Apply for property development finance with BuyAssociation to find out:

  • Who is eligible for property development finance?
  • How does it work?
  • What are the benefits of using property development finance?


BuyAssociation are here to answer any questions you may have and to help you fund your project.

Are you a developer looking to fund your project?

If so, you might benefit from development finance.

Property development finance is a type of funding used to pay for the construction, conversion, or heavy refurbishment of buildings. This is usually a short-term loan that funds the project during the build stage.

At BuyAssociation, we work closely with some of the UK’s top property developers and connect them directly with our database of over 26,000 property investors. If you have a project that needs funding, we can help to match you with the right investor and tell you how much funding you’re likely to get.

If you would like us to appraise your site to find out if your project might be eligible for development finance, fill out the adjacent form and we’ll be in touch.

Alternatively, you can call us with any queries on +44 (0) 333 123 0320.

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What are the benefits of property development finance?

Development finance loans give developers the opportunity to invest much less of their own money in a project, with investors often covering up to 90% of the building costs, if not the full amount.

This is great news for developers for two reasons:

  1. You can use the money you’ve saved on development costs to invest in other projects as new opportunities arise.
  2. You are far less committed to the project financially, which means your own savings will be protected.

Another major benefit of taking out a loan for property development is that you’re likely to see a far greater return on investment. By putting much less of your own money into the project and only reducing your overall profit by a small amount, property development funding can be an especially lucrative route for investors.

Development finance can be repaid relatively quickly and interest is only charged on the released funds, which helps to keep overall borrowing costs to a minimum.

How does development finance work?

With development financing, the funds are usually released in stages. The initial release is typically used to purchase the site, or to refinance any existing debt that might have been accrued if the property is already owned.

Once the site is secured, the rest of the funds will be released periodically to pay for the construction work. The lender will check on your progress with each fund release to ensure that you’re staying on schedule and completing the work as agreed with them in the loan terms.

To avoid any issues or delays with receiving your finance instalments, you should stick to your development schedule as closely as possible and inform the investor straight away if you will have to deviate from it.

After the project is completed, you will be expected to pay back the amount borrowed in full and with interest. Interest rates for property development finance tend to start at 4.5%, but rates of 6.5-9% are far more common.

The amount of interest you have to pay, and when you have to pay it, will be agreed with the investor before any official loan agreement is signed.

Got a question? Take advantage of our free guides packed with expert investment advice, or contact us today to speak to an independent consultant.

  • How long will my application take?

    The BuyAssociation team will process your application and get in touch with you about the next steps as quickly as possible. However, the amount of time it will take for the process to be completed and for you to receive your funds will vary from investor to investor.

    If the deadline for your project is particularly tight, let us know and we will prioritise your application to ensure your development loan is secured in time.

  • When should I apply for development finance?

    You’ll usually only be eligible for a development finance loan once your site is secured and you have full planning permission. If you want to borrow earlier in the process, it might be beneficial to consider a different type of loan, such as planning gain finance.

    You should apply for your property development loan as early as possible to allow for any delays. The application process can be complex, and it’s difficult to predict when and where new information might pop up that prevents things from moving along as quickly as you would like.

  • How much can I borrow?

    The amount of funding you will receive depends on the type of property development project you plan to invest in. This amount will be assessed on an individual basis.

    The BuyAssociation team will identify how much you might need based on the information you supply in your application and will help to match you with an investor who can provide the right financing to meet your requirements.

What are the different types of development financing?

The most suitable type of property development finance for your project depends on how ‘heavy’ the project will be and the level of work involved.

New-build projects nearly always require development finance loans. The developer might use development exit finance to reduce costs after the project has been completed, but that can’t be done until the project is absolutely watertight.

Large-scale projects fall under the heavy refurbishment category. As well as aesthetic changes, these types of projects might also require moving internal walls or electrics, adding rooms, or even partial demolition and rebuilding.

These projects are usually funded using property refurbishment finance, but development finance might be a more suitable option for particularly large or complex schemes.

As you’d expect for this type of project, property refurbishment finance is typically the most suitable option. This is a type of bridging loan that covers anything from light refurbishment right up to extensions and structural changes.

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What is the difference between a property development loan and a bridging loan?

There is a big overlap between property development loans and bridging loans, but the key difference depends on how extensive the work involved is going to be.

If the project involves a significant extension (40% of the floor space or more), then you will most likely need a property development loan. Bridging loans, on the other hand, are usually for light refurbishment projects.

Ground-up developments will always require a development finance loan. Conversions that do not involve any type of extension could qualify for either a property development loan or bridging loan depending on how extensive the work on the property will be.


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How is development finance repaid?

Developers usually repay their development finance loans in one of three ways:

  • Paid in full – The total loan amount can be paid back in full using the profits made after the project is completed and the properties have been sold.
  • Refinancing using a long-term loan – The developer may choose this option if they want to keep the property for personal use or rental purposes, rather than selling it immediately.
  • Refinancing using a development exit bridging loan – The developer may choose this short-term loan option if they want to fund a new development project before the current project has been sold. You might also choose to take out a development exit bridging loan to give yourself some breathing space for completing minor works and finding buyers.
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What additional costs are involved in development finance?

There can be a number of fees that you have to pay when taking out development finance, and it’s important to factor in these additional costs before committing to a loan.

Costs and fees to take into consideration:

  • Set-up cost – This charge is calculated as a percentage of the full loan amount and is generally 1% or higher. This will be added to the total repayment amount.
  • Exit fee – This cost is based on the total loan amount, or the value of the development project once it’s completed. It is typically charged at around 1%.
  • Professional fee – This is the cost of any professionals that you will need to hire to help with the development process, including builders, architects, and solicitors.
  • Contingency cost – This is the amount of funds that you have set aside to cover any unforeseen expenses. An average contingency amount is typically 15-20% of the total cost of the development.
  • Interest – The borrower will incur a monthly interest charge that will increase every time funds are released. The interest amount will usually be added to the loan, which is referred to as ‘roll up of interest’.

Secure property development finance today with BuyAssociation

We can help you to secure funding for your property development project by connecting you directly with our database of over 26,000 property investors.

The BuyAssociation team will match you with the right investor and help you to work out how much funding your project is likely to get.

Fill out the form on this page or contact us directly on +44 (0) 333 123 0320 to secure development finance for your next project.

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