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Property Development Loans

There are various types of property loans available, so you need to make sure that you are applying for the most suitable type of finance to meet your requirements. An expert adviser in property development finance options is recommended to make sure the loan is suitable.

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What are property development loans?

Property development finance is a type of loan that provides new or experienced property developers with a financial solution to be able to renovate existing properties or to build on land from scratch.

There are various types of property loans available, so you need to make sure that you are applying for the most suitable type of finance to meet your requirements. An expert adviser in property development finance options is recommended to make sure the loan is suitable.

Types of property to be financed

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In general, property development finance is available on any type of property, whether it is residential or commercial. As long as you are renting the residential property out, then it is deemed commercial as you will be expecting to make a profit from the investment.

Commercial property development finance will cover the build or redevelopment of commercial properties such as shops, offices, warehouses etc.

Property development loans explained

Property development finance is designed to be a short-term financial solution as it is designed to cover the purchase and the cost of developing or refurbishing the property.  The loan can be used to pay for any contractors or marketing required to make the property fit for purpose and attractive to potential tenants or buyers.

Property development finance is not normally given in a lump sum, rather it is given in instalments as the project continues. The amount you receive will depend on the Gross Development Value of the project (the added value to the property after the development) as well as other variables.

The amount of finance that is available will depend on your property development plans but most lenders will look to have a loan-to-cost ratio of about 60-70%. If you are applying for a property development loan, you need to have as much detail of the plan as possible, with evidence of contractor costs, financial predictions, and expected value upon completion. Income stability will also be assessed to ensure that the repayments will be affordable for the applicant as well.

The amount of finance available for property development loans will depend on the variables above but as a general rule, most lenders will offer £100,000 to £2 million. You have to consider the cost of the development and the associated costs, including interest, surveyors’, and solicitors’ fees.

Expert property development finance advisers

There are lots of property development financial options available and choosing the right one can be difficult to select. Speaking to a property development expert is advisable to save you time and energy finding a suitable finance package.

The experts at Active work daily with clients that are looking to source finance to cover their property development projects so you can rest assured that the financial advice you are getting is coming from experienced and dedicated professionals.

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What our customers say

Daniel Couchman
Daniel Couchman
12 January 2024
This review is long overdue - Active mortgages got us our dream home! I spoke with around 7 different brokers from different companies which didn’t know what they were talking about but then I found Simon at active - he was straight to the point and got us the best deal and the highest amount possible. I got a bit impatient at one point but that was due to the banks taking ages to process everything - active were calm and reassured us. Highly recommended. Excellent from start to finish Even sent us a gift for Xmas - thank you!
Meena Kanagavel
Meena Kanagavel
2 January 2024
Jamie Murray from Active Mortgages has been amazing in setting up the VAT loan, whilst we purchased our Land. Right from the start, Jamie has been proactive in finding the correct (BEST) deals for us and ensured everyone is aligned to complete on time.Highly recommend using Active Mortgages, and we would certainly be using them again for future projects.Thanks once again Jamie for all your support throughout Dec, appreciate your efforts in making sure our purchase was done on time. Many thanks Meena (and Mark Jones)
Stefan Stancila
Stefan Stancila
21 December 2023
Comprehensive advice from Jamie & easy communication through remortgage process . Recommend!
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Yasmin Bates
20 December 2023
Jamie has made the whole process of buying a house very straightforward, especially for self employed. Would 100% recommend and would use again too!
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Gerard
19 December 2023
Good experience, helped us every step of the way.
darren john coggins
darren john coggins
12 December 2023
Dan has been great from start to finish. As a first time buyer it can be quite overwhelming and confusing but Dan has went above and beyond. His process was very easy, efficient and we could not recommend him enough!
FUNMI AKINLAMI
FUNMI AKINLAMI
7 December 2023
Excellent service, hard working staff
akinlami akinwale
akinlami akinwale
7 December 2023
Excellent service, very patient and willing to help staff
Michael Bennett
Michael Bennett
5 December 2023
Dan has been great from the first phone call. He has made everything simple and taken the time to explain everything to me as a first time buyer, answering any questions I have along the way, highly recommend
james whitaker
james whitaker
31 October 2023
Great professional service highly recommended for anything financial
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