning is granted. We help you model the numbers before you commit.

True 100% development finance — every pound of cost funded with no equity from you — is rare and only available on exceptional schemes (proven track record, site at significant discount to market value, strong pre-sales). The realistic route to near-100% is a stacked structure: senior debt at 60–70% LTC, mezzanine on top to reach 85–90% LTC, and the final 5–10% from equity co-investment. We arrange all three layers as a single coordinated structure — see our Mezzanine Finance and Equity Finance pages.

In commercial property development the two major types are debt finance (senior development loans, mezzanine, bridging — money you borrow and repay with interest) and equity finance (joint ventures, profit-share investors, family offices — money invested in exchange for ownership or returns). Most schemes blend the two: senior debt covers 60–70% of cost, mezzanine fills the gap to 85–90%, and equity covers the rest. We structure across the full debt/equity stack rather than just placing a single loan.

A DFI (Development Finance Institution) is typically a government-backed or multilateral lender funding economic development — examples include British International Investment (BII, formerly CDC Group), the European Investment Bank, the IFC at the World Bank, and KfW in Germany. They typically fund infrastructure, healthcare and large-scale schemes in emerging markets. We are not a DFI — we are a specialist UK property development finance broker arranging facilities from £250k to £100m+ across our 110+ lender panel for private developers, family offices and PLCs.

The "40%" reference is usually to the Help to Buy: London Equity Loan, where the government lent up to 40% of a residential purchase price (vs 20% in the rest of England). That scheme closed to new applicants in October 2022. It is a residential consumer scheme — not relevant to commercial property development finance, which uses entirely different products: senior debt, mezzanine, equity and forward funding. If you are looking to fund a development project rather than buy a home to live in, see our Finance section.

The 28/36 rule is a US personal-finance heuristic — spend no more than 28% of gross income on housing and 36% on total debt — used by US lenders to underwrite residential mortgages. It does not apply to UK commercial property development finance, which is underwritten on project-level metrics: LTGDV (Loan to Gross Development Value), LTC (Loan to Cost), profit-on-cost, profit-on-GDV, and lender-specific covenants on pre-sales, contingency and developer experience. The borrower's personal income is generally not a primary criterion for commercial dev finance.

The "big five" UK banks — HSBC, Barclays, Lloyds Banking Group, NatWest Group and Standard Chartered — dominate retail and corporate banking by assets. For commercial property development finance, however, these mainstream institutions are rarely the right source. High-street credit committees move slowly, leverage is conservative, and staged construction drawdowns sit outside their standard product set. The specialist development finance market is served by challenger banks (OakNorth, Shawbrook, Together, Metro), debt funds, family offices, UHNW lenders and specialist institutions — lenders who understand GDV-based underwriting, monitoring surveyor sign-off, and the construction risk profile of a live development site. developing.fund works with 110+ such specialist lenders, not the high-street big five, which is exactly why we can offer higher leverage, faster decisions and structures the mainstream banks cannot match.

The "2% rule" is a US-originated property investment heuristic that suggests monthly rental income should equal at least 2% of the purchase price — so a property bought for £100k should rent for £2k per month. In most UK markets this benchmark is unachievable: gross yields of 5–8% per annum (roughly 0.4–0.7% per month) are typical, with yields compressing further in London and the South East. The rule has limited practical application to UK commercial property development finance. Where yield benchmarks do matter for development finance is at the exit: if you are building for Build-to-Rent, PBSA, or Extra Care, lenders and forward funders underwrite the completed value on a yield-capitalisation basis. A BTR scheme in a regional city might be valued at a 5–5.5% net initial yield; PBSA at 5.75–6.25%. These yield assumptions directly affect your GDV, your LTGDV, and ultimately whether the numbers stack for a development loan. We model exit yield assumptions into every development appraisal we produce.

Raising finance for property development follows a defined sequence: (1) Prepare the numbers — a credible development appraisal showing land cost, build cost, fees, finance cost, GDV and profit margin. Lenders will not engage without this. (2) Confirm your equity — most development lenders require 25–40% of total project costs as developer equity on senior debt alone; mezzanine can reduce this to 10–15%. (3) Have your professional team in place — an architect, QS, solicitor, and contractor with a verifiable track record. For first-time developers, a strong team compensates for limited personal track record. (4) Approach the right lenders — specialist development lenders, challenger banks, debt funds and family offices are the primary sources; high-street banks rarely suit construction finance. We produce the appraisal and cashflow, structure the capital stack, and approach the right lenders across our 110+ panel — that is most of the work in raising development finance.

Property development in the UK remains profitable in 2026, but margins vary significantly by location, scheme type and capital structure. The typical target is 20% profit on cost (or 15–18% on GDV) — the threshold at which most specialist lenders will engage. Residential development in areas of structural undersupply (the South East, major Northern cities, university towns) continues to generate strong returns. Inflationary build costs, elevated finance rates, and prolonged planning timelines have compressed margins on thinner schemes, making disciplined appraisal work more important than at any time in the last decade. Build-to-rent and PBSA schemes are generating institutional-grade returns through forward funding structures. The short answer: yes — but the margin is in the deal structure and the numbers, not simply in the land. We model scheme viability across different capital stacks for every initial enquiry. This is general commercial information only and is not regulated financial or investment advice; for investment decisions, speak to an independent financial adviser.

The UK's official development finance institution (DFI) is British International Investment (BII), formerly known as CDC Group — a government-owned impact investor that finances private-sector businesses and infrastructure projects primarily in Africa and South Asia. It is emphatically not a source of finance for UK property development. Separately, the UK Infrastructure Bank (UKIB) was established in 2021 to co-finance major UK infrastructure — again, a public body, not a commercial property lender. The term "development finance institution" or DFI carries a specific meaning in international development circles that is entirely distinct from UK property development finance. Commercial development finance for UK property — the staged construction loans, mezzanine and equity structures that fund residential, commercial and mixed-use schemes — is provided by specialist lenders: challenger banks, debt funds, family offices and UHNW investors. developing.fund is an independent broker across a panel of 110+ such specialist commercial lenders. If you are looking for finance to develop a UK property scheme — not international infrastructure — we are the right starting point.

The top development finance lenders in the UK are not the high-street banks. The specialist market is served by challenger banks (Shawbrook, OakNorth, Together, Paragon), dedicated debt funds (OakNorth, Assetz Capital, and a number of institutional debt platforms), family offices with a UK property mandate, and UHNW private lenders — most of whom do not publish lending data or public rate cards. "Top" in this market means the provider whose current appetite fits your deal: scheme size, geography, asset class, leverage requirement, and your track record all affect which lenders are genuinely competitive for any given scheme. The development finance lenders best placed for a £1m residential conversion in the North West are not the same as those best placed for a £50m BTR scheme in London. We maintain live relationships across 110+ specialist development lenders and place each scheme with the provider whose current terms best match the deal — including negotiating terms rather than simply accepting a standard offer. Approaching lenders cold from a list gives you their standard rate; approaching through an active relationship typically delivers 10–15% better terms.

A bridging development loan is not a formally defined single product — the phrase most commonly describes the combination of a bridging loan and a development finance facility used in sequence on the same site. In practice: a bridging loan is used first to acquire the land quickly (often before planning permission is granted), because development lenders require consent before committing. Once planning is secured, the bridge is refinanced into a full development finance facility, which then funds the construction in staged drawdowns. The two facilities have different structures — a bridge is typically a lump-sum advance against current site value; a development loan is staged and sized against the completed scheme's gross development value (GDV) — but arranging them as a coordinated strategy from the outset is cleaner than treating them separately. Occasionally "bridging development loan" refers to a single facility that covers both the acquisition and early construction phases — a hybrid product offered by a small number of lenders. Either way, we plan the bridge-to-development transition from the first call, arrange both facilities, and manage the refinance between them.

Lending money to a family member for a residential purchase — whether structured as a gift or a loan — is a personal finance and legal matter outside the commercial development finance we arrange. Practically: most residential mortgage lenders treat a repayable family loan as a liability in the affordability assessment, which can reduce what your daughter can borrow; a genuine non-repayable gift (with a gift letter) is treated differently but may have inheritance tax implications depending on the amounts involved. For the right structure — loan agreement, gifted deposit letter, or trust arrangement — the best starting points are an independent financial adviser (IFA) and a solicitor experienced in residential conveyancing. developing.fund arranges unregulated commercial development finance: construction loans, bridging, mezzanine, and equity for developers and investors. If either of you has a development project that needs funding rather than a home purchase, we are happy to discuss the numbers.

Development finance is a specialist short-term commercial loan used to fund the construction, conversion or substantial refurbishment of property. Unlike a residential mortgage, funds are released in staged drawdowns as the build progresses — typically signed off by an independent monitoring surveyor — interest is rolled up rather than paid monthly, and the facility is repaid in full when the completed units are sold or refinanced onto term debt. It is sized against the gross development value (GDV) of the finished scheme, giving developers access to significantly more capital than a standard commercial mortgage against bare land provides. In the UK, development finance is an unregulated commercial product — distinct from FCA-regulated consumer mortgages — used by developers from first-time builders through to PLCs, across schemes ranging from £250k single-plot conversions to £100m+ large-scale residential and mixed-use developments.

Yes — property development in the UK can be profitable, but the profit is in the deal structure and the numbers, not simply in the market. Lenders typically require a minimum of 20% profit on cost (or 15% on GDV) before financing a scheme, which gives a practical indication of the returns developers target. Well-structured residential development in areas of undersupply — the South East, major Northern cities, university towns — regularly delivers 20–30% profit on cost. Build-to-rent and PBSA schemes tend to produce lower margin but more predictable returns, often via forward funding structures. The risks that erode profit are land purchased at too high a price, build costs exceeding the budget, planning delays extending the finance period, and exit values (GDV) falling short of the appraisal. A disciplined development appraisal — one that stress-tests cost overruns, programme delays and downside GDV scenarios — is the single most important tool for protecting development profit. We model viability across different capital stacks for every initial enquiry. This is general commercial information only and is not financial or investment advice; for guidance on property development as an investment, speak to a regulated independent financial adviser.