Construction Finance 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: £250k - £25M over 12 - 24 months. Development finance is a single facility that covers both the land purchase and the build costs, drawn down in tranches as the project hits agreed milestones.
Development finance is a single facility that covers both the land purchase and the build costs, drawn down in tranches as the project hits agreed milestones. The lender appoints a monitoring surveyor who signs off each drawdown, so you only pay interest on what has actually been released, not on the full loan from day one. That mechanic is what makes it work for a 12 to 24 month build.\n\nLenders price on loan-to-GDV (gross development value, the value of the finished scheme) rather than on the land value alone. Most senior lenders will go to 65% of GDV, which typically covers 70 to 85% of costs depending on the margin in your scheme. If you need higher leverage, mezzanine finance can sit behind the senior debt, though it adds cost and complexity.\n\nTrack record matters here more than on almost any other product. A developer who has delivered three comparable schemes in the past four years gets sharper pricing, faster credit, and more headroom than someone doing their first ground-up. We are straight with clients about that, because it shapes which lenders are actually in appetite. The high street will not touch ground-up development. The lenders who fund it are specialist short-term lenders and challenger banks, and their credit teams want to see your build programme, your sales strategy, and your exit before they issue a term sheet. As a broker we place the deal with those lenders; we do not lend, and no term sheet is guaranteed until a lender has underwritten the scheme.
Key Benefits
- Stage drawdowns mean you pay interest only on money drawn, not on the full facility from day one
- GDV-based lending can cover 70 to 85% of your total costs where the scheme margin supports it
- Repeat-borrower programmes with many lenders mean faster credit and less legal friction on your second deal
- Mezzanine finance behind the senior debt lets you preserve more equity, at a cost
Frequently Asked Questions
Can I fund multiple phases of a development?
Yes, and it is worth structuring carefully. Sales receipts from Phase 1 can pay down the facility and cut your net equity requirement for Phase 2. Some lenders will fund the whole scheme under one facility; others prefer to treat each phase separately. Which works better depends on the size of the scheme and the lender's single-borrower exposure limits.
What about commercial development?
Commercial schemes (offices, retail, industrial) are fundable, but lenders look hard at pre-let status. A unit with a signed lease or heads of terms is a fundamentally different proposition to a speculative build. Go in without pre-lets and the lender will stress the exit scenario carefully, and that shows up in the LTV they will offer.
Can I use development finance for refurbishment?
It depends on the scope of works. Cosmetic refurbishment with no structural change is usually a bridging loan job, not development finance. Once you are into structural work, a change of use, or a conversion that needs building-regulations sign-off, development finance is the right product. The monitoring-surveyor process makes sense at that level of complexity.
What fees are involved?
The arrangement fee is typically 1 to 2% of the facility. Add a monitoring surveyor fee (roughly £500 to £2,000 per site visit, usually four to six visits on a standard scheme), lender legal fees, your own legal fees, a valuation, and potentially an exit fee of 0 to 1%. Interest accrues on drawn amounts only and is usually rolled up and repaid on exit rather than paid monthly. No broker can quote you an exact cost until a lender has reviewed the scheme, because rates vary by lender, track record, and LTV.
Related Funding Options
Construction & Development Finance UK
Development finance released in stages against your build schedule, not as a lump sum. We place construction finance for UK developers from £250k to £25M.
Bridging Loans for Property Developers
Bridging finance for UK property developers: auction completions, light refurb, GDV lending, and chain breaks. We place these deals regularly. Call us to discuss yours.
Commercial Mortgages for Property Developers
Refinance completed developments onto long-term commercial mortgages, build a retained portfolio, or pull equity into the next site. We broker commercial mortgages for UK property developers.
Development 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.