Pre-Construction
Forward Commit
structured to perform
30+ years · 110+ specialist lenders · £68.6m largest facility
A forward commit is an agreement where a buyer commits to purchase your completed development at a pre-agreed price before construction begins. Unlike forward funding, you arrange your own development finance — but you have certainty of exit from day one.
£5m — £100m+
Loan Size
18 — 36 months
Typical Term
Agreed Purchase Price
Typical LTV
Key Features
What We Offer
Certainty of Exit
Your buyer is contractually committed before you break ground. No sales risk during construction.
You Control the Build
Unlike forward funding, you arrange your own development finance and manage construction. More control, more flexibility.
Stronger Debt Terms
Having a committed buyer dramatically improves your development finance terms. Lenders love the certainty.
Institutional Buyers
Access to housing associations, registered providers, institutional investors and funds seeking forward commit opportunities.
Profit Certainty
With purchase price agreed upfront and build costs budgeted, your profit margin is locked in from the start.
Ideal For
Common Scenarios
Affordable Housing
Housing associations committing to purchase affordable units within your scheme. Section 106 compliance built in.
Build-to-Rent
Institutional PRS investors committing to purchase completed rental schemes. Growing institutional demand.
Social Housing
Registered providers committing to purchase social housing units. Long-term secure income stream for the buyer.
Student Accommodation
University or operator-backed forward commits for PBSA schemes. Strong sector fundamentals.
Forward commitment is a pre-construction sale agreement: an institutional buyer commits to purchase the completed scheme at an agreed price, the developer arranges their own development finance to fund the build, and the deal completes on practical completion.
The structure gives the developer full control over construction and the buyer zero construction-funding exposure. It suits developers with the balance sheet to carry senior development debt through the build, and schemes where the contracted exit price is worth the dev finance carry cost. For institutional buyers, forward commitment is a way to add stock without taking construction risk.
Compare
Forward commitment vs forward funding
Both lock in an institutional buyer before construction begins. The difference is who funds the build — and which side carries the time-value of money through to delivery.
Forward commitment
Developer funds the build. The buyer signs a binding pre-construction purchase agreement; the developer arranges senior development debt and any mezzanine to fund the build through to completion. The deal completes on practical completion.
Pricing: the buyer typically pays a higher headline price (no construction-funding burden, no construction risk). The developer carries dev finance cost through the build — but retains full control of the project and earns more on completion if the cost of debt is reasonable.
Forward funding
Buyer funds the build. The forward funder purchases the site on day one, pays the construction costs as they arise, and pays the developer's profit on practical completion. Zero developer capital is tied up in construction-stage funding.
Pricing: the buyer pays a lower headline price (taking construction risk and giving up time-value of money). For capital-light developers, this can net to a better outcome — no finance carry to absorb. See forward funding for the full structure.
The choice is not abstract: model the dev finance cost over the projected build period against the price concession the forward funder requires. For developers with cost-effective debt and a strong balance sheet, forward commitment usually clears a meaningfully higher net price. For capital-light developers, forward funding removes the equity question entirely.
Fit check
When forward commitment beats forward funding
Three patterns where forward commitment consistently outperforms forward funding on net economics.
Strong balance sheet, comfortable with dev finance carry
Developers with the balance sheet to carry senior development debt through the build — and cost-effective access to that debt — earn the time-value-of-money differential the forward funder would otherwise take. The price uplift on a forward-committed scheme typically more than compensates for the finance carry cost when the developer's blended cost of debt is competitive.
Buyer's price concession on forward funding would be steep
In sectors or markets where forward funders require a steep price concession to take construction risk — for example, smaller schemes with no sponsor track record, or asset classes where institutional appetite is thinner — forward commitment usually nets a better outcome. The developer absorbs construction risk in exchange for a price uplift that exceeds the dev finance cost.
Planning uncertainty or construction-sequencing complexity
Where a scheme carries genuine planning or construction-sequencing risk, forward funders typically discount heavily (or decline to engage) — the structure exposes them directly to construction problems. Forward commitment isolates the buyer from construction risk, letting the developer manage the complexity and the buyer take a clean asset at completion. The pricing reflects that.
Talk through whether forward commitment or forward funding fits your specific scheme — arrange a call or model the trade-off on the development finance calculator.
Forward Commit FAQ
Common forward commitment questions
What is forward commitment?
Forward commitment is a structure where an institutional buyer contractually agrees to purchase a completed development at an agreed price before construction begins. Unlike forward funding, the developer arranges their own development finance and carries the construction-stage cost through to delivery. The buyer's commitment underwrites the developer's exit and typically improves the senior-debt terms because the take-out risk is contracted rather than market-dependent.
What is the difference between forward commitment and forward funding?
In forward commitment the developer funds the construction (usually through senior development debt and equity) and the buyer purchases at completion at a pre-agreed price. In forward funding the buyer funds the construction directly — buying the site on day one, paying the build costs as they arise, and paying the developer's profit on practical completion. Forward commitment keeps the developer in control of the build (and earning a higher net sale price); forward funding removes the construction-funding burden entirely (in exchange for a lower headline price). Each suits different developer balance sheets and scheme sizes.
When is forward commitment better than forward funding for a developer?
Forward commitment usually beats forward funding for developers with strong balance sheets, schemes where the buyer's price concession to forward-fund would be steep, and schemes with planning uncertainty (where the buyer would otherwise discount heavily for construction-risk). It also fits where the developer wants direct control over construction sequencing, contractor management and value engineering — control that is materially looser under a forward-funding structure.
Sister product
Considering forward funding instead?
For capital-light developers and larger schemes, forward funding may net better economics. Same buyer pool, different structure — the developer doesn't carry construction-funding cost, in exchange for a lower headline price.
See Forward Funding →Ready to Discuss Your Project?
Get a development appraisal or arrange a call with a specialist.