Development Finance Brokers UK
FD Commercial is a specialist development finance broker arranging facilities from £250,000 for residential, commercial and mixed-use schemes across the UK. We place each scheme with the lender whose gearing, pricing and drawdown process fit it, from senior debt at up to 90% of cost for experienced developers through to first-scheme funding and development exit. There is no broker fee where the lender pays us a commission on completion, which covers most of the facilities we arrange.
Development finance is a short term loan of 12 to 36 months that funds the land and build costs and is repaid from sales or refinance. The land is advanced on day one and the build released in arrears against a monitoring surveyor's certificates. FD Commercial arranges it from £250,000.
Development finance is short-term lending that funds the purchase of land or an existing property and the construction works required to complete a development scheme. Funds are released in stages as work progresses and repaid on completion, either from unit sales or a refinance onto a longer-term facility.
FD Commercial arranges development finance from £250,000 for residential, commercial and mixed-use schemes across England, Scotland and Wales. Our broker fee is up to 1% of the loan amount.
Development finance from £250,000 across England, Scotland and Wales. Full access to specialist development lenders.
Call 03300 100315How development finance works
Development finance differs from a standard mortgage or bridging loan in one fundamental way: the money is not advanced as a single sum. It is released in drawdowns at agreed construction milestones, verified by an independent monitoring surveyor (IMS) appointed by the lender.
For the lender by lender figures behind these ranges, see our UK development finance lenders compared 2026 guide, which sets out each lender's published loan to cost, loan to GDV, loan size and margin.
The initial drawdown typically covers the land purchase and mobilisation costs. Subsequent drawdowns are released against certified valuations of works completed. Interest rolls up and is added to the loan balance rather than paid monthly, so there are no cash payments during the build. The facility is repaid in full on completion, either from unit sales or by refinancing onto a buy-to-let mortgage, commercial mortgage or development exit facility.
Where the site has to be secured before planning is granted or before the development facility is ready to draw, a bridging loan for land funds the purchase at up to 65% of current value and is refinanced into the development facility at first drawdown.
For a detailed breakdown of each stage from land purchase to completion, see our development finance drawdown guide.
LTC and LTGDV explained
Development lenders use two measures to size the loan. LTC (loan to cost) is the total loan as a percentage of the total project costs: land, build, professional fees and finance charges. LTGDV (loan to gross development value) is the total loan as a percentage of the completed scheme's value. Lenders apply both and advance whichever produces the lower figure. LTGDV is usually the binding constraint.
Use our development finance calculator to estimate your borrowing based on project costs and GDV, or our developer profit calculator to model scheme viability before approaching lenders.
Development finance rates 2026
| Scheme type | Rate (per month) | Max LTC | Max LTGDV |
|---|---|---|---|
| Prime residential (experienced developer) | 0.70–1.10% | 85–90% | 65–70% |
| Standard residential / conversion | 0.75–1.20% | 80–85% | 65% |
| First-time developer | 0.85–1.30% | 70–75% | 60–65% |
| Commercial development | 0.90–1.40% | 70–80% | 60–65% |
| Development exit finance | 0.60–0.90% | 70–75% | 65–70% |
Indicative rates based on March 2026 market conditions. Actual terms depend on scheme type, location, developer experience and lender.
Types of development finance
Residential development finance
The most active part of the market. Ground-up new build, conversions of existing buildings into residential units, and permitted development conversions (office-to-residential, commercial-to-residential) all fall under residential development finance. Lenders assess the scheme on GDV, comparable sales evidence, location and developer experience.
When the build completes and units remain unsold, development exit finance replaces the development facility at a lower rate while the sales complete.
Commercial development finance
Funding for new commercial buildings, office developments, retail schemes, industrial units and purpose-built student accommodation (PBSA). Commercial development is underwritten more conservatively than residential, with lenders typically requiring pre-lets or pre-sales before committing. LTV and LTC limits are generally tighter.
Permitted development finance
Office-to-residential and commercial-to-residential conversions under permitted development rights are a popular entry point for first-time developers. Because the structural shell already exists, build risk is lower and lenders are more accommodating. Permitted development finance is often faster to arrange and attracts a wider lender pool than ground-up new build. For a full breakdown of eligible project types, prior approval requirements, lender criteria and rates, see our permitted development finance guide.
Refurbishment and conversion finance
Heavy refurbishment, including structural alterations, change of use and significant extensions, sits between bridging and development finance. Lenders use the planned GDV to size the loan, with drawdowns tied to works milestones. Light refurbishment with no structural work is typically funded through a bridging loan rather than a development facility.
Development exit finance
Development exit finance replaces a development loan at or near practical completion when the scheme is built but sales have not yet completed or a long-term refinance is not in place. It is priced more cheaply than a development facility (0.60–0.90% per month) because the build risk has been eliminated. It buys time to achieve full market value on unit sales rather than accepting bulk discounts under lender pressure. See our development exit finance guide for detail.
Ground-up residential scheme, Bristol. 8 units. GDV £2.4m.
An experienced developer with two completed schemes secured development finance at 85% LTC and 65% LTGDV on a ground-up scheme of 8 two-bedroom apartments. FD Commercial placed the case in four weeks. The IMS confirmed practical completion at month 14. Four units were pre-sold before completion; the remaining four were refinanced onto buy-to-let mortgages, repaying the development facility in full.
Development finance for first-time developers
Most specialist lenders will consider first-time developers. The key difference is that lenders look at the professional team around you: your contractor's track record, QS cost schedule and exit strategy, rather than your personal development history.
Permitted development conversions and small residential conversions of one to four units are the most accessible starting points. LTC and LTGDV will typically be lower than for experienced developers, and rates higher. A joint venture with an experienced developer can unlock better terms where the scheme is larger or more complex.
For a full guide to funding your first scheme, see our development finance for first-time developers guide.
The development finance process
Initial assessment
We review the site, planning position, developer profile and proposed scheme. We identify lenders suited to the transaction and provide indicative terms before any application is made.
Application submission
We compile the full application pack, including the QS cost schedule, planning documents, architect drawings, contractor details and financial information, and submit to the selected lender.
Valuation and monitoring surveyor
The lender instructs a RICS valuer (for GDV) and an independent monitoring surveyor (IMS) to review the QS cost schedule. The IMS report is a key underwriting document for the lender.
Credit approval and facility agreement
Once valuations are received, the lender issues a formal facility letter detailing the loan amount, drawdown schedule, interest rate and conditions. We review this with you before you proceed.
First drawdown and build
Legal completion and first drawdown. Subsequent drawdowns are requested as construction milestones are reached and certified by the IMS. Interest rolls up throughout the build.
Repayment
On practical completion, the facility is repaid from unit sales or refinanced onto a buy-to-let mortgage, commercial mortgage or development exit facility. The IMS issues final certification confirming works are complete.
Why use a development finance broker instead of going direct?
Development lenders do not publish their full criteria, and their appetite for a given scheme type, location and developer profile changes month to month. A lender that funded 85% of cost on a ten-unit scheme in the Midlands in spring may be capped at 70% by autumn because its book is full of that exact profile. Going direct means you find that out after four weeks of underwriting. We know it on the day the enquiry comes in, because we are placing schemes with the same lenders every week.
The second reason is packaging. A development facility is approved on the appraisal, the cost plan, the exit and the developer's track record, and the way those four are presented decides whether the credit committee says yes at 85% or 70%. We build the pack the way each lender wants to read it, run two or three lenders against each other on terms, and then manage the monitoring surveyor and the drawdown schedule through the build. Around a third of the schemes we look at have already been declined by a lender the developer approached directly, and most of those are placed within a fortnight once the pack is rebuilt.
How do I choose a development finance broker?
Ask how many development facilities they arranged in the last twelve months, and with which lenders. A broker who does two a year is learning on your scheme. Ask who handles drawdowns after completion, because a facility that is arranged well and then administered badly costs you interest on every delayed stage payment. Ask how they are paid: we are paid by the lender on completion in most cases and only charge a fee where the lender pays no commission, and any broker who cannot give you a straight answer on that in one sentence should be treated with caution.
Then ask for a case study on a scheme like yours. Not a testimonial, a case: the loan, the gearing, the lender type, the timeline, what went wrong and how it was fixed. We publish ours. If a broker cannot point to one, they have not done enough of them.
What is a property developer?
A property developer is anyone who buys land or buildings in order to build, convert or substantially refurbish them and then sell or let the result at a profit. That covers a first-time investor converting a house into two flats as much as a company delivering two hundred units, and the finance market treats the two very differently. Development lenders classify developers by completed schemes: none, one or two, or three and more, and gearing, pricing and the professional team they insist on all follow from that count. Our guide to development finance for first-time developers covers how to fund a first scheme.
Frequently asked questions
Do I need a development finance broker or can I go direct to a lender?
You can go direct, but most development lenders do not publish their full criteria and their appetite changes with the state of their book. A specialist development finance broker knows current appetite, packages the appraisal and cost plan the way each lender reads it, and runs lenders against each other on gearing and price. Most schemes we place have been approached direct first.
How much does a development finance broker charge?
In most cases FD Commercial charges no broker fee on development finance because the lender pays a commission on completion. Where a lender pays no commission we charge a fee, agreed in writing before the application, and never more than 1% of the facility. Always ask any broker to confirm their fee basis in one sentence before you instruct them.
What is development finance?
Short-term lending that funds land purchase and construction works. Funds are released in stages as the build progresses, monitored by an independent surveyor. Repaid from unit sales or refinance on completion.
How much can I borrow?
FD Commercial arranges development finance from £250,000. Experienced developers can typically access 85–90% LTC and 65–70% LTGDV. First-time developers should expect lower limits. Some lenders will fund 100% of build costs where sufficient land equity is contributed.
What is LTGDV?
Loan to gross development value. The total facility (including rolled-up interest) as a percentage of the completed scheme's value. Most lenders cap at 65–70% LTGDV. This is usually the binding constraint on how much you can borrow.
What is the difference between development finance and a bridging loan?
Development finance is released in staged drawdowns tied to construction milestones and monitored by an independent surveyor. A bridging loan is a single advance, suitable for purchases and light refurbishment. Development finance is the correct product for schemes with significant construction works.
Can first-time developers get development finance?
Yes. Lenders focus on the professional team around you: an experienced contractor, accredited QS, qualified architect, and the exit strategy rather than your personal track record. Smaller schemes and permitted development conversions are the most accessible starting points. See our first-time developer guide.
What are current development finance rates?
Rates start from around 0.70% per month for prime residential schemes with experienced developers and run to 1.30%+ for higher-risk transactions. First-time developers should expect rates at the upper end. Development exit finance is cheaper at 0.60–0.90% per month.
What is development exit finance?
A short-term facility that replaces a development loan at practical completion, giving time to complete unit sales at full market value. Priced more cheaply than a development loan because the build risk has been eliminated. See our development exit finance guide.
What is permitted development finance?
Permitted development finance funds conversions under permitted development rights, where full planning permission is not required. Common uses include office-to-residential conversion under Class MA and agricultural conversion under Class Q. It is typically lower-risk for lenders than ground-up new build and often the most accessible entry point for first-time developers. See our permitted development finance guide.
Does FD Commercial charge broker fees?
Yes, on development finance. Our broker fee is up to 1% of the loan amount, reflecting the complexity of placing development transactions. This is disclosed upfront before any work begins and paid on completion.
How long does development finance take to arrange?
Four to eight weeks for conversion and permitted development schemes. Six to ten weeks for ground-up new build. Having full planning permission, a QS schedule, contractor details and drawings ready from day one shortens the timeline significantly.
Recent case studies
£11.5m Development Finance for 18 Units in Beaconsfield
£14.2m Development Finance for a 24-Unit New-Build Scheme in Guildford
£2.7m Development Exit Finance for a 15-Unit Block of Flats in Kent
All rates and figures shown are indicative only and subject to lender assessment, credit profile, and market conditions. Rates may change without notice. Your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
Development finance from £250,000 across England, Scotland and Wales. Full access to specialist development lenders. Broker fee up to 1% of the loan amount.
Call 03300 100315