Property Development Finance
Specialist debt advisory and lending for the UK's new and experienced property developer, to structure far more feasible projects and get them off the ground.
- Loans from £50K*
- £50k
- Up to 95% LTC*
- 95%
- Competitive interest rates from 0.48% pm* (subject to change)
- 0.48%
* Subject to lender criteria, individual circumstances and underwriting / valuation assessment.
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What is Property Development Finance?
Property development finance is broad but distinguishes itself as the best kind of finance for residential, commercial and mixed-use properties to facilitate large-scale extensive building, renovations or ground-up works.
First-time property developers and newbies may regard any kind of loan that entails acquisitions and renovations as property development finance. However, the best type of finance depends on:
- How quickly finance is required to secure an asset.
- The type of asset and its features, such as approved planning permission or restrictions.
- Experience in completing similar projects as you may not get premium rates otherwise.
- Security in the form of capital or assets.
- Scale, as you may be able to achieve a lower overall cost with a different kind of finance.
- How much you want to borrow.
- Loan to gross domestic value.
- Loan-to-cost.
- …and how long the project will take.
With a knee deep in the property game, you will come to realise that there is an optimal threshold for property development finance, and that there may be a better financial strategy or a combination of short and long-term mortgages best suited your scheme.
For example, a lot of developers take out bridging loans to acquire land while undergoing a promising planning permission application before taking out property development finance.
Teal Finance are here to provide debt advisory and create or improve your proposal to pitch for the best possible quote from the UK’s top property development finance lenders.
Development Finance Calculator
Please use our development finance loan calculator to work out what you could potentially borrow to bring your project to life.
Send this indicative quote directly to Teal Finance and we'll continue from there, email it to yourself or whom it may concern.
Email this quotation
Send to broker
| Indicative quotation | |
|---|---|
| Initial land value (Day 1) | £2,500,000.00 |
| Initial loan (Day 1) | £1,000,000.00 |
| Construction costs | £350,000.00 |
| Gross Development Value | £5,500,000.00 |
| Loan Duration | 12 months |
| Net LTV [1] | 40.80% |
| Interest Rate [2] | 0.55% |
| Arrangement Fee (2%) | £27,000.00 |
| Initial loan interest | £69,870.47 |
| Construction loan interest [3] | £12,768.34 |
| Exit Fee (1%) | £14,596.39 |
| Total Facility Amount | £1,474,235.19 |
Send this indicative quote directly to Teal Finance and we'll continue from there, email it to yourself or whom it may concern.
Email this quotation
Send to broker
Notes:
- Loan to Value
- Monthly interest rate (indicative)
- This calculation assumes that construction costs are drawn evenly over the duration of the loan.
Please note, this is an indicative calculator. The figures displayed are subject to the lender's approval and due diligence.
What are the Main Development Finance Costs?
The cost of fees and charges can vary significantly between lenders. Relatively speaking, if you’re experienced, possess a solid track record and have highly-valuable assets, you will get more offers from senior debt lenders with cheaper interest rates. Those with less development experience need not fear, there are lenders out there for you albeit at slightly higher interest rates to cater for the increased risk.
Broker fee
At Teal Finance, we do not usually charge repeat clients and return the brokerage fee to you when we have received commission from the lender upon completion.
Arrangement fee
2% of the total cost of the loan, demonstrated by our calculator.
Interest rate
Interest charges on development finance can either be on a utilised, (pay interest only when drawdown), compounded or from day one. Ultimately it depends on the lender. With regards to interest rates, it's based on your experience as a developer and track record. The stronger your track record in delivering development schemes, the less interest you'll pay. Typically, for more experienced developers, annual rates start from 6.5% whilst less experienced developers with subprime credit could be paying as high as 15% per annum. It's down to your personal circumstances.
Completion fee
The completion fee is 1% of the total cost of the loan, demonstrated by our calculator. *Some lenders charge a percentage of the loan to gross development value (LTGDV).
How is property development finance typically repaid?
Usually, interest is added on a monthly basis so we recommend repaying the development loan as soon as possible to reduce the overall costs of the project:
Build to sell
Finish repaying the total facility by selling the whole property or enough of the properties.
Build to rent
Finish paying off the development finance when it is ready for letting by taking out a long-term mortgage, enabling developers to retain ownership and repay the mortgage whilst profiting from monthly rental yields.
Combination of sales and lettings
Use equity from sold properties to better negotiate a more cost-effective mortgage, with lower interest rates whilst retaining ownership of the remaining properties to let and generate monthly rental yields.
Development exit finance
Also referred to as 'Finishing exit finance' or more specifically ‘Sales period finance’, development exit finance can provide a better rate for projects close to or at completion whilst enabling more time to reach sales targets or to withdraw some capital for new projects.
Specialist Development Finance
Why choose us?
-
Access to more lenders
- Access to a wide range of specialist lenders and the experience to get you a highly competitive rate.
-
Property professionals
- We specialise in bridging loan and development finance cases so you can rely on an innovatively structured deal.
-
Fast, expert service
- We liaise with all involved on your behalf to ensure deadlines are met and drawdown is made in a timely manner.
We work closely with specialist lenders, private funders, high street lenders and challenger banks and we know how to put together the best bespoke deal.