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Permitted Development Funding

Have you heard about permitted development funding?

Back in 2015, The Town and Country Planning (General Permitted Development) Order opened up new avenues for property owners. They could now undertake specific types of projects without the hassle of applying for planning permission.

These permitted development rights encompass extensions within certain constraints and, in select cases, altering a building's use without navigating through additional bureaucratic hurdles.

Permitted development funding emerges as a financial solution tailored explicitly for such ventures.

Noteworthy Features

Flexible terms spanning from 6 months to 3 years.

There are zero upfront fees to burden your finances.

Accessible funding for both residential and commercial developments.

There is no ceiling on the amount you can secure.

Permitted development property finance: the benefits

Let's delve into the realm of permitted development property finance and uncover the myriad advantages it brings to property developers and landlords alike. Picture this scenario: You're bursting with ideas to revolutionise a property, yet financial constraints threaten to stall your plans. Enter permitted development finance, a lifeline offering the necessary funds to propel your development dreams forward. Let's dissect the perks of this financing avenue.

Adaptability: The hallmark of development finance for permitted development schemes lies in its adaptability. Unlike conventional loans, this financing option is finely tuned to suit the unique demands of property developments. Whether you envisage converting an office space into residential units or expanding your rental portfolio, permitted development finance stands ready to fuel your ambitions.

Expeditiousness: Time reigns supreme in the realm of property development. With development finance for permitted development schemes, accessing funds is often swifter compared to traditional lending channels. This expeditiousness empowers you to kick off your development venture sans unnecessary delays, translating into tangible progress and potential profits.

Viability: Harnessing permitted development rights coupled with tailored finance can potentially amplify the profitability of your development endeavour. Smooth and swift progress through the development lifecycle translates into accelerated returns on investment, underscoring the viability of this financing route.

The Challenges of Development Finance for Permitted Development

Amidst the allure of permitted development loans, it's imperative to acknowledge the accompanying pitfalls and hurdles. Let's delve into the flip side of this financing coin.

Risk Factor: Like all loans, permitted development financing entails inherent risks. A deviation from your development plan could spell repayment challenges down the line. Mitigating risk demands a robust business strategy and contingency measures to navigate unforeseen obstacles.

Cost Considerations: Permitted development loans may entail higher interest rates compared to their traditional counterparts. Calculating the true cost of financing is paramount to gauging the profitability of your development venture.

Eligibility Constraints: Not all projects qualify for permitted development rights, potentially restricting access to this financing avenue. Conducting due diligence to ascertain your project's eligibility is imperative before banking on permitted development finance.

Knowledge empowers decision-making

Armed with insights into both the advantages and challenges of permitted development loans, you're better equipped to chart a course aligned with your development aspirations and financial realities. Stay tuned for deeper dives into the realm of permitted development finance in our upcoming explorations.

Types of Development Finance

When looking for development finance it is important to identify the type of project being planned by the developer in order to access the correct funding product. Types of works can include:

ground up build development finance

Ground up builds

New builds nearly always require development finance loans. Once the project is completed, developers may use development exit finance as a more cost-effective solution, but this cannot be done before the project is watertight.

property conversion or restoration finance

Large scale restoration and property conversions

For this type of project, refurbishment finance is typically the correct type of loan to use, however if the project is larger than the norm, development finance may be a better alternative.

property refurbishment finance

Property refurbishment

A refurbishment loan, which is a type of bridging finance, is generally used for property renovations. It can be used for various improvements including, installing a new roof, general structural changes, building an extension, refurbishment, and decoration.

bridging loan property development

Bridging loan for property development

Property investors or developers may want to buy property which needs development or completion work still doing and are unable to get funding from their bank. This is a typical scenario when a bridging loan is a suitable alternative.

How is Development Finance Repaid?

Development finance loans are typically paid in one of the following three ways:

Paid in full

The total loan amount is paid in full, using the profits, when the project is complete, and the properties have been sold.

refinance with long term loan

Refinancing using a long term loan

This usually happens when the developer wants to keep the development for either personal use or for rental purposes.

development exit finance

Refinancing using a Development Exit Bridging Finance

This type of short term loan is often used to fund a new development project before the current project is sold. It can also be used to give developers a bit of breathing space to complete minor works and find buyers.

Frequently Asked Questions

At developmentfinance.com, we specialise in connecting you with the ideal permitted development funding for your endeavour, with swift decisions and funding within a week of your inquiry. Skip the planning permission hassle; change of use becomes feasible.

If you're eyeing full site refinancing upon completion, count on us to source the optimal financing package for your requirements.

Permitted development (PD) rules allow certain construction, alterations, and changes of use to be carried out in the UK without requiring full planning permission. These rules are set by the government and updated periodically. As of January 2024, there are some proposed changes under consideration, but the key points currently remain:

  • Exemptions for small-scale projects: You can usually build extensions, outbuildings, and other minor changes to your property without planning permission, as long as they meet specific size, height, and location limitations.
  • Prior approval process: For some projects exceeding PD limits, you can seek "prior approval" from your local authority instead of full planning permission. This involves submitting detailed plans and demonstrating compliance with specific regulations.
  • Nationally set rules with local variations: PD rules apply across England, Wales, and Scotland, but specific limitations and restrictions might differ depending on your location, listed building status, or conservation area designation.

Common examples of projects potentially covered by PD in the UK include:

  • Single-story rear extensions: Up to certain size and height limits (typically 3–4 metres) depending on your house type and location.
  • Loft conversions: If they adhere to specific restrictions on roof extension and habitable space increase.
  • Outbuildings and sheds: Limited by size and proximity to boundaries.
  • Change of use: Converting certain buildings, like offices, to residential dwellings under specific conditions.

Even under PD rules, your project can be refused if it doesn't meet specific criteria or contravenes local regulations. This can happen for reasons like:

  • Exceeding PD limits: Size, height, or other limitations are surpassed.
  • Impact on neighbours: The project significantly overshadows or overlooks neighbouring properties.
  • Listed building or conservation area concerns: Development alters the character or appearance of a protected property or area.
  • Prior approval application issues: Your plans lack sufficient detail or fail to comply with necessary regulations.

Remember: It's crucial to thoroughly research PD rules and consult your local planning authority before starting any project. They can advise you on specific limitations, confirm if PD applies, and guide you through the prior approval process if needed.

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