Property Development Finance and Property Finance
Property development finance sits within the wider property finance landscape and is typically used to fund projects where value is created through construction, conversion or significant redevelopment of property.
This type of funding is commonly applied to residential, commercial and mixed-use developments, where works extend beyond light refurbishment and involve structural changes, new build construction or substantial repositioning of an asset.
Property development finance is structured around both the project itself and its expected outcome, with funding often linked to the projected value of the completed development. As a result, lenders will consider not only the borrower but also the viability of the scheme, including build costs, timelines and anticipated end value.
In practice, funding is usually released in stages as the project progresses, allowing costs such as construction, professional fees and associated expenses to be funded over time. This staged approach reflects the nature of development activity and supports the management of risk throughout the build process.
Property development finance is typically used where a clear exit strategy exists, such as the sale of completed units or refinancing onto longer-term funding. The structure of the facility will often be aligned to the anticipated timeline of the project and the method of exit.
Development funding often sits alongside other forms of property finance depending on the wider project requirements. For example, bridging finance may be used for initial site acquisition, while completed developments may be refinanced onto buy to let or commercial mortgages. In some cases, tax-related considerations, such as capital allowances or reliefs, may also form part of the overall funding structure.