Property Development Finance

Introduction

Development finance is used to fund property projects from start to finish.  It’s more than just borrowing – it’s about backing a plan.

From ground-up builds to major conversions, funding is released in stages as the project progresses.

Get the structure right early, and everything else moves faster.

Compare development finance below.

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Excellent service!

May 26th, 2026

Excellent service, friendly staff, highly recommended. Extremely efficient and nothing too much trouble

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Outstanding support, and extremely professional...

May 25th, 2026

I just wanted to take the time to personally thank Abbie and Rachael for the outstanding work and support they gave throughout this process. After approaching two lenders who both stated the property needed to be habitable before funds could be released, I honestly felt ready to throw in the towel and pull out of the sale altogether. However, your attitude, persistence, and encouragement to keep going completely changed the situation. The willingness to continue exploring further recommendations and solutions when all hope seemed lost ultimately got the sale through and the house accepted for the mortgage. They truly went above and beyond, and this would never have happened without the hard work, dedication, and effort that was put in. I genuinely cannot thank them enough for everything they did. Their professionalism and determination made all the difference, and I will always be grateful for the support throughout this process.

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May 15th, 2026

Amazing customer service and engagement throughout, while adding a friendly and solution-oriented perspective. I would definitely recommend!

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May 6th, 2026

I was purchasing property by first time, yet the whole team was very supportive and professional explaining what is the next step and what I need to prepare from my side, and what can be the outcome. I was scare of the process but they were really supportive and helpful. Finally I have my home!

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May 2nd, 2026

Brad and Amy, in fact everyone I spoke to couldn’t be nicer, more efficient and helpful. Always available, helped through every step of the process, I couldn’t recommend Propp highly enough. I have bought a few houses in the last few years and they made the process very simple.

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April 28th, 2026

Abi started the process did me proud the team were on the ball and helped me achieve my goal, many thanks.

Bry

Definately recommend...

April 24th, 2026

Processed a record time, yes there was a fee however you clearly get what you pay for. Jake & Erin were ultra responsive and always got in touch when they said they would. Complete pleasure to deal with, Propp should be proud of them both.

Daisy

Zahid went over and above in every way...

April 23rd, 2026

He was amazing in a situation where things weren’t easy to secure my finance. Would highly recommend recommend Zahid to anyone.

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April 22nd, 2026

Very professional. Prompt and a specific response to my every query. I did a few mortgages and every time we met the timeline required from the vendor or bridging lender. Highly recommended.

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April 21st, 2026

who persevered to deliver fully for us. Excellent communication throughout. Highly recommended.

Matt

Propp were very helpful from the start...

April 20th, 2026

Communication and attention to detail was great throughout the process. Would definitely recommend to others.

Stuart

Helpful, professional and well organised

April 20th, 2026

They listened to me helped me get things organised and did most of the work for me let me know what was needed guided me throughout and kept me informed they made it feel easy,the staff were so friendly and well informed I can't thank the team enough they all worked so well together and helped me every step of the way I would 100% recommend them to anyone

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What is development finance?

Property development finance is designed to provide developers with the capital needed to construct a new building or convert an existing building. It is the most suitable type of property finance to fund a residential development, commercial premises, or industrial building.

Who can get development finance?

We are able to source a development loan regardless of whether you are an experienced developer or first-time builder, however the level of experience you have usually dictates the rate available to you.

How much can I borrow with a development loan?

The maximum you are able to borrow against the development is 70% of the of the purchase price depending on whether the project is a ground-up development or light refurbishment so you will need some capital in advance.

In addition to the development loan you require to fund the purchase, you can borrow up to 100% of the build cost. You will need to make sure the total loan does not exceed 70% of Gross Development Value (GDV).

Maximum development loan varies from lender to lender, so the benefit of using an intermediary like Propp is having access to a wide range of products. Our lenders offer loans from £250,000 to £50 million.

Man looking across office, intently focused.

What is a usual development finance loan term?

The maximum period you can hold development finance is usually 36 months. Your exit strategy will usually be sale of the development or refinance.

How does a development loan work?

Unlike getting a standard mortgage to build a house, development finance lenders release a percentage of the funds at the beginning of the build to get the project underway. The remainder of the money is released in draw-downs as the project continues.

Interest is only charged on the funds that get released, so dependent on how the project progresses the overall costs of the facility could be much lower.

Another way in which property development finance is a good option is if you’re looking to borrow to fund a project that would be rejected by mainstream lenders, such as derelict or rundown properties.

How much does development finance cost?

The cost of development finance varies from lender to lender and your experience as a developer will impact the rate you have access to. Fees, charges and general costs are usually made up of;

  • Cost of Interest – Charged on either a monthly or annual basis.

  • Arrangement fee – Usually between 1% and 2% of the gross facility

  • Exit fee – The fee payable to close the facility. Usually 1%-2% of the total cost of the loan

  • Broker fee – There is usually a fee payable to the broker for searching for and arranging the development loan

Is development finance easy to get?

Providing you have development experience the main considerations from the lenders point of view are the assets you are able to offer as security and the feasibility of the project in terms of profitability. You’ll need planning permission and a statement of works before you start looking for a development loan.

Scaffolding on the outside of a building under development

What can you use development finance for?

Development finance can be used to fund the ground-up development, conversion or refurbishment of a residential development, commercial premises or industrial building.

Can you get development finance for first time developers?

As an investor you may have stumbled across an attractive development opportunity but as someone with zero experience managing a similar project you may wonder how to get the ball rolling, or if it was even feasible.

The good news is, its not impossible. There are lenders open to lending to inexperienced developers on the basis that you have a strong team of experienced contractors, architects, quantity surveyors and project managers that have a proven track record of managing similar projects.

The second element lenders will assess is the viability of the project. Will it be profitable? Does it have planning permission? Are your timelines and budgets realistic?

This may sound daunting, but our development finance experts will support you to assess your proposal and stress test it before presenting it to lenders.

What details do lenders need to assess the viability of a project?

  • Purchase details of the land or building

  • Breakdown of the construction costs

  • Breakdown of additional costs including marketing, finance, insurances, surveys and professional fees etc

  • Details of planning permission

  • Exit strategy. How will the development finance be repaid? Sale of property or refinance?

Unable to get development finance for first time developers? Consider a joint venture.

If your proposal has been rejected or you were unable to find the capital you needed to support the loan, one option is a joint venture with a more experienced developer: you pool your resources to access their know-how and secure the funding you need. This means you can benefit from their experience to get your first project under your belt as well as being able to pool your resources to put up the amount needed.

Think about who you are developing for

Are you looking to build £1m properties at the top end of the market or are you targeting the more accessible mid-range? Lenders prefer mid-range values that are relevant and accessible to your local market as they are more likely to sell quickly.