Property Development Funding Criteria

As a general rule, lending criteria will be based around the following:

• Loan sizes are from £50,000 with no upper limit

• Term of loan up to 24 months more usually 12-15

• Interest rates from 4% -8% p.a  this depends on the loan to value and location

• Interest will be deducted from the sales so no monthly payments.

• A Lender arrangement fee is typically from 1-2% of the loan amount.

• In certain circumstances (particularly where the LTV is high) an exit fee could  be payable

• LTV up to 90% of all Costs (land and or building and all development costs)  or 70% of GDV

• Drawdowns are made in according to your cash flow agreed.

These are the basic, however, we deal with all of the property development finance lenders in the UK and the amounts and rates of interest they charge can literally change on a daily basis, it could be that they have had a number of completions and have cash sitting in the bank that they need to lend out again. In these circumstances, they become more competitive on the development finance rates they offer and even the loan to values.

Equally, if a development lender has most of their funding out, you would not get a competitive interest rate or loan to value. This is why you should always compare rates daily.