Development finance in property refers to the financing of construction projects, such as new buildings or the renovation of existing structures. The financing can be used to cover a variety of costs associated with the project, including land acquisition, design and planning, construction, and marketing and sales.
Typically, development finance in property is provided by lenders such as banks or private equity firms. The lender will evaluate the project's feasibility and potential profitability before providing the financing. The developer will usually need to provide a detailed business plan and financial projections to the lender to demonstrate the viability of the project.
Once the lender has approved the financing, the developer will receive the funds in stages, known as drawdowns, as construction progresses. The lender will usually send a surveyor to inspect the property at each stage before releasing the next drawdown. This helps to ensure that the project is progressing as planned and that the funds are being used appropriately.
The loan will typically be structured as a short-term loan, with a term of 1-3 years.
During this time, the developer will need to complete the project and sell or refinance the property to repay the loan.
This type of loan usually comes with higher interest rates and fees than traditional mortgage loans due to the higher risk associated with construction projects.
In summary, development finance in property provides developers with the necessary funding to construct or renovate buildings. The financing is typically provided by lenders and is based on the project's feasibility and potential profitability. The loan is structured as a short-term loan and is repaid through the sale or refinancing of the property.
Why choose us?
Robin Hood Mortgages Ltd are excited to be your go-to property development finance broker. We’re confident that we can help you find the perfect finance solution for your property development needs.
We will look to guide you on key issues to be aware of that may impact on financing options, talk through your plans with key lenders and advise you on the most appropriate development finance route.
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Whilst Robin Hood Mortgages Ltd take all reasonable steps to ensure the accuracy and timeliness of the information contained on this website. We cannot guarantee this and accept no liability for any errors or omissions. Any information provided on this website is for information purposes only. Full advice and recommendation can only be obtained by a suitably qualified adviser. Under no circumstances should any of the information contained within this website be construed as advice. You should seek professional advice in respect of your own circumstances. The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK.
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Robin Hood Mortgages Ltd is Authorised and regulated by the Financial Conduct Authority under reference 987739. You can check this on the FCA’s website www.fca.org.uk or by contacting the FCA at 0800 111 6768. The firm is registered in England & Wales at P.O. Box 11018, Nottingham, NG5 0NE. Telephone: 01156 712351 under reference 11416342.
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