Written by Kellie Steed Reviewed by Chris Duckworth
Sources
15 September 2026
First Published
If you’re looking to secure funding from development finance lenders it’s typically structured around your construstion schedule and gross development value (GDV). However, not all lenders in this niche have the same requirements, so it’s important to select one that’s best suited to your project.
We look at different types of development finance lenders, how to compare them, and how seeking the right advice is crucial when it comes to this specialist form of lending.
What is a development finance lender?
A development finance lender is any financial institution willing to provide short-term funding for complete property build projects, conversions, and heavy refurbishments. They assess your funding application based on the projected Gross Development Value (GDV) of your project at completion.
Funding is released in stages, or tranches, and usually includes the purchase of land, as well as the building costs. Loans are repaid through sale of the completed property in most cases, although those investors planning to rent out the property, or residential home builders often opt to remortgage onto longer-term finance, like a buy-to-let mortgage.
Types of development finance lenders
Not all development funding providers operate under the same criteria, so you’ll need to select a lender that operates in your property class. They may fund either residential or commercial properties, however, some will support both types of project.
Residential Development Finance Lenders
Because the residential market is liquid and backed by consistent homebuyer demand, residential lenders often offer competitive interest rates and higher LTV caps. They are typically suitable for:
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Housing schemes
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Single-family dwellings
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Build-to-rent (BTR)
Commercial Development Finance Lenders
Commercial development finance lenders place significant weight on pre-let agreements, commercial lease terms, and the covenant strength of target tenants before approving funding. They are usually most suited for developers of:
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Logistics hubs
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Student accommodation
Find the best development finance lender
Who are the best development finance lenders?
The ideal lender for your scheme will depend on your build type, track record, project location, loan size, and whether you are undertaking a small conversion or a multi-million-pound ground-up scheme. Here are some lenders available for residential and commercial development finance:
Best Residential Development Finance Lenders
Paragon Bank
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Primary Focus: Small-to-medium enterprise (SME) housebuilders developing private residential estates, apartment schemes, and housing developments (typically 5 to 50 units)
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Loan Sizes: £400,000 to £35 million
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Key Strengths: Dedicated regional teams across the UK with strong expertise in local housing market pricing and ground-up residential builds
United Trust Bank
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Primary Focus: Residential ground-up developments, barn conversions, office-to-residential conversions (permitted development), and heavy refurbishments
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Loan Sizes: £500,000 to £30 million
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Key Strengths: Flexible underwriting for first-time or smaller developers, offering up to 65% GDV or 85% of total project costs
Close Brothers Property Finance
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Primary Focus: Experienced residential developers building single-family homes, flats, and regional residential schemes across England, Scotland, and Wales
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Loan Sizes: £1 million to £15 million+
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Key Strengths: One of the oldest principal lenders in the UK, offering personal local account management and consistent funding support throughout the build cycle
Pluto Finance
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Primary Focus: Medium-to-large residential developments, including build-to-rent (BTR), student housing, and private sale housing projects
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Loan Sizes: £5 million to £50 million+
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Key Strengths: High-leverage stretch senior options (up to 75% GDV) for experienced residential developers looking to minimize equity requirements
Best Commercial Development Finance Lenders
Shawbrook Bank
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Primary Focus: Mixed-use developments, commercial conversions, industrial developments, and office refurbishments
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Loan Sizes: £1 million to £30 million+
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Key Strengths: Strong appetite for complex mixed-use schemes (e.g., ground-floor retail with residential flats above) and commercial regeneration projects
Octopus Real Estate
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Primary Focus: Commercial real estate, student accommodation (PBSA), care homes, healthcare facilities, and large-scale commercial conversions
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Loan Sizes: £2 million to £50 million+
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Key Strengths: Substantial balance-sheet capacity, offering stretch senior funding and tailored commercial drawdown schedules
Hampshire Trust Bank
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Primary Focus: Commercial schemes, light industrial units, office developments, and mixed-use properties
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Loan Sizes: £1 million to £25 million
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Key Strengths: Dedicated commercial underwriting specialists who evaluate tenant demand and commercial leasing yields alongside construction costs
Together
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Primary Focus: Commercial refurbishment, auction purchases, mixed-use developments, and complex commercial site conversions
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Loan Sizes: £200,000 to £10 million+
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Key Strengths: Fast execution and flexible criteria for non-standard commercial properties, un-mortgageable assets, or urgent funding deadlines
These are just a handful of the development finance lenders available in each niche, so it’s important to compare all lenders available to ensure you’re choosing the best funding option for your project. Development finance is typically only accessible through an intermediary, so be sure to speak to an expert in the type of development finance you need.
How to find the right property development finance lender
Choosing the best development finance partner involves evaluating more than just the headline interest rate. Here are four critical factors to consider before submitting a credit application:
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Track record: First-time developers may require a joint venture partner or a specialist lender willing to accommodate limited experience at lower LTV thresholds. Experienced developers can unlock lower pricing and up to 90% Loan-to-Cost
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GDV Caps: Verify whether the lender's LTGDV limit (typically 65%–75%) aligns with your total build budget and profit margin expectations
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Speed & drawdown flexibility: Check how quickly the lender instructs monitoring surveyors and processes drawdown requests to prevent costly site delays
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Whole-of-Market access: Many top-tier development finance principal lenders operate exclusively through broker channels. Partnering with a specialist commercial finance broker, like ourselves, ensures your project proposal is matched to the lender offering the highest leverage and lowest overall cost of capital.
Speak to a development finance expert
To secure the best property development finance lender for your project, it’s important to compare lenders and rates from across the market. Our specialist brokers can help arrange bespoke funding, whether you’re looking to finance a small residential home or a multi-property commercial development.
At Money Helpdesk, our experienced development finance specialists have access to bespoke financing from both mainstream and specialist lenders which can be tailored to support both established and first-time property developers.
If you’d like to speak to an advisor about arranging property development finance for a free, no-obligation chat, you can get started here.
FAQs
A principal lender is the direct institution holding the capital and making the final credit decision. When it comes to development finance, principal lenders are typically accessed through a specialist broker with direct principal access.
While some development finance lenders, such as Together and Paragon bank may accept direct applications, they typically limit this option to experienced developers.
Most UK property development finance lenders will fund up to 65%–70% of the Gross Development Value (GDV) and up to 85%–90% of total project costs.
As a developer, you will typically need to contribute 10% to 20% of total project costs as a cash deposit, or use unencumbered land/property equity as security in lieu of a cash deposit.
Yes, first-time developers can secure funding, though principal lenders will evaluate the project's overall risk profile more strictly.
To gain approval without a proven build track record, first-time developers should work with a well-established main contractor operating under a standard JCT contract, hire an experienced project manager or quantity surveyor, and present a detailed, realistic build schedule through a specialist broker.
While many national institutions cover the whole of Great Britain, regional market dynamics across Northern England may require lenders with local valuation expertise and regional presence.
Development finance lenders in Newcastle and the North East frequently support urban infill residential projects and student housing conversions around Newcastle University and Northumbria University.
In South Yorkshire, development finance lenders in popular locations, such as Sheffield regularly fund industrial unit refurbishments, city-centre apartment conversions, and suburban residential schemes across Sheffield, Rotherham, and Barnsley.
To source lenders who understand local build costs, contractor availability, and sales velocity in regional hubs like Newcastle and Sheffield, speak to one of our development finance experts today.