Property Development Finance UK
Property development finance done wrong is a nightmare. I know how to do it right.
I’m Mark Smillie. In 30 years of arranging business finance, property development is the one area where I hear more horror stories than any other. Not because the finance doesn’t exist. It does, and there’s plenty of it. But because developers go to the wrong lender, or package the application wrong, or get attracted by a headline rate that turns out to have three pages of conditions attached to it.
I’ve heard every version of what goes wrong. The lender who gave constant reassurances right up until the day of exchange and then pulled out. The development deal where the headline interest rate looked competitive until the hidden extras started landing. The finance company whose quantity surveyor caused so many delays and additional costs that the developer ended up losing money on a project that should have been profitable.
Every one of those situations started the same way. Someone applied direct, or went with the cheapest-looking option they found online, without anyone in their corner who knew which lenders were genuinely right for their deal.
That’s what I do. I know the lenders. I know what they want. I know how to package your application so it lands properly and you get a yes at a good rate, first time.
Why property development finance is different from any other business loan
Every property development finance application is unique. The lender’s decision depends on the size of the deal, your development experience, your credit history, the type of development, the planning status, your build costs, your projected gross development value and your exit route. Get any one of those wrong in the application and you either get turned down or you end up paying significantly more than you should.
There are also lenders who are actively seeking exposure in certain sectors right now and others who aren’t, and that changes. A lender who was all over residential conversions six months ago might have pulled back today. A lender who wouldn’t touch a first-time developer last year might have opened up a specific product for them now. Knowing which lenders are in the market for your type of deal, at the moment you need them, is half the battle.
The other half is the application itself. An underwriter needs to see that you have a cautious, realistic approach to the development. They need clear build costs, a credible timeline, a solid exit plan and confidence that you haven’t underestimated what it’s going to cost to get from where you are to where you need to be. Package it wrong and even the right lender says no.
This is where an experienced property development finance broker earns their place in the deal. I know what each lender’s underwriter needs to see, and I structure every application around that.
Property development finance I can arrange
Development finance
Staged funding released in tranches as your build progresses. Covers land purchase, construction costs, professional fees and contingency. The amount available is based on your projected gross development value and your loan to cost ratio. I work with lenders across the full range, from smaller regional developments to multi-million pound schemes, and I know which ones to approach for your specific project.
Bridging loans for developers
Fast, short term funding to move quickly on a land or property purchase, to bridge between exchange and a development finance facility being put in place, or to exit a completed development while you wait for sales to complete. Bridging finance moves faster than development finance and I have lenders who can turn decisions around quickly when the deal requires it.
Secured development loans
Where the development or an existing asset provides the security for the borrowing. Often gives access to better rates than unsecured alternatives, and certain facilities don’t require a personal guarantee where there’s sufficient asset security in place.
Refurbishment finance
For conversions, heavy refurbishments and change of use projects that sit between a straightforward bridging loan and full development finance. I know which lenders draw the line at light versus heavy refurbishment and which ones will look at more complex conversion projects without penalising you for the complexity.
Development exit finance
If you’ve completed a development but sales are taking longer than expected and your development finance facility is coming to the end of its term, development exit finance buys you the time to sell properly rather than being forced to discount. It’s a product a lot of developers don’t know exists until they need it.
How to get accepted for property development finance first time
There are two things you have to get right. The right lender, and the right application. Get either one wrong and you either face a rejection that damages your next application, or you end up in a deal with the wrong provider and spend the next 18 months regretting it.
To find the right lender I need to understand your deal properly. The development type, your experience, your credit history, your proposed exit, your GDV and your build costs. From that I can identify which lenders are currently active in your space and genuinely right for your situation, not just the ones with the best marketing.
Then I package the application correctly. Your proposal needs to show the full picture: land or purchase costs, full build costs including contingency, professional fees, marketing and sales costs, a realistic timeline with milestones, and a credible exit strategy. The underwriter needs to feel that you’re being conservative and realistic, not optimistic and vague. I know what that looks like because I’ve been doing it for 30 years.
One properly packaged application to the right lender is worth ten rushed applications to lenders who aren’t right for your deal. A rejection leaves a mark. I don’t put clients in front of lenders I’m not confident will say yes.
From first conversation to funds: timelines vary depending on the complexity of the development, but I’ll give you a realistic picture from the outset. And it costs you nothing. I’m paid by the lender when a deal completes.
The internet rate offers that look too good to be true
You’ve seen them. Rates from 1%. Same day decisions. 100% finance available. No personal guarantee on any amount.
Some of those claims have a grain of truth in very specific circumstances. Most of them are designed to get you on the phone so the real terms can be revealed once you’re engaged. The headline rate is never the full cost of a development finance facility. The arrangement fees, exit fees, monitoring surveyor costs, drawdown fees and legal costs are where the real comparison happens, and they vary enormously between lenders.
I give you the full cost picture upfront, not the rate designed to attract your enquiry. If a facility isn’t right for your deal I’ll tell you, even if I could technically arrange it.
First time developer?
Don’t let anyone tell you the door is closed.
First time developers can and do get property development finance. What lenders want to see is that you understand what you’re taking on, that your cost and timeline projections are realistic, and that your exit is credible. Experience helps, but the right presentation of a well-structured deal from a first-timer beats a poorly packaged application from a seasoned developer every time.
If this is your first development, tell me that upfront. I’ll match you to lenders who specifically consider first-time developers rather than wasting your time with ones who won’t.
Bad credit or a previous development that didn’t go to plan?
It’s not automatically a no.
Property development lenders focus heavily on the deal in front of them, the GDV, the build costs, the exit and the security. A difficult credit history matters less when the underlying deal is solid and the security position is strong. I regularly arrange development finance for clients with CCJs, a previous development that didn’t complete as planned, or finance applications that have been turned down elsewhere.
Tell me the full picture. I’d rather know everything upfront than find out halfway through the application.
Frequently asked questions
How much can I borrow for a development?
It depends on the gross development value of your project and your loan to cost ratio. Most development finance lenders will advance between 60% and 75% of GDV, and up to 90% of build costs in some cases. I’ll give you a realistic picture based on your specific project rather than a best-case headline figure.
Do I need planning permission before applying?
Not always. Some lenders will look at deals at planning stage, particularly where outline planning is in place. Others require full planning. I’ll tell you which lenders are appropriate for your planning position rather than sending you to ones who won’t consider your deal.
How are the funds released?
Development finance is typically released in tranches as the build progresses, based on monitoring surveyor reports confirming the work done at each stage. I’ll explain the drawdown process in detail so there are no surprises about timing.
Do I need a personal guarantee?
It depends on the facility and the lender. Some development finance arrangements don’t require a personal guarantee where the security position is strong. Others do. I’ll always look for the option that minimises your personal exposure.
What does a development finance broker actually cost me?
Nothing. I’m paid by the lender when a deal completes. The rate you get through me is typically the same as or better than going direct because lenders pay brokers to bring them pre-packaged applications they want to lend on.
What if I’ve been let down by a lender before?
Tell me what happened. A previous bad experience with a development finance lender is more common than people admit and it doesn’t close the door. The key is finding the right lender for your next deal and packaging it correctly from the start. That’s what I’m here for.
Ready to talk about your development?
One call. Tell me the project, the numbers and where you are with it. I’ll tell you what’s available, which lenders make sense for your deal, and what the full cost picture looks like.
No credit checks at this stage. No commitments. No cost.
Or call me directly: 07710 466166