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Last updated Reviewed by our Clifton International finance team.
In short
How does UK property development finance work?
UK development finance funds ground-up schemes, conversions and major refurbishments, typically at 70%–75% of total costs and up to 65% of gross development value (GDV), released in stages against certified works. Terms usually run 12–24 months, drawdown typically takes 8–12 weeks from application, and the loan is repaid from unit sales or a refinance such as development exit finance.
Land purchase and build costs can be combined in a single facility.
Interest is usually rolled up, so no payments are made during construction.
Planning status, contractor track record and developer equity drive leverage.
Exit is unit sales, a bulk sale or refinance onto investment debt.
Reviewed by James Caldwell, Director, Clifton International.
Content review: — guidance, worked example and FAQs on this page.
Rate review: October 2026— loan-to-cost, term and drawdown figures on this page.
At a glance
Key facts
Figures reviewed:
Loan-to-cost
70%–75%Senior debt, typical range; subject to scheme, experience, valuation and underwriting.
Loan-to-GDV
Up to 65%
Facility size
£500k – £50m+
Term
12–24 months
Time to first drawdown
8–12 weeks
Drawdown
Staged / monthly
Pricing
Indicative, case by caseLender-neutral guidance only; not live lender pricing or a quote.
Indicative figures for guidance only, correct as at October 2026. Rates, costs and timelines vary by lender, borrower profile, asset and jurisdiction, and are not an offer of finance. How we derive these figures.
Methodology and assumptions
Figures are compiled by Clifton International specialists from live lender term sheets, indicative quotes and completed transactions arranged over the preceding 12 months.
Rates and costs are stated as ranges rather than a single number because pricing is set case-by-case on borrower profile, residency, asset type, location and loan-to-value.
Timelines assume a complete document file from the outset; valuation, legal capacity and (in Spain) NIE and notary availability drive the critical path.
Costs exclude any lender, broker or third-party fees not stated on the page, and exclude currency movement between agreement and drawdown.
Figures are reviewed monthly and re-checked against lender pricing whenever a material market change occurs.
Last reviewed . Read the full Key facts methodology, or speak to our team for a quote based on your circumstances.
Facilities structured against total cost and GDV with staged drawdowns as the scheme progresses.
Mezzanine & equity
Layered mezzanine and JV equity to reduce the developer's cash requirement.
Site acquisition
Fund the land purchase and roll it into the development facility at first drawdown.
Refurbishment & conversion
Heavy refurb and permitted development conversion schemes with tailored drawdown profiles.
Development exit
Refinance completed schemes onto a lower-cost exit facility to allow orderly sales.
Wide lender access
Introductions to challenger banks, specialist lenders and private funders.
Borrower eligibility
Who we can help
Established UK developers
First-time developers with strong professional teams
SPV, LLP and corporate borrowers
Joint-venture partners and overseas sponsors using a UK SPV
Typical lending criteria
Indicative parameters
Loan-to-cost
70%–75%Senior debt, typical range; subject to scheme, experience, valuation and underwriting.
Loan-to-GDV
Up to 65%
Facility size
£500k – £50m+
Term
12–24 months
Time to first drawdown
8–12 weeks
Drawdown
Staged / monthly
Pricing
Indicative, case by caseLender-neutral guidance only; not live lender pricing or a quote.
Indicative only. Actual terms depend on borrower profile, asset and lender criteria.
How much can you borrow for a UK development?
Senior lenders size facilities on two tests: loan-to-cost (typically 70%–75%) and loan-to-GDV (up to around 65%). The lower result usually sets the loan.
Typical UK development finance leverage by scenario
Scenario
Typical loan-to-cost
What drives it
Experienced developer, senior debt
Up to 75% of cost
Track record of similar schemes, detailed planning, fixed-price build contract, liquid residential location.
First-time developer, senior debt
Around 70% of cost
Credible contractor, QS and architect; realistic appraisal; more developer equity often required.
Conversion or heavy refurbishment
70%–75% of cost
Condition surveys, PD or change-of-use consent, build programme and existing-building risks.
Senior debt plus mezzanine or JV equity
Case by case
Additional layers reduce the developer's cash input; terms depend on the scheme and are assessed individually.
Experienced developer, senior debt
Up to 75% of cost
Track record of similar schemes, detailed planning, fixed-price build contract, liquid residential location.
First-time developer, senior debt
Around 70% of cost
Credible contractor, QS and architect; realistic appraisal; more developer equity often required.
Conversion or heavy refurbishment
70%–75% of cost
Condition surveys, PD or change-of-use consent, build programme and existing-building risks.
Senior debt plus mezzanine or JV equity
Case by case
Additional layers reduce the developer's cash input; terms depend on the scheme and are assessed individually.
Typical ranges for guidance only, not an offer. Actual leverage depends on lender underwriting, valuation and your circumstances.
How do development finance drawdowns work?
Step 1
Appraisal and indicative terms
We review your appraisal, costings, planning and team and return lender-neutral indicative terms.
Step 2
Valuation and monitoring surveyor
The lender instructs a valuer for site value and GDV, and a monitoring surveyor to review costs and programme.
Step 3
Legal work and first drawdown
Legal completion releases the land element and any initial build tranche, typically 8–12 weeks after application.
Step 4
Staged build drawdowns
Each month the monitoring surveyor certifies completed work and the lender releases the matching tranche.
Step 5
Interest rolled up
Interest is added to the balance and settled at redemption, so no monthly payments are due during the build.
Step 6
Practical completion and exit
Repay from unit sales, a bulk sale, or refinance onto development exit finance or long-term investment debt.
What does development finance cost?
Development finance costs are more than the interest rate. The figures below are lender-neutral guidance, not live lender pricing or a quote. Our bridging loan costs guide explains how fees and rolled-up interest compare on short-term facilities.
Interest
Charged on drawn funds only and usually rolled up. Pricing is indicative and set case by case on the scheme, experience and leverage.
Arrangement fee
A percentage of the facility, normally added to the loan rather than paid upfront.
Exit fee
Some lenders charge a fee on repayment, as a percentage of the loan or of GDV; others do not.
Valuation and monitoring fees
Paid for the initial valuation and the monitoring surveyor's reports throughout the build.
Legal costs
Your solicitor and the lender's solicitor; the borrower normally pays both.
Broker fee
Agreed with you in writing at the outset, before any application is made.
Worked example: how a development loan is sized
An illustrative six-unit residential scheme, using the lower end of the typical loan-to-cost range. Not a quote or offer.
Gross development value (GDV)
£4,000,000
Total costs (land + build + fees)
£3,000,000
Senior loan at 70% loan-to-cost
£2,100,000
Equivalent loan-to-GDV
52.5%
Developer equity required
£900,000
Gross margin before finance costs
£1,000,000
Here the 52.5% loan-to-GDV sits below the 65% cap, so loan-to-cost sets the facility. Rolled-up interest and fees are reserved within the facility, which affects net funds available.
Case studies
Selected transactions
Real deals arranged — with the scenario, the structure and the outcome. Every transaction is different; these illustrate how we think.
Case study · Essex
£1m+ development exit finance for an Essex residential scheme
Clifton PF International arranged a development exit facility of over £1 million for an experienced developer whose Essex residential scheme was approaching practical completion, refinancing a development loan nearing expiry and giving time to sell the units without a forced sale.
Loan amount
Over £1,000,000
Purpose
Development exit finance
Property type
Residential development
Shows how a development loan nearing expiry was refinanced at the end of a scheme. Lender, rate and exact loan-to-value are not published.
Senior development lenders typically lend 70%–75% of total costs (land plus build), capped at around 65% of GDV. The developer funds the balance, either from their own equity or with mezzanine or joint-venture equity.
Yes, with a subset of specialist UK lenders. Experience is preferred, but first-time developers with a credible professional team (contractor, quantity surveyor, architect), a viable appraisal and adequate equity are considered, often at the lower end of the leverage range.
Indicative terms can follow within one to two weeks of a complete enquiry; first drawdown typically takes 8–12 weeks, depending on legal work, valuation, the monitoring surveyor's initial report and planning conditions.
The land element is usually advanced at completion of the purchase, then build costs are released in staged (typically monthly) drawdowns after the lender's monitoring surveyor certifies the work completed.
Development finance is normally drawn against a scheme with detailed planning permission. Sites without planning, or awaiting it, are usually funded with land or bridging finance first and refinanced onto a development facility once consent is granted.
Interest is added to the loan balance each month rather than paid, and settled when the facility is repaid from sales or refinance. Lenders reserve for it within the facility, so there are no monthly payments during the build.
Mezzanine is a second-ranking loan behind the senior lender that reduces the cash the developer puts in, at a higher cost. Joint-venture equity is a partner contributing cash in return for a share of the profit rather than interest. Both reduce the developer's own equity requirement.
Lenders build in a contingency (often around 5–10% of build cost) and the developer usually covers overruns beyond it. Where the programme runs past the term, an extension or a refinance onto development exit finance is negotiated; early communication with the lender matters.
Most development lenders ask the directors or shareholders of the borrowing company to give a personal guarantee, often limited to a percentage of the loan or to cost overruns and completion. The scope is negotiable case by case.
Yes. Office-to-residential, permitted development (PD) conversions, barn conversions and change-of-use schemes are fundable with lenders that understand their specific risks.
Once a scheme reaches or nears practical completion, the development loan can be refinanced onto development exit finance, which is usually cheaper and gives time to sell units without pressure.
Yes. Specialist lenders fund UK residential and mixed-use schemes for expat and foreign national developers, usually through a UK SPV, where the scheme, professional team and exit are strong. Short-term needs can also be covered by expat and non-resident bridging.
A discreet, no-obligation conversation with a UK-based adviser who understands the full UK lending landscape — residential, bridging, development and commercial.
