Bridging Loans for Property Developers
By Joshua Giles, Founder and Director · Reviewed by the CoreFi credit team
Last updated 20 July 2026
CoreFi is a broker, not a lender. We do not set rates and lenders make all credit decisions.
In short: Property developers use a bridging loan as fast, short-term first-charge finance to secure a site, then repay on sale, refinance or once development finance is drawn in behind it. Facilities typically run from £150k to £5M over 3 to 18 months, priced on the security, LTV and exit. We are a broker and place your case with specialist bridging lenders.
A bridging loan for a property developer is a first-charge short-term loan secured against the asset you are buying or against existing security, designed to be repaid when you sell, refinance onto a term product, or pull development finance in behind it. The lender is not a high-street bank and does not want to be. It is a specialist bridging house whose credit committee understands a 28-day auction deadline or a planning-gain play in a way that a relationship manager at a clearing bank does not.
The mechanic that matters here is how the advance is calculated. Regulated bridging is assessed on current open-market value. For developer bridging, lenders will often advance against gross development value (GDV), the valuation your surveyor puts on the completed or refurbished property. Day-one LTV against current value might be 65-70%; the same lender will go to 65% of GDV, which on a property you are buying at a significant discount to its finished worth can mean you are effectively borrowing more than the purchase price. That is why these loans exist.
Interest is almost always rolled up rather than serviced monthly. On a six-month bridge at, say, 0.75% per month, that is roughly 4.5% of the loan added to the redemption figure. You pay nothing until exit. For a developer who needs cash in the project, not going out the door as monthly interest, this matters.
The exit is the thing every lender scrutinises first. Sale is clean and widely accepted. Refinance onto a buy-to-let or commercial mortgage works if the completed property generates sufficient rent to service the new debt. Development finance take-out works if planning is in place and the build cost is supportable. We will not put you in front of a lender whose exit requirements do not fit your actual plan.
We are a commercial finance broker, not a lender, so we cannot promise you a rate or an approval. The lender decides, after they have seen the security, your track record, and a credible exit. What we do is place you with the right lender quickly.
Key Benefits
- Auction lots need completion in 28 days; a bridging lender can draw in 5 to 10 working days where a mortgage cannot get close
- GDV lending means you can borrow against the finished value of a refurb project, not just what you paid for it today
- Rolled-up interest keeps your cash in the deal rather than going out monthly, which matters on a tight development margin
- Some lenders will fund a purchase subject to planning where permitted development rights apply, so you are not held back waiting for full consent
Frequently Asked Questions
Can I borrow against the after-works value?
Yes, with certain lenders. For light refurbishment projects, advances of up to 65% of GDV are available, subject to a surveyor-approved schedule of works and a clear exit. Lenders want to see that the works are deliverable in the loan term and that the GDV assumption is not optimistic.
Do I need planning permission before applying?
Not always. Where permitted development rights apply, many bridging lenders will fund the purchase now and allow you to pursue planning during the term. Full planning is required before you can access development finance, so if your exit is a dev finance take-out, you need to be realistic about timescales.
What deposit do I need?
Most bridging lenders sit at 65-75% LTV, meaning you need 25-35% in. Experienced developers with a demonstrable track record can sometimes access 80% LTV, but that is the exception and the rate reflects the higher advance. Cross-charging additional security can reduce the effective deposit requirement.
How are bridging loan costs structured?
The main costs are the monthly interest rate (typically 0.39-1.5% per month depending on LTV and security quality), an arrangement fee of 1-2% of the loan, a valuation fee, and solicitor fees for both you and the lender. On a rolled-up basis those costs are added to the redemption figure, not drawn from your loan on day one.
Bridging Loans calculator
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Monthly interest
£2,125
Total interest
£25,500
LTV
56%
Rolled-up cost
£25,500
Illustrative estimate only, not a quote or financial advice. A broker will confirm exact terms based on your circumstances and lender appetite.
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Development Finance Explained: GDV, LTC and LTGDV
How UK development finance works: LTC, LTGDV and day-one land LTV explained, plus how land and build are funded and repaid at exit.
Refinancing a Bridging Loan onto a Term Product
Refinance a bridging loan onto a term mortgage before the bridge ends. What lenders check: seasoning, post-works valuation, timing to avoid extension.
Bridging finance by location
Lender appetite varies by city and region. If you would rather start from where your business is based, these local guides cover the same funding with the local picture.
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Get matched with lendersCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.