Land Bridging Loans: Finance for Sites With or Without Planning
A land bridging loan is short-term finance secured against land rather than a completed building. It funds site purchases, auction land, planning plays and site assembly while you secure consent, arrange development finance or sell. Lending is driven by one question above all others: does the land have planning permission? With consent, lenders will typically advance up to 65% of value. Without it, expect 40% to 50%, fewer lenders and sharper questions about your exit.
Buying land and need the finance to move quickly?
Call 03300 100315How does a bridging loan on land work?
Mechanically it works like any bridge: interest is retained or rolled up, the term runs 3 to 24 months, and the loan is repaid in one exit event. The difference is the security. Land produces no rent, can be hard to resell quickly, and its value can move sharply with a planning decision in either direction. Lenders price and structure for that: lower loan to value, closer interest in your planning strategy, and a written exit they can believe before they lend.
The lender pool is also smaller. Most bridging lenders who will happily fund a house will not touch bare land; the ones that will are criteria-led on location, access and services. That is where the broking matters: we know which lenders take land at all, and on what terms, before an application goes anywhere near credit.
What loan to value can you get on land?
Planning status sets the ceiling. As a working guide:
| Land type | Typical max LTV | Typical rate | Lender appetite |
|---|---|---|---|
| Full planning consent | 60% to 65% | 0.85% to 1.1% per month | Good: most land lenders |
| Outline planning consent | 55% to 60% | 0.95% to 1.15% per month | Moderate |
| No planning, development potential | 40% to 50% | 1% to 1.35% per month | Specialist only |
| Agricultural land | 40% to 50% | 1% to 1.35% per month | Specialist, case by case |
Rates and lender criteria are subject to change. Figures correct at time of publication. Always speak to your broker for up to date rates and lending criteria on your specific case.
Values are taken from a current market valuation of the land as it stands, not the hoped-for value with consent. If you are buying below market value, most lenders still lend against price rather than value; a small number will consider value with strong justification.
Land without planning permission: what do lenders look for?
Bridging on unconsented land is the hardest corner of the market, and lenders that operate in it underwrite four things closely. Access: a site without legal access, or with a ransom strip, is unfundable for most. Services: proximity of utilities affects both value and buyer pool. Planning prospects: a pre-application response, local plan allocation or permitted development angle materially improves terms. Exit: if the plan is planning gain then sale, lenders want evidence you have the team and track record to get consent inside the term.
The mistake we see most often is borrowers valuing the site at what it will be worth with consent and expecting to borrow against that number. No lender will do it. Buy the land on today's value, fund the uplift work with headroom in the term, and the numbers hold together.
What does a land bridging loan cost?
Expect rates from 0.85% per month with planning and 1% to 1.35% without, a 2% lender arrangement fee, valuation and legal costs, and interest usually retained from the advance. We charge no broker fee on bridging; we are paid a commission by the lender, which we disclose. Our bridging loan rates guide is reviewed monthly, and the bridging calculator will model total cost of funds on your figures.
What are land bridging loans used for?
Auction land, where completion is due in 28 days and mortgage finance is impossible. Planning plays, buying land, securing consent and selling or developing at the higher value. Site assembly, holding one parcel while adjacent plots are negotiated. Development starts, funding the site purchase while a full development finance facility is arranged, then refinancing the bridge into the facility at drawdown. Barn conversions and Class Q sites, where our barn conversion guide covers the planning specifics, and agricultural land bought for diversification.
What exit will a lender accept?
Three exits dominate. Refinance into development finance once planning and appraisals are in place, which is the cleanest and the one lenders like most. Sale of the site, usually after a planning uplift. Refinance onto a term facility, realistic only where the land produces income, for example agricultural tenancies. Whichever applies, the exit needs to be evidenced, not asserted: a development facility agreed in principle, comparable site sales, or an agent's opinion of saleability. When the exit slips past the term, extensions exist but are expensive; we build the term with headroom from day one.
Recent related work: our land purchase and build facility for eight houses in Frome shows the bridge-into-development route end to end.
Land bridging loans: frequently asked questions
Can I get a bridging loan on land without planning permission?
Yes, from a small group of specialist lenders at 40% to 50% loan to value. Legal access, services and a credible planning or sale exit are the deciding factors, and pricing is higher than consented land.
How much can I borrow against land?
Up to 65% of current market value with full planning, around 55% to 60% with outline consent, and 40% to 50% without planning. Loans run from £250,000 with no practical upper limit for the right site.
What do land bridging loans cost?
Rates start around 0.85% per month for consented land and 1% to 1.35% for unconsented sites, plus a typical 2% arrangement fee, valuation and legals. Interest is normally retained so there are no monthly payments.
Can I buy auction land with a bridging loan?
Yes. Land bridges complete inside the 28 day auction window where the legal pack is clean. Get the pack reviewed and terms agreed before you bid, not after.
Is agricultural land treated differently?
Yes. Agricultural restrictions limit the buyer pool and therefore value, so LTVs sit at the lower end and fewer lenders participate. Existing farm income or diversification consent helps the case.
Do lenders lend against the value with planning?
No. Lending is against current value, or purchase price if lower, as the land stands today. The planning uplift is your profit and the lender's exit comfort, not the security value.
How quickly can a land bridge complete?
Two to four weeks is typical. Title complexity, access rights and searches on unregistered land are the usual causes of delay, so instruct solicitors who know land work.
What happens if planning is refused during the term?
The loan still needs repaying at term, so the fallback is resale or refinance at unconsented value. This is why we structure land bridges with conservative loan to value and time for an appeal or a resubmission where the strategy depends on consent.
Related
Tell us about the site: location, planning status and what you want to do with it. We will tell you the same day whether it funds, at what loan to value and at what cost.
Call 03300 100315