Development finance lenders for UK property schemes
The wrong provider can cost a developer more than a higher rate. Vortex Finance compares specialist providers for business and investment developments across the UK. We are a whole-of-market property broker, not a lender. Share the core numbers once and we will assess senior, stretched senior and mezzanine routes against the site, works, applicant experience and exit.
Get development finance matched to the scheme
Your enquiry should show enough for a useful assessment: site location, current value or purchase price, development costs, gross development value, loan amount, planning position, developer track record and exit. That information lets us compare provider appetite before you pay for a valuation or legal work.
A property development finance request usually starts at £250,000 and can extend beyond £25m on larger schemes. Mainstream residential schemes are indicatively priced from 6.5% to 9.5% per annum, with a typical loan term of 18 to 30 months. These are guide ranges, not an offer. The provider confirms every figure after underwriting.
Property development funding lender types
Different types of development finance serve different positions in the funding stack.
- Senior debt: commonly up to 80% loan to cost and 70% to 75% loan to gross development value on a standard scheme.
- Stretched senior: one facility that reaches above mainstream senior gearing. Indicative pricing is 8% to 12% per annum.
- Mezzanine: a second loan behind the senior lender. It can reduce your cash equity, but indicative pricing of 12% to 20% reflects the additional risk.
- Bridge to development: a bridging loan can fund a time-sensitive purchase or pre-planning period before the site moves onto a development loan.
- Development exit facility: short-term capital for a completed or near-completed scheme while units sell or refinance.
Development finance solutions cover ground-up new homes, new property schemes, heavy refurbishment and mixed-use development. Commercial development finance and property development loans can support a range of property uses across residential and commercial assets. A commercial property scheme is not assessed in the same way as a small housing scheme, so provider type must follow the asset and exit.
Development finance lender underwriting criteria
A specialist provider underwrites the scheme, the team and the exit together. Lenders typically test the following:
- planning status, conditions and the route to a lawful build;
- land or property value at day one;
- build budget, contingency and development appraisal;
- gross development value supported by valuation evidence;
- developer and contractor evidence from property development projects and comparable property projects;
- projected profit and sensitivity to cost or sales changes;
- source of equity, borrower structure and credit history;
- exit through unit sales, refinance or an exit facility.
Lenders will often appoint an independent monitoring surveyor to review technical risk and certify staged drawdowns. In practice, a clean cost plan and a credible programme help the underwriting team understand when money is needed and what each tranche completes.
Development facility documents and appraisal
Documents turn an interesting development project into an underwritable case. They should provide property, funding and experience evidence in one file. A full application then usually needs:
- borrower and company details, identification and proof of funds;
- purchase contract or title information;
- planning consent, drawings and conditions where relevant;
- schedule of works, cost plan and cash flow;
- professional team details, including contractor, quantity surveyor and architect;
- project appraisal with GDV, build costs, contingency and profit;
- comparable project evidence from an experienced development team;
- exit evidence and a realistic repayment timetable.
Planning permission is not always needed for an early conversation. Many lenders, however, require a clear consent position before first drawdown. Where permission is absent, a short-term bridge or pre-planning facility may be the suitable option until the risk changes.
First-time and experienced property developers
Providers support property developers, including first-time developers, but the structure is usually tighter without completed schemes. Lenders examine relevant development experience and broader property industry experience, the strength of the main contractor and the amount of cash equity. Developers may need lower gearing, more contingency and a stronger professional team.
Experienced developers looking for higher gearing need a record that covers similar scheme size, asset type and delivery risk. Experience does not replace a viable appraisal. It gives the lender evidence that the property developer has controlled budgets, managed staged funding and reached completion of the loan through sale or refinance before.
For example, experience on two small residential conversions does not automatically support a large mixed-use project. We present what is relevant and identify suitable providers for that evidence, rather than overstating the track record.
Compare lenders by structure and total cost
Compare development finance lenders on more than the interest rate. The right development structure is the one the scheme can draw, carry and repay.
| Comparison factor | Point to check |
|---|---|
| Gearing | Day-one advance, LTC and LTGDV limits |
| Total funding costs | Interest, arrangement fee, exit fee, valuation, monitoring and legal costs |
| Drawdowns | Timing, monitoring process and whether interest is charged only on drawn funds |
| Equity | When your cash must enter the project |
| Covenants | Cost-overrun, sales, pre-let and reporting conditions |
| Exit | Sales assumptions, refinance criteria and extension options |
A lower rate with less debt can require more cash than you have available. Mezzanine raises the blended cost but can preserve capital for another site. We tailor the funding solution to the appraisal, then show the trade-off in pounds and timing. All interest rates and fees remain indicative until a provider issues terms.
Development finance team process from enquiry to drawdown
Using a broker gives you one prepared route to the market instead of several disconnected approaches.
- Deal assessment: you share the property, works, capital requirement, experience and exit.
- Provider comparison: our specialist team checks appetite across a whole-of-market panel.
- Indicative terms: you compare viable structures before choosing whether to apply for development finance.
- Application: we package the appraisal, documents and supporting evidence.
- Underwriting and valuation: the provider reviews the case and instructs its professional advisers.
- Completion and drawdown: legal conditions are met and the first advance completes. The plan must answer one question: can the loan be repaid through the agreed exit?
The timetable depends on the lender, valuation, monitoring surveyor, planning position, title, legal work and how quickly the required documents are supplied. Tell us the required first-drawdown date at the start; the lender confirms timing.
Residential development finance objections
“I need 100% of build costs.”
Senior debt alone rarely covers every cost. Additional security, stretched senior, mezzanine or a joint-venture partner can close an equity gap. The blended funding cost and profit share need to be tested against the appraisal.
“My credit history is not perfect.”
Adverse credit does not automatically prevent specialist funding. The provider will weigh the issue, its age, the scheme, equity and exit. Disclose it early so the case goes to a suitable provider.
“I do not have full planning yet.”
Some property purchases need a bridge before the full facility can be used. Planning status changes value, risk and provider appetite, so the funding sequence matters.
“The cheapest quote should win.”
Headline price is only one factor. A loan that misses the required gearing or releases funds too late is not the cheaper route in practice.
Development finance lenders: common questions
How much can I borrow from development finance lenders?+
Can a new developer obtain funding?+
Do I need planning permission?+
Can development finance cover 100% of costs?+
Do I need an exit strategy?+
How does specialist funding work with a broker?+
Lender comparison starts with the deal
We support developers across the UK on business and investment property. We work with developers, including UK property developers comparing development finance options in the wider real estate finance market. Submit the site, cost plan, GDV, experience and exit once to compare viable structures. All figures are indicative and the provider confirms pricing, gearing, conditions and approval.
Request my free development finance quote