Property Development Loans
Our Development Finance Service Provides:
- Development finance from £100,000
- Finance for: New build, conversion, minor & major refurbishment
- Residential developments of all types
- Up to 65% GDV finance available
- Up to 100% development cost finance available
- 100% joint venture finance available for experienced developers
Call our property development finance team on 0117 313 6058
What are property development loans?
Property development loans are a type of short term finance used for various kinds of property development projects. They are also commonly referred to as development finance and bridging loans.
Property development loans are usually offered over 12-18 months, although some lenders may be willing to give longer loan terms if required. Because this type of loan is intended as a short term funding solution, it is normally required to have a plan in place to repay the loan before it is given. This may involve refinancing or selling the property once the development is complete.
Development finance is often paid in instalments as set milestones are achieved in the development process e.g. once the foundations are complete. This reduces the lender’s risk and can keep costs down for the borrower. Many lenders will be able to release the first instalments within days of a successful loan application.
Uses for property development finance
Property development finance is commonly used for:
- Small residential developments
- Commercial property developments
- Renovations and refurbishments of both residential and commercial property
- Property conversions
Development loans are generally available to many types of developers, including self-builders, private developers and commercial property developers.
Applying for property development finance
To apply for a property development loan you will normally require:
- Information on your income, expenditures, assets and liabilities
- Bank statements
- A project valuation arranged by the lender
- Detailed breakdown of costs
- Project timeline
- Planning permission documents
- Building regulations consent
- Your National House Building Council (NHBC) insurance details or equivalent
- An approved exit strategy
Individual lenders will have their own specific requirements and lending criteria, so even if you do not qualify for one lender, you may still be able to access finance with an alternative provider.
How much will a property development loan cost?
There are three main costs you are likely to encounter when taking out a development loans – the arrangement fee, the monthly repayments and an exit fee. Not all lenders charge an exit fee, so it is important to check this as it can make a significant difference to the overall cost of the loan.
Arrangement fees – This will be a percentage of the overall loan and will be charged when it is first taken out.
Monthly repayments – These will usually be charged on an interest only basis with the capital repaid in full when the loan term ends. If the capital is delivered in instalments, interest will usually only be charged on the money already received by the borrower.
Exit fees – Charged when the load is repaid, this is also normally a percentage of the total amount borrowed. It is important to factor this in when calculating exactly how much the loan will costs as loans with no exit fee can end up much cheaper even if they have a lower interest rate.
Compare property development loans
Whether you are planning a private property development for your own home, or developing property commercially, getting the best rates on your development finance is a must. By comparing deals for various different lenders, you can see which offers you the best deal while matching your borrowing needs.
If you are planning a property development and want to access the very best rates, our experienced development finance brokers can help. We have access to all the top lenders, including many not available on the high street.
To find out more, call Fair Mortgages today on 0117 313 6058 or use our contact form for a quick response.