A £1.1 million development exit facility secured on five completed flats in Plymouth, Devon, arranged at 70% of aggregate value over a 12-month term, replacing the senior development facility at practical completion with tranche repayments as each unit sells. The point of this deal was simple: the block was finished, the development risk was gone, and the client was heading into a slow coastal winter sales market still paying for a facility priced for construction risk he no longer carried.
| Location | Plymouth, Devon |
| Loan amount | £1,100,000 development exit facility |
| Gearing | 70% of aggregate value |
| GDV | £1,570,000 aggregate value across five completed flats |
| Term | 12 months |
| Product | Development exit finance, first charge, tranche repayments on sales |
| Exit | Individual unit sales repaying the facility in tranches |
The situation
The client had built five two-bedroom flats on a site near the Plymouth waterfront, funded by a senior development facility that had run broadly to programme, with practical completion certified in early autumn. The flats were done. The problem was the calendar, because the facility had four months left on its term, two of the five units were under offer with the other three not yet listed, and the sales market he was selling into was a coastal winter market, which in Plymouth means viewings thin out from November and do not properly recover until the spring buyers arrive.
His development lender offered an extension. The terms told their own story: a fresh extension fee, a rate step-up, and a review at three months, which is the standard shape of an extension offer at the end of a development facility, because the lender wants the loan repaid and prices the overstay accordingly. Around a third of the development exit cases we arrange start exactly here, with a finished scheme, a ticking term and an extension quote that made the client pick up the phone.
Why staying with the incumbent made no sense
Paying development pricing on a finished building is a cost no developer should carry through a slow winter. Development money is priced for construction risk, for the possibility that the scheme stalls half-built, and the moment the practical completion certificate is issued that risk has left the building while the pricing has not, so a developer who sits on the old facility through the sales period is paying for a risk the lender no longer runs. The extension terms on offer here would have added a five-figure fee and a higher monthly cost precisely when the client's income from the scheme was at its most uncertain.
What we have seen across the exit cases we place is that the developers who move promptly at practical completion keep more of their profit than the ones who drift into extensions hoping the sales come quickly, and hope is not a strategy in a winter market. My advice to any developer approaching the end of a build is to instruct the reinspection valuation the moment practical completion is certified, because the completed-value figure is what a development exit lender lends against and having it ready removes two to three weeks from the refinance timetable.
The structure
The facility completed at £1.1 million, a first charge across the five flats at 70% of their £1.57 million aggregate value, priced at just under 1% per month with an arrangement fee inside the usual 1 to 2 percent range and no exit fee, with interest rolled so the client carried no monthly payment through the sales period. The refinance repaid the development lender's balance in full, including the accrued interest, and released a margin of equity which the client put towards the deposit on his next site, which is the quiet second benefit of a development exit that gets talked about less than the rate saving.
Each flat was given an agreed release price, and as each sale completed the net proceeds repaid a tranche of the facility, with interest from that point charged only on the reduced balance. On a rolled-interest facility that reducing balance does real work, because the interest accruing in month ten is calculated on whatever debt remains rather than the day-one figure, so every early sale makes the later months cheaper. The two units already under offer completed within the first six weeks of the facility and took the balance down by over £400,000 almost immediately.
The 12-month term was deliberate against a sales programme the agent honestly expected to run seven or eight months. A winter market punishes forced sellers. Giving the client a full year meant the three remaining flats could sit priced correctly through the quiet months and sell to spring buyers at full value rather than being discounted in January to hit a shorter deadline.
How it completed
First enquiry to credit-approved terms took eight working days, quick because the client arrived with the practical completion certificate, the warranty documentation and the reinspection valuation already in hand. Legals ran over the following three weeks across the five leasehold titles, with the lender's solicitor and the client's solicitor agreeing the release pricing mechanics into the facility agreement at the same time. The facility completed four and a half weeks from first enquiry, eleven days before the development facility's term expired, and no extension fee was ever paid.
The sales ran close to the agent's programme. Two completions in the first six weeks, a third in February to a cash buyer, and the final two to spring purchasers at asking price, with the facility repaid in full in month nine.
The outcome
The £1.1 million development exit facility completed eleven days before the senior development facility expired, repaying the development lender in full with no extension fee and cutting the monthly cost of carrying the finished block at exactly the point the winter sales market slowed. Rolled interest meant no monthly outgoings, tranche repayments cut the balance sale by sale, equity was released towards the next site, and the final flats sold to spring buyers at full asking price with the facility repaid in month nine of twelve.
Frequently asked questions
What is development exit finance?
It is a bridging facility secured on a completed development, used to repay the senior development lender at or near practical completion and fund the sales period at a lower cost. Because the construction risk has gone, the money is cheaper than development finance, and the facility is structured to be repaid in tranches as individual units sell.
When should a developer move from development finance to a development exit?
At or shortly after practical completion, and ideally arranged in the weeks before it, because that is the point the scheme stops being a construction risk and the pricing should reflect it. Waiting until the development facility is nearly expired hands the negotiating strength to the incumbent lender, whose extension terms will usually include a fresh fee and a rate step-up.
How do tranche repayments work on a development exit facility?
Each unit carries an agreed release price, and as each sale completes the net proceeds repay a tranche of the loan, with interest from then on charged only on the reduced balance. On this facility two early completions took the debt down by over £400,000 in six weeks, which made every subsequent month of rolled interest cheaper.
What does development exit finance cost in 2026?
Development exit money typically prices at just under 1% per month, with arrangement fees of 1 to 2 percent and often no exit fee, against development facilities priced for construction risk plus the extension fees an overstay attracts. On a finished scheme heading into a slow sales season the saving over an extended development facility is usually substantial.
Can a development exit facility release equity as well as repay the development lender?
Yes, where the completed value supports it. This facility lent 70% of the aggregate value, which repaid the development lender in full and released a margin of equity the client used towards his next site, so the exit funded the sales period and the next acquisition at the same time.
Why does a slow winter market make a development exit more valuable?
Because the alternative is selling under time pressure. A 12-month exit facility let these flats sit correctly priced through the quiet coastal winter and sell to spring buyers at full value, where a short extension on the development facility would have forced discounting in the worst months of the year.
Rates and terms quoted are indicative and subject to change. Actual terms depend on individual circumstances, the scheme, security and lender appetite at the time of application. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
We arrange development exit finance across the UK, replacing development facilities at practical completion so the sales period runs at the right cost and on the developer's timetable.
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