Securing development finance can significantly impact the success or failure of a property project. Whether you are planning to build from the ground up, convert an existing building, or renovate for resale, lenders want to see evidence that your project is viable and that you can deliver on your plans.
This checklist outlines the essential criteria most lenders expect you to meet. It is designed to give you a clear picture of what is required so you can prepare your application with confidence.
1. A clear and detailed development plan
Lenders need to know exactly what you are building or renovating. This means presenting:
- Full project description, including the size, scope, and purpose of the development
- Architectural plans or design drawings
- Planning permissions, where applicable.
- Timeline outlining the main phases of construction
A vague or incomplete plan is one of the fastest ways to lose lender interest. Make sure your proposal is precise, realistic, and supported by professional documentation.
2. Proof of planning permission (where required)
If your development requires planning consent, you must have approval in place before applying for finance. While some permitted development rights allow you to bypass full planning permission, you will still need to prove the project falls within these allowances.
Provide copies of all planning approvals, correspondence with local authorities, and any conditions attached to your consent.
3. Solid experience or a qualified team
Lenders are more confident funding projects led by developers with a track record of successful builds. If you are relatively new to property development, you can still strengthen your case by partnering with experienced contractors, architects, or project managers.
Include:
- Details of past projects
- References or case studies
- Provide the qualifications and experience of your professional team.
4. Clear build cost estimates
You must present accurate costings for every stage of the development. This includes:
- Land acquisition (if applicable)
- Construction costs are broken down by stage.
- Professional fees for architects, engineers, surveyors, and legal work
- Contingency funds to cover unexpected expenses
Most lenders will expect these figures to come from professional quantity surveyors or reputable contractors, not rough personal estimates.
5. Realistic gross development value (GDV)
The Gross Development Value is the total expected value of the completed project. Lenders use this figure to determine how much they are willing to lend. GDV must be backed by professional valuations.
For example, if your project’s GDV is £1 million, a lender may agree to finance up to 65 to 70 per cent of this figure.
6. Personal financial contribution
Few lenders will cover 100 per cent of the costs. They expect you to have some financial commitment to the project. This usually comes in the form of:
- A deposit towards a land or property purchase
- This includes covering a portion of the build costs using your own funds.
- Equity from an existing property
This contribution shows you are sharing the financial risk.
7. A clear repayment strategy
Development finance is short term. Lenders will want to know how you plan to repay the loan. Common repayment strategies include:
- Selling the completed property or units
- Refinancing onto a longer-term mortgage
- Retaining the property for rental income and refinancing accordingly
Without a clear exit strategy, even the strongest application can be rejected.
8. Provide evidence of good credit and financial stability
Your personal and business credit history will be reviewed. While some specialist lenders will work with applicants who have a less-than-perfect score, a poor financial history can limit your borrowing options or increase your costs.
Provide bank statements, proof of income, and any supporting documents that show you are financially stable.
Summary
Securing development finance is not simply about having a brilliant idea. Lenders seek evidence that your project is well planned, financially sound, and deliverable within a set timeframe. By preparing each item on this checklist in advance, you greatly improve your chances of approval and can move forward with your project with confidence.