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Development Finance

Specialist funding for property development projects

Development finance is short-term property funding designed to help developers, investors and business owners purchase, build, convert or refurbish property.

It can be used for projects ranging from light refurbishment through to ground-up development, including residential, commercial and mixed-use schemes.

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At Henden Financial, we help clients review suitable development finance options, understand the likely costs, assess the funding structure and consider the exit strategy before proceeding.

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Development finance is specialist lending. It is usually more complex than a standard mortgage because lenders will consider not only the current property value, but also the proposed works, planning position, build costs, developer experience and the expected end value of the completed project.

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Your property may be repossessed if you do not keep up repayments on your mortgage.

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Development Finance FAQ

What can development finance be used for?

Development finance may be suitable for:

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  • ground-up residential property development;

  • commercial property development;

  • mixed-use development schemes;

  • property conversions;

  • change-of-use projects;

  • heavy refurbishment;

  • light refurbishment;

  • permitted development projects;

  • part-completed developments;

  • site acquisition and build costs;

  • refinance of an existing development facility;

  • release of capital from a completed or near-completed scheme.

 

The right type of funding will depend on the project, planning status, borrower experience, security available, loan-to-value, loan-to-cost and the proposed repayment route.

What is residential development finance?

Residential development finance can help fund projects such as new-build houses, flats, conversions, extensions or refurbishment of residential property.

Lenders will usually assess the scheme against the expected gross development value, commonly known as GDV. This is the estimated value of the completed development.

 

They may also review:

  • planning permission;

  • build schedule;

  • project costs;

  • professional team;

  • developer experience;

  • property location;

  • comparable sales evidence;

  • contingency budget;

  • expected sale or refinance route.

 

Funding may be released in stages as the development progresses.

What is commercial development finance?

Commercial development finance may be used for offices, retail premises, industrial units, hospitality premises, warehouses, healthcare premises or other business-use property.

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Commercial projects can be more specialist because lenders will often consider the intended tenant, business use, lease potential, planning position, market demand and resale or refinance prospects.

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This type of funding may be suitable where you are developing a property to sell, retain, let, or occupy through your own business.

What is mixed-use development finance?

Mixed-use schemes combine residential and commercial elements. A common example is a retail unit with flats above, or a larger scheme containing both residential and business premises.

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These projects can require more detailed lender assessment because the security, planning, valuation and exit route may involve different property types.

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We can help you approach lenders that understand semi-commercial and mixed-use development projects.

How does development finance work?

Development finance is usually arranged for a short term, often with funds released in stages.

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A lender may provide funding towards:

  • the property or site purchase;

  • construction costs;

  • professional fees;

  • refurbishment costs;

  • conversion costs;

  • interest rolled into the facility;

  • refinance of an existing development loan.

 

The lender will normally appoint a valuer or monitoring surveyor to assess the project. For larger or more complex developments, stage releases may depend on progress reports and valuation updates.

Why is it important to have an exit strategy?

The exit strategy is how the development finance will be repaid.

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Common exit routes include:

  • sale of the completed units;

  • refinance onto a buy-to-let mortgage;

  • refinance onto a commercial mortgage;

  • refinance onto a residential mortgage where appropriate;

  • refinance onto longer-term investment finance;

  • repayment from another agreed funding source.

 

A credible exit strategy is essential. If the project is delayed, costs increase or sales take longer than expected, the finance may become more expensive and the lender may charge extension fees or default interest.

What will lenders ask for?

Development finance lenders may ask for:

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  • details of the property or site;

  • planning permission documents;

  • drawings and plans;

  • build cost schedule;

  • development appraisal;

  • schedule of works;

  • gross development value estimate;

  • evidence of deposit or borrower contribution;

  • developer CV or previous project experience;

  • details of the contractor and professional team;

  • valuation report;

  • expected sale or refinance strategy;

  • company accounts or personal financial information where relevant.

 

Having the right documents ready can help reduce delays and improve the quality of lender discussions.

What are the development finance costs?

Development finance can include several different costs. These may include:

  • interest;

  • lender arrangement fees;

  • valuation fees;

  • monitoring surveyor fees;

  • legal fees;

  • broker fees;

  • exit fees where applicable;

  • administration fees;

  • extension fees if the project overruns;

  • default charges if the loan is not repaid on time.

 

The cheapest headline rate is not always the best option. The overall structure, speed, lender reliability, drawdown process and exit flexibility can be just as important.

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Why Choose Us?

There are many considerations when choosing someone to help you with your first mortgage. Getting it right could save you thousands. During our initial consultation we will go through the process together and assess your suitability. We offer a comprehensive range of products from across the market, which means we aren't limited to a smaller selection of products and can choose from thousands of available lenders.

20 Years Experience

Our wealth of experience across the industry means our knowledgeable advisors can provide a high level service.

No Offer, No Fee

We are so confident that we will find you the right mortgage, that we only ever charge when you receive a full mortgage offer. For most people this takes them forward to a successful house purchase.

Comprehensive Market Access

You won't be missing out on any great deals. We can access all of the mortgage products which are currently available and know how to find you the most suitable deal.

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Henden Financial Limited

Guiding you through the process of buying your first home

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Henden Financial Limited

Arena Business Centres 3F17

Abbey House

282 Farnborough Road

Farnborough

Hampshire

GU14 7NA

©Copyright 2026 Henden Financial Ltd
Henden Financial Limited is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Henden Financial Limited is a company registered in England and Wales with company number 09538350. The registered office address is Arena Business Centre, Abbey House 3F17, 282 Farnborough Rd, Farnborough, GU14 7NA. The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

 

There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £399 to £999 and this will be discussed and agreed with you at the earliest opportunity. Think carefully about securing other debts against your home.

Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

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