It is rare that a property development loan would be taken out for a period longer than 18 months and it is most common for a loan length of 6 to 12 months when it comes to this kind of property development loans. This kind of loan is taken out by investors in order to allow them to develop property (or land) opportunities at a greater rate than they would be able to if using their own finance and is usually taken out for properties that need developing before they would be eligible to secure a mortgage, those who are looking to refurb and resell (or flip) properties and so forth. In these circumstances the investor would usually expect to make enough progress in the development to pay back the loan within a relatively quick time frame, hence the short lending terms attached to this finance option.

Lenders will look at the piece of land or property as its security so where planning permission is required, the lender will usually ask that this has been granted before development begins. It can be used for commercial or mixed residential and commercial schemes as well as on land, houses or apartments. Property development loan lenders operate in a specialised area and tend to provide loans of between 20k and 5 million but can be requested for amounts above 100k. Anything lower than this would usually fall into the bridging loan bracket. One of the most appealing things about development finance for new investors is that they do not ask for as much experience from the applicant as more traditional sources of financing would. For example, if an investor was looking to get a mortgage on a development property the bank would usually ask for evidence of successful past projects as well as a number of other requirements. Development loans, unlike mortgages are not FCA regulated (so long as the sole purpose of the loan is to be sold on and not for the property to be lived in by the applicant at any time) and so, property development lenders have different criteria to assess eligibility and so it is much more likely that new investors will be accepted for this kind of finance.

The team at Top 10 Finance are extremely experienced in this area and will be able to guide you to the loans you are most likely to be eligible for and that suit your purpose most effectively. As we realise the main reason for applying for development finance is often so that you can act fast, we will be able to give you an immediate response on the lending options you are eligible for. Once terms have been issued, solicitors on both sides instructed, surveys completed and so forth the loan would usually expect 5 to 9 weeks in total. However, it is crucial to note that property transactions can become very complicated to this could in some cases take up to 6 months where searches and valuations show up unexpected issues.