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Development Calculator

  • Loan details
  • help If the land was purchased within the last 2 years for less than the current land value, we will lend up to 65% of this figure
  • Initial Loan (day 1) must be less than 65% of Initial Land Value (day 1)
  • help Minimum 6 months
  • The LTGDV is higher than 70%. Please review the Initial Loan (day 1), construction costs and gross development value fields.
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Guide To Development Finance

Development finance tends to be a short-term loan, assisting a property developer or investor in either the purchase or the development of a property. Development finance is available for both residential and commercial investments.

The scope of development finance is broad, split into two main sections:

New build property developments
Existing property refurbishments

Development finance for new build properties

When using development finance to help fund a new build scheme, the funding may cover the cost of the land as well as the cost of the build if required.

Some lenders will extend financing to cover 100% of these total costs.

New build development finance is available in a variety of forms, so give Revolution Brokers a call on 0330 304 3040, and we will help you assess the best mortgage options for your new build project.


Development finance for property refurbishments

Refurbishments can be major or minor. For example, converting a commercial property into residential or dividing a property into multiple apartments. There are lots of lenders in this market, some who specialise in refurbishment finance and others who provide new-build development lending as well.

This type of finance may be available to cover the cost of the property as well as the refurbishment works. It is always worth considering whether the investment will then be sold, or retained as an investment property over the longer-term.

For professional advice about how to leverage your investments for the maximum return, and which finance products will assist, get in touch with our team today!


Development finance timescales

Your development lending needs to be structured around your requirements, and usually has staged funding releases in line with your development plans.

Usually, this involves an initial lending payout at the start of the project and then staggered payments at specific intervals. This system ensures that you only pay interest on the lending released, and not on the entire facility if you have not yet drawn down the funding.

Should you need support with establishing a schedule of works, and how to align your development finance with your project to minimise the interest cost, give us a call and our development finance team will be delighted to assist!


Lender requirements for development finance - Use our Development Calculator

When applying for development finance, lenders will ask to see various documents to help them understand the project in hand. These include:

Planning permission
Costings and budget for the works
Designs and architects plans
Confirmation of the anticipated sale value / rental yield of the property 
Your experience as a property developer

Should you need assistance with any of the requirements, or be a new property developer and need specialist finance to get your first project underway, give us a ring!


At what stages of property development is the financing released?

The timings of your funding releases depend on your plans, but typically are:

1. Land purchase - lending to purchase the land, or credit to the total value of the property if already purchased.
2. First works - borrowing to cover the costs of the foundations and initial groundwork
3. External structure - this is called the 'wall plate' and is when the simple outer structure is erected.
4. Weatherproofing - the stage when the property becomes water tight and windproof, including the installation of windows and roofing.
5. First fix - this is stage one of the internal decorations including things like installing electrical points and plastering the interior walls.
6. Second fix - this is the second stage of the inner works, when the painting and decorating are completed.

What factors impact the availability of development finance?

Every development is individual, and so lenders will assess every project on its own merit.

The factors they will look at are:

The cost or valuation of the site or property
The total cost of the development project
The gross development value (GDV) - i.e. what the property will be worth, or how much income it will generate

You can use our development calculator to give you the indicative terms of what you will be able to borrow for your development finance.


What criteria have to be met for development finance payments to be released?

Usually, each stage of funding will be released once a pre-agreed criterion is met. These payments can be either in advance or in arrears, and the structure depends on your property and your project.

If released in arrears, the property developer will be claiming back the cost from their lender for the works completed. In this scenario, an independent surveyor will usually value the project at each stage.

Typically, the maximum amount of funding available for release during a property development is up to around 60-70% of the total property value. Higher proportions of funding can be released, depending on the security in place against the loan facility.


So try out our Development Calculator today for a free breakdown of your development project!

FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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