Property Development Finance

Property development finance is a form of funding designed to support the construction or renovation of real estate. It is commonly used by developers, builders, and investors to fund both new-build projects and the refurbishment of existing properties.

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Finance can cover a wide range of property types including residential, commercial, and industrial. The size and complexity of the project, as well as the developer’s track record and financial position, will determine how much funding is available. Loans are usually secured against the property being developed, giving the lender the right to take possession if repayments are not met.

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Development finance typically comes with a set interest rate and a repayment schedule. Funds can be used to cover land acquisition, construction costs, and professional fees.

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Bridging Finance vs. Development Finance

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Both bridging finance and development finance provide short-term funding for property projects, but the type you need depends on the scale of the works involved:

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• Light refurbishment: Mostly aesthetic changes, such as new flooring, ceilings, or wall finishes, sometimes with minor internal work.

• Heavy refurbishment or renovation: Structural changes such as moving walls, plumbing, electrics, extensions, or partial demolition.

• Ground-up development: New builds starting from an empty plot or very heavy conversions.

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Although the terminology can vary, the weight of the works is the main factor that determines whether bridging or development finance is most suitable.