Development Finance
As the name implies, Development Finance is a source of funding needed to undertake or complete the re-development of property.

It sounds very simple, but broken down to component level:
- Renovation (i.e. light work no structural to revamp to make it look new again)
- Refurbishment (i.e. light work no structural to rebuild or replenish with all new materials)
- Conversion (change of use with or without structural change)
- Heavy Refurbishment (i.e. including structural works)
- New Build (i.e. ground up projects)

The complexity of a transaction often determines which of many lenders will consider supporting the deal, with the following as financing thresholds. One size most certainly does not fit all:
Transaction |
Borrower |
Single or Multiple Unit |
Starter |
Residential, Commercial or Mixed Use |
Seasoned Professional |
HMO or Student Accommodation |
Track Record |
PDR or PRS |
Credit Profile |
Pre or Post Planning |
Net Worth |
Phased Build |
Developer, Contractor or both |

The transaction size often determines which of many lenders will consider supporting the deal, with the following frequently used financing thresholds:
>£25k to <£100k |
>£1m to <£5m |
>£100k to <£250k |
>£5m to <£10m |
>£250k to <£500k |
>£10m to <£25m |
>£500k to <£1m |
>£25m+ |

Lenders have differing risk appetite based on specific criteria:
- Loan to Value (LTV)
- Loan to Cost (LtC)
- Loan to Gross Development (LtGDV)
- Return on Investment (RoI)
- Return on Costs (RoC)

Finally, depending on the location of the project it will attract a varying basket of lender:
Prime London |
UK |
Non Prime London |
Prime Towns |
Within M25 |
Built Up areas |
London & South East |
Rural |
England, England and Wales |
Proximity to Transport |

Funding comes from various sources, with no one lender monopolising the market, making it fragmented, subject to change with lenders entering and withdrawing from the market.
- High Street banks
- Specialist banks
- Finance houses
- Bridging lenders
- Private Equity / Venture Capital
- Family Office / HNW lenders
- Peer to Peer
Type + Complexity + Size + Risk + Location = Choice of Lender
We think you now have got the gist of things. Putting it all into the melting pot, you can see there are numerous potential permutations, and that is without addressing the technical aspects. In conclusion, even for seasoned developers, seeking impartial professional advice is paramount - which is where we come in. Lenders come and go and are structured differently, having a potentially serious impact.
We would like to be thought as your business partner, able to guide you through the myriad of options within the time constraints afforded.
We look forward to the opportunity of assisting you with your property finance, circumnavigating many of the issues along route.
