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.

How it works

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What people are saying

Always helpful and quick to respond

March 21st, 2026

Explained everything well.

J

Highly recommend Propp - Very professional, efficient, and exceptional

March 20th, 2026

This is now the third time we have worked with Propp, and once again, the experience has been exceptional. As professional property investors with several years of experience, we have worked with numerous brokers, and Propp consistently stands out as the very best. Their level of expertise, professionalism, and commitment is truly second to none. We would like to take this opportunity to sincerely thank Abbie, Kyle, and Paul for their incredible support, dedication, and persistence throughout the entire process. This was by no means a simple case, yet they handled every stage with precision, efficiency, and a strong sense of responsibility. Their hard work behind the scenes has not gone unnoticed, and we are genuinely grateful. Propp is highly capable of managing all types of cases — whether for first-time buyers, remortgages, portfolio landlords, or professional investors. They approach both straightforward and complex transactions with confidence, clarity, and outstanding attention to detail. What truly sets them apart is their unwavering commitment to their clients and their ability to deliver results, regardless of the challenges involved. We will absolutely continue working with Propp for the long term and would not hesitate to recommend them to anyone seeking a reliable, knowledgeable, and top-tier brokers and professionals 👍

Jessica

Great company to deal with

March 20th, 2026

This is the second time our company has used Propp and they were just as impressive as last time. Both Joao and Sophie were friendly and helpful to deal with and on hand any time if I had any questions or queries. Wouldn't hesitate to use them again when needed.

Simon

Words are not enough

March 18th, 2026

Propp is the best and very professional. They do an amazing job!

Ruhn

Amazing service from start to finish

March 18th, 2026

I had such a positive experience working with Abbie, Keira and Jordan. They managed to get my bridging loan application approved and funds released in just 4 days, which honestly made all the difference as I was completing on an auction property. They were incredibly responsive throughout — always quick to reply, keeping me updated, and making what has been a hectic process feel much more calm and manageable. What I appreciated most was how genuinely helpful they were, taking the time to guide me through each step and making sure I felt confident along the way. I’m really grateful for their support and wouldn’t hesitate to recommend them to anyone needing fast and reliable bridging finance!

Roxanne

A very efficient service.

March 17th, 2026

Contacts were helpful and guided me through the process answering my questions in a timely fashion. Nothing was too much trouble .

David

Quick!

March 16th, 2026

The whole process quick and straight forward

Gurdev

Excellent

March 16th, 2026

On the case, responsive, pragmatic, proactive.

Jon

You are an amazing group!

March 11th, 2026

You are an amazing group!

Pedram

From start to finish Propp were great

March 10th, 2026

Every member of staff I dealt with was efficient, friendly, knowledgeable and kept the whole mortgage process moving along and kept me in the loop at every stage - very impressed!

Sali

Very helpful and supportive team!

March 10th, 2026

Very helpful and supportive team!

A

Great service

March 10th, 2026

I am so thankful to Abbie and Keira for all their incredible help arranging my bridging loan. They were professional and absolutely amazing from start to finish.

Udo

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Modern office building

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.