Development finance
Property development finance structured around the project.
Intra helps developers and property investors explore finance for qualifying development, conversion and substantial refurbishment projects.
Project finance
Acquisition & development
Project exit
Sale or longer-term refinance
Project-led finance
Development lending looks beyond the property as it stands today.
A development lender needs to understand what the property is expected to become, what it will cost to get there and how the facility will ultimately be repaid.
That can involve reviewing the site or existing property, planning position, construction programme, build costs, professional team and expected completed value.
The developer's experience, equity contribution and exit strategy can also materially affect which lenders may be prepared to consider the project.
Development requirements
Different projects require different funding structures.
Project size, planning, build complexity and developer experience can all influence the type of facility and lender required.
01
Ground-up development
Finance for qualifying residential or mixed-use schemes where a property or site is being developed from the ground up.
02
Conversions
Funding may potentially support the conversion of existing buildings into residential or mixed-use accommodation, subject to planning and lender criteria.
03
Heavy refurbishment
More substantial refurbishment projects may require development-style finance where works extend beyond standard property improvement.
04
Property extensions
Qualifying projects involving significant extensions or structural alteration may potentially be considered by development lenders.
05
Multi-unit schemes
Development finance can potentially support projects involving several residential units where the structure and economics of the scheme meet lender criteria.
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Development exit
Once a project is complete, separate finance may potentially be required while completed units are sold or refinanced onto longer-term borrowing.
Funding structure
Development finance can evolve as the project progresses.
Unlike a standard mortgage, development finance may involve an initial advance followed by further releases as construction progresses.
The structure varies between lenders and projects, with releases potentially linked to agreed milestones, monitoring and evidence of completed works.
Discuss your funding requirementDevelopment facility
Funding may be structured around acquisition, construction and the evolving value of the project.
Project lifecycle
The finance needs to support the project from entry to exit.
Acquisition
Funding may contribute toward the purchase or refinance of the development site or existing property.
Construction
Further funds can potentially be released during the project in line with agreed stages and lender requirements.
Completion
The development reaches practical completion and the completed value and final project position are established.
Exit
The facility is repaid through sale, longer-term refinance or another agreed repayment route.
Costs & completed value
The lender needs to understand both what the project costs and what it may be worth when complete.
Development underwriting can consider acquisition cost, build costs, professional fees, contingency and other project expenditure alongside the expected gross development value.
These figures help the lender assess leverage and the overall financial structure of the scheme.
Completed property values and project costs are not guaranteed and remain subject to valuation, market conditions and the progress of the development.
What lenders consider
Development underwriting considers the entire project.
The lender may assess the site, planning, costs, experience, completed value and proposed exit alongside the borrower's wider financial circumstances.
01
Site & acquisition cost
The lender will consider the purchase price or current value of the site or property being developed.
02
Build costs
The proposed construction, professional and associated development costs form a central part of the funding assessment.
03
Planning position
Planning permission, permitted development rights and the status of any conditions can materially affect lender appetite.
04
Developer experience
The borrower's previous development experience can be particularly important on larger or more complex schemes.
05
Gross development value
The expected value of the completed scheme is commonly considered alongside total project costs and proposed borrowing.
06
Exit strategy
The lender will normally want a clear plan showing how the development facility is expected to be repaid.
Developer experience
Experience can influence how lenders view the project.
Development lenders may consider the borrower's track record, scale of previous projects and experience with similar types of construction or conversion.
Where a developer has less direct experience, the lender may place greater emphasis on the professional team, project simplicity, equity contribution and wider strength of the proposal.
Development exit
Completion of the build does not always mean completion of the finance.
A development facility may reach the end of its agreed term before every completed unit has been sold or longer-term borrowing is in place.
Where appropriate, development exit or bridging finance can potentially provide additional time after practical completion, subject to property, leverage and lender criteria.
Explore bridging finance→
Repayment strategy
The exit needs to be credible before development begins.
The lender will normally want to understand how the development facility is expected to be repaid once the project reaches completion.
Depending on the strategy, this may involve sale of completed units, refinancing retained properties, development exit finance or another clearly evidenced repayment source.
The Intra approach
Understand the full project before approaching the lender.
Development finance requires understanding the acquisition, planning, construction costs, completed value and proposed exit as one connected transaction.
Project
Understand
We establish the site, planning position, proposed works, project costs, experience, required borrowing and intended exit.
Funding strategy
Structure
Your adviser considers how acquisition and development costs could potentially be structured within the proposed facility.
Lender criteria
Research
We research lender appetite around project type, leverage, experience, gross development value and proposed exit.
Application
Apply
Once an appropriate route is identified, we prepare the case with the relevant project, financial and supporting information.
Project finance
Manage
Our team supports the application through valuation, underwriting, legal work, facility offer and completion.
Lender access
Development lenders can have very different appetites.
Different lenders can take different approaches to project size, developer experience, planning, leverage, build costs and completed value.
Lender availability and suitability depend on the project, property, planning, costs, experience, leverage and individual circumstances.
Why Intra
Development finance needs to work around the project, not against it.
The appropriate lender depends on much more than headline pricing. Project structure, leverage, experience and exit can all matter.
01
Understand the scheme
We establish the site, planning position, works, costs, expected completed value and overall project objective.
02
Review the developer
Experience, equity contribution, professional team and wider circumstances are considered alongside the project.
03
Structure the finance
We consider the acquisition requirement, development costs and how funding may need to be released during the project.
04
Manage the application
Our adviser and administration team support the case through valuation, underwriting, legal work and facility completion.
Related specialist finance
Explore related property finance.
Short-term funding
Bridging Finance
Short-term property finance for acquisition, refinancing and development exit requirements.
Commercial property
Commercial Finance
Finance for commercial premises, investment property and mixed-use assets.
Investment portfolio
Portfolio Finance
Finance for landlords and investors with multiple UK properties.
Frequently asked questions
Questions about development finance.
These answers are general. Available finance depends on the project, planning, costs, experience, property and lender criteria.
01What is development finance?
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What is development finance?
Development finance is property-backed funding designed for qualifying development, conversion and substantial refurbishment projects. Facilities are generally structured around the project costs, completed value and proposed exit.
02Can development finance cover both the purchase and build costs?
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Can development finance cover both the purchase and build costs?
Potentially. Some development facilities can contribute toward both acquisition and qualifying development costs, subject to lender criteria, leverage and the overall project structure.
03How are development funds released?
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How are development funds released?
The structure varies by lender. Development funding may be released in stages during the project, commonly subject to monitoring, valuation or confirmation that agreed works have been completed.
04Do I need development experience?
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Do I need development experience?
It depends on the project and lender. Previous experience can be particularly important for larger or more complex developments, although some lenders may consider less experienced developers where the wider team and project are suitable.
05What is GDV?
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What is GDV?
GDV means gross development value. It refers to the estimated value of the completed development and is commonly used by lenders when assessing a project's overall funding position.
06How is development finance repaid?
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How is development finance repaid?
The proposed exit will depend on the project. Common routes can include selling the completed units, refinancing onto longer-term borrowing or another clearly evidenced repayment source.
07Can Intra help with development exit finance?
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Can Intra help with development exit finance?
Potentially. Where a development is complete but the original development facility needs to be repaid before units are sold or refinanced, a separate development exit or bridging facility may potentially be considered.
08Is development finance regulated by the FCA?
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Is development finance regulated by the FCA?
The regulatory position depends on the property, purpose and individual circumstances. Many forms of property development finance are not regulated by the Financial Conduct Authority.
Some forms of development and specialist property finance may not be regulated by the Financial Conduct Authority. The regulatory status of a transaction depends on the individual circumstances involved.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or other loan secured upon it.
Development finance
Discuss your development project with an Intra adviser.
Tell us about the site, planning position, proposed works, costs, completed value and how you expect the facility to be repaid.
enquiries@intra-pf.com