Development finance is a form of lending that runs on a short-term basis and provides investment funds to build projects such as:
- Apartments, and flats.
- Commercial premises.
- Land investments.
- Office blocks.
- Residential conversions.
- Residential housing.
- Retail premises.
Here, the Revolution team runs through what development financing means, what projects it is most suitable for, and how repayments work.
There are multiple ways to finance refurbishments, conversions and new-builds, and a lot depends on the size and purpose of the development.
For more advice with finding competitive development finance, or understanding the most suitable financing for your needs, give us a call on 0330 304 3040 or email at email@example.com.
How Does Property Development Finance Work?
Development finance is usually short-term and paid on an interest-only basis. Most applicants will be:
- Property developers, or
- Builders constructing their own property, or
- Self-build applicants with no professional experience.
This sort of loan is released in tranches, at pre-agreed stages of the build. Most lenders will require a site visit at each stage before releasing the funding.
In most cases, you can borrow around 70-75% of the value of the site investment and up to 100% of the cost of the build.
How Do I Apply for a Property Development Mortgage?
The best way to have your development finance application approved is to demonstrate that the development is viable, and you have a solid exit strategy to be able to pay back the loan.
In many cases, the exit strategy is to sell the development on completion, or remortgage once the construction is finished.
Other criteria include:
- How much experience you have in the property development sector.
- Your credit rating and credit score.
- How much deposit you have available to put down.
Three Stages of Applying for Development Financing:
- Contact Revolution Brokers on 0330 304 3040 or send an email to firstname.lastname@example.org. We will arrange a time for a chat with one of our development finance specialists.
- Your advisor will recommend the most suitable form of lending, and give you an indication as to what they expect you will be able to borrow.
- If you decide to proceed, they will scour the UK lending market, to create a short-list of lenders and products that match your profile.