Master the Process
How Development Finance Works
Your Blueprint for Successful Development Financing
- Up to 70% GDV
- Competitive Rates
- Up 90% LTC
- Whole of market access
“Harness the Power of Development Finance. Discover how development finance simplifies your journey, ensuring success at every step.
Assess Feasibility
Use our development finance calculator to evaluate the viability of your project.
Find Competitive Rates
Compare lenders to secure the most competitive rates and terms tailored to your project needs
Apply for Finance
Submit your application with ease, for a seamless approval process.
Start Development
Secure your funds, complete the legal process, and kickstart your development with confidence.
Breaking Down Development Finance: From Start to Success
How Does Development Finance Work?
Development finance is a tailored solution designed to support property developers through the different phases of a project—from securing land to completing construction. In this guide, we break down the process, highlighting the key steps, funding structures, and considerations to help you navigate development finance confidently.
Feasibility Assessment
Use tools like our calculator to evaluate project viability and profitability.Application Submission
Provide project plans, permissions, and past experience to secure lender approval.Funding Approval
Lenders review your application and issue terms based on your project’s potential.Legal & Valuation
Complete legal documentation and property valuation to finalize the loan.Staged Drawdowns
Funds are released in stages as the project progresses and milestones are met.Project Completion & Exit
Repay the loan through sales, refinancing
Development Finance Appraisal Calculator
Your Development Finance Journey
Securing development finance can feel complex, but with the right guidance, it’s a straightforward process tailored to your project. Here’s how we’ll work together to turn your vision into reality:
Share Your Development Goals:
- It all begins with your project. Whether it’s a ground-up development or a refurbishment, you provide us with your development finance requirements, including project details, timelines, and funding needs.
Evaluate Your Project Feasibility:
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To ensure your project stands out, we’ll review a comprehensive development appraisal. This includes:
- A detailed cost breakdown (land, construction, professional fees, contingency).
- Gross Development Value (GDV) projections and expected profitability. This step ensures lenders see the strength and viability of your project.
Highlight Key Project Strengths:
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Lenders assess several critical factors before issuing finance. Together, we’ll ensure:
- Your experience and the expertise of your team is clearly presented.
- A strong exit strategy, whether through sale or refinancing, is established.
- The location and its potential are showcased effectively.
- Your financial readiness to handle unforeseen challenges is demonstrated.
Indicative Terms and Site Visit:
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Once your project details are presented, lenders issue indicative terms or a decision in principle (DIP), outlining the key loan terms.
- If terms are accepted, we arrange a meeting to discuss your project further.
- A site visit may be conducted to assess the property and surroundings, finalizing the lender’s understanding and alignment with their criteria.
Submit Your Full Application:
- We submit your full application along with the list of documents requested by the lender. We work closely with you and the lender, coordinating the submission process to ensure all information is presented in the format required for a complete assessment of your proposal.
Credit Approval and Legal Formalities:
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Upon receiving your full application:
- Lenders conduct a credit-backed review and issue final approval terms.
- Solicitors handle the legal processes while lenders instruct valuations and initial monitoring reports to validate your project’s financial standing.
Funds Released, Development Begins:
- Once all legal and valuation processes are completed, your funds are released, and you’re ready to begin your development journey with confidence.
By using a broker, you gain access to a broader range of mortgage products, benefit from expert guidance throughout the application process, and increase your chances of securing the best deal. Brokers help simplify the complexities of home-buying mortgages, ensuring your application is handled efficiently and smoothly.
Lets talk about Development Finance
Why Choose Mortgage.One for Your Development Finance Needs?
- Transparent Fee Structure: We don’t charge you additional brokerage fees. Our income comes from lender procurement fees, ensuring transparency and saving you money on your short-term funding needs.
- Proven Track Record: With years of experience, we've helped developers secure tailored financing solutions for projects of all sizes. From small residential builds to multi-million-pound developments, our success stories speak for themselves.
- Access to a Wide Lender Network: We work with a broad range of lenders, including banks, private funds, and specialist lenders. This ensures you get the best possible rates and terms, customized to your development project.
- Quick and Efficient Process: Time is money. Our streamlined approach ensures you get fast approvals, enabling you to focus on your development project while we handle the financing.
- Customized Solutions for Every Project: No two projects are the same. We take the time to understand your requirements and craft bespoke financing options to maximize your returns.
- Dedicated Support and Guidance: Our expert advisors are with you every step of the way, providing insights, market knowledge, and hands-on assistance to help your project succeed.
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Understand How the Development Finance Works
Applying for development finance typically involves:
- Preparing a detailed development appraisal with project costs and timelines.
- Submitting your proposal, including relevant documents, to a lender or broker.
- Receiving indicative terms or a decision in principle.
- Submitting a full application along with required documents.
- Final approval, legal checks, valuation, and fund release.
To secure development finance, you’ll need:
- A detailed development appraisal (covering costs, timelines, and projected GDV).
- Personal and/or business financial records, including bank statements.
- Proof of planning permission and any associated documents.
- Information on your development team (architects, contractors, etc.).
- Evidence of your experience with similar projects (if applicable).
Lenders assess applications based on:
- Your experience: Proven track record with similar developments.
- Location and demand: The desirability of the project’s location and its market potential.
- Development appraisal: A detailed breakdown of costs, timelines, and profit margins.
- Exit strategy: A clear plan to repay the loan, either through property sale or refinancing.
- Financial strength: Your ability to cover contingencies if costs exceed initial estimates.
- Team of professionals: The expertise and credentials of your project team, including architects, project managers, and engineers.
A development appraisal typically includes:
- Land purchase price and acquisition costs.
- Construction and development costs, including materials and labor.
- Professional fees (architects, project managers, etc.).
- Contingencies to account for unexpected expenses.
- Gross Development Value (GDV) estimates for the completed project.
Indicative terms or decisions in principle are initial offers from lenders outlining:
- Loan amount, interest rate, and repayment terms.
- Required documents and conditions for final approval.
These terms are not binding but provide a framework to proceed with the application.
The time to secure development finance varies based on the project’s complexity but typically takes 4 to 8 weeks. This timeline includes:
- Preparing and submitting the application.
- Receiving indicative terms.
- Undergoing legal checks and valuations.
- Completing the loan process and releasing funds.
Lenders prioritize the following:
- Developer’s experience and track record.
- A clear exit strategy (sale or refinance).
- The project’s location and market demand.
- The financial strength of the borrower.
- Quality and credentials of the professional team involved in the project.
After approval, the following steps take place:
- Legal checks and due diligence are carried out.
- The lender instructs a valuation and initial monitoring survey.
- Funds are released in stages based on build progress.
- Regular checks ensure the project stays on track.
While prior experience is advantageous, you may still secure finance if:
- You work with a qualified team (project managers, architects, etc.).
- You have a strong business plan and a clear exit strategy.
- You demonstrate financial strength and credibility.
Costs associated with development finance include:
- Arrangement fees: 1-2% of the loan amount.
- Exit fees: 1-2% of the loan or GDV.
- Valuation and monitoring fees: Charged by surveyors and architects.
- Interest rates: Typically 7-10% annually, often rolled up into the loan.
- Legal fees: Covering both borrower and lender costs.
Understanding these fees ensures you accurately estimate project profitability.
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