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Guide to
Property Development Finance

There are many forms of Property Development Finance loans available to fund many types of scheme.    


Banks and specialist lenders across the UK Financial Services Market offer varying Property Development Loans for: 


Light Refurbishment  


Internal fit outs 

Heavy Refurbishment  


New Build Schemes (Spade in Ground Developments) 


High Street Clearing Banks such as Lloyds Bank, Natwest Bank, Barclays, etc  offer the lowest Interest Rates however they tend to lend a lower gearing compared to  Commercial Banks  


Clearing banks traditionally lend up to 55% to 65% of the Land or Building purchase (Day 1 funding) and up to 75% of the Development Costs.  


Conversely Commercial Banks such as United Trust Bank, Aldermore Bank and similar will fund typically up to 65% LTV for Day 1 Funding and 100% of Development Costs.  Typically UK Developers can borrow 55% of the Gross Development Value (Loan to GDV) not exceeding 90% of overall Development Costs. 



Specialist Lenders offer more elevated Geared Development Loans up to 65% Loan to GDV not exceeding 90% of cost. 


These three lenders above offer Senior Debt. 



Mezzanine Finance Lenders provide Development Finance that further increases the loan to a maximum of 75% Loan to GDV, within 90% of cost.  Rates for Mezzanine Finance (or Mezz as referred to by industry professionals) are the highest in the realm of Property Development Finance.  However these loans usually represent a smaller proportion of the overall fund.  Therefore we blend the Senior Debt with the Mezzanine Debt to reveal the true rate of interest.  


Finally Private Equity offers Property Developers the option to bridge remaining loan to potentially borrow up to 100% Loan to GDV.  Such funding platforms require an equity stake in the completed scheme.  

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