Head of Content
Mortgage Advisor & Director
What is development finance?
Development finance is a short-term loan for residential, commercial or mixed-use property development.
Not to be confused with a bridging loan, development finance is supplied in stages to support the project. As a whole-of-market broker, at Teito, we have access to deals not available to the general public. We have helped many people like you to secure highly competitive rates on their development finance, letting you focus on the task at hand.
Complete our simple online form today to get started or carry on reading to learn more.
What can development finance be used for?
Development finance can be used for both conversions and ground-up developments, funding both the initial land/property purchase and build/conversion cost. There are different types of development finance depending upon the nature of the project; our team can match your project to the right kind of funding.
Who is eligible for development finance?
Generally, development finance is granted to experienced builders and developers, with specialist lenders taking into account the future value of the property when considering the application. There are specialist lenders who would be willing to work with inexperienced developers in certain situations; however, these options are rare.
What rates can I expect with development finance?
Interest rates vary significantly across the development finance market.
Many factors play a role in the final negotiated interest rate, including experience, the loan amount, site location and gross development value (GDV). Depending on the application, rates can vary drastically between 4.5% to 16% per annum.
How much can I borrow with development finance?
Typically you can borrow anything between £100,000 to £2,500,000 with development finance, up to 90% of the cost of the project.
On day one, lender's may only be prepared to release up to 70% upfront to purchase the site and get the plan moving.
What will the application include?
The lender will assess the application on a range of information, including:
- The value of the property or purchase price
- The predicted value following the development
- The cost and timescale of the development
- Experience of the developer and other professional involvement
- Planning restrictions and building regulations
What is the term of development finance?
As a short-term finance option, you can expect the term to be in the region of 4 months to 3 years.
How can I learn more?
Our team of experienced advisors will help you to understand your options and to see if development finance is the best way forward for your project. Complete our online form today to get started, and we will be in touch.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
