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Development Finance Call 0117 313 6058

Residential Development Loan

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 is a residential development loan?

Residential development loans can be used for a variety of projects. This includes new developments of houses and flats, refurbishing existing homes and converting offices and other former commercial and public buildings to residential use.

Funding for these kinds of development projects is often taken in the form of a bridging loan. This is a type of short term finance which can be accessed relatively quickly making it perfect for auction finance or situations where previous funding has fallen through.

How bridging finance for residential developments works

Bridging loans are normally offered with loan terms of 12-18 months with the money paid in instalments as the project reaches various milestones, such as the foundations being completed. The first instalment can often be paid within days of a loan agreement being signed.

As this type of finance is intended for short term use only, it will normally be a condition of the loan that the borrower specifies exactly how the loan will be repaid. This will normally be by selling the finished development or by refinancing once the property or properties reach a mortgageable state.

Applying for a residential development loan

When making an application for a residential development loan, lenders will normally require you to supply the following:

  • Details of your income, expenditures, assets and liabilities
  • Bank statements
  • A project valuation arranged by the lender
  • A detailed project cost breakdown
  • A development timeline
  • All relevant planning permission documents
  • Building regulations consent
  • Your National House Building Council (NHBC) insurance details or an equivalent
  • An exit strategy i.e. how you will repay the loan when the loan term ends

How much do residential development loans cost?

The costs of development finance vary from lender to lender and based on factors such as how much you need to borrow, how long for and your credit rating. The interest rates you are charged are also likely to depend on what percentage of the Gross Development Value (GDV) you need to borrow. GDV is how much the finished project is estimated to be worth.

To work out how much a loan deal you are offered will ultimately cost, you need to look at the arrangement fee, monthly interest charges and the exit fee. Not all lenders charge an exit fee which can make a very significant difference to the final cost of a particular loan.

Compare residential development loans

To get the best deal on your development finance, you have to be willing to shop around. This can make the process much slower and more labour intensive, however, which is why most developers use a development loan broker to help them find the right finance for their project.

Fair Mortgages has a whole team of specialist development finance brokers ready to help you get the best possible deal on your residential development loan. We work with all the top development finance lenders, including many not available on the high street. This means we can offer the very best range of deals to help you get a fair deal on your finance.

To find out more, call Fair Mortgages today on 0117 313 6058 or use our contact form for a quick response. 

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Bridging Loans