What is Development Finance?
Development finance is a loan that can be used to build or renovate residential, commercial, or mixed-use properties. Experienced builders and developers are frequently provided development finance in order to generate the funds necessary to turn their building concepts into a commercial reality. When approving a loan, specialist development finance lenders will assess the property's future value.
What do I need to get Development Finance?
Lenders will ask you for a considerable amount of paperwork and you need to be prepared to have this in hand in order to have a smooth application. Each lender will have their own requirements but typically, they will require the following documents:
- Application form
- An Income and expenditure statement
- CV and details of your development experience
- Planning permission
- Details of your proposed exit plan
- Proof of ID, residence, and deposit
FAQ
To get into property development; you must first decide on what kind of property developer you will become, compare the potential of opportunities and property investment strategies, learn how to best leverage property development finance and become an expert by diversifying a property portfolio.
It can seem as though getting into property development is a sure thing. Buy a rundown house, do it up on the weekends and sell on for a profit, or simply rent it out and reap in the rental yields each month.
It’s always beneficial to liaise with someone experienced to get advice and/or assistance.
Typically, lenders look at providing up to 75% of the Gross Development Value (GDV). It is possible to get 100% development finance, however, you'll need to provide additional security, usually in the form of property or land. It can be your own property, investment property or land that could be used for development in the future.
Development finance is possible with credit issues, the case will depend on previous experience and the exit strategy.