Development exit finance repays your development facility once the build is complete, replacing it with cheaper short-term funding while you sell or refinance. Switched at the right moment, it cuts the cost of a scheme's final months and removes the pressure of a development loan running out of term.
We arrange development exit finance across a panel of 135+ lenders, timed around your build programme rather than bolted on at the end.
Key facts
- What it is: a bridging loan in all but name — it repays the development facility and buys time to sell or refinance.
- Why switch: development finance is expensive money, and most facilities allow little or no time for the exit. Moving across should save money through the sale or refinance period.
- Loan to value: typically around 70%. Where the agreed exit is a sale, lenders may stretch to 75% or slightly beyond; where you plan to refinance onto buy-to-let, expect 65%–70% so the onward mortgage fits.
- Interest: almost always retained or rolled up — no monthly payments. Serviced interest exists, but few lenders offer it and affordability must be evidenced.
- Speed: two to three weeks is achievable under pressure; four to five weeks is the comfortable norm.
- Early repayment: most products carry no penalty, and unused retained interest is refunded when you repay early.
When to switch — and when to start arranging it
The case for switching rests on two questions: how much time is left on your development facility, and whether your lender built in any allowance for the exit. If the agreed exit was always a sale, the development lender may insist you move across once the scheme completes. If the plan was to retain and refinance onto a buy-to-let mortgage, some lenders allow a margin for that — but more often than not there is no spare time at the end, and the saving from switching is substantial.
Timing matters more than most borrowers expect. Raise the exit with your broker early in the build — indicative terms can be obtained well in advance — and treat the three-to-four-month mark before practical completion as the point to formalise terms and open the process properly. The wrong approach is to drive the last nail and ask for an exit the following week: the product completes at bridging speed, but valuations, legals and your own review of terms all need room.
Where a scheme has multiple units, the loan reduces proportionately as you sell. On a four-house site worth £1 million carrying £500,000 of debt — 50% loan to value — selling the first house at £250,000 repays £125,000 of the facility. That structure lets you sell in an orderly way and hold out for full value, rather than discounting to clear a development loan against a deadline.
Who it's for
Any developer with a completed scheme can use development exit finance — that is its sole purpose, and the criteria mirror standard bridging. The property must be finished, and the valuation must support the loan you need: in most cases the exit facility sits close to the original development loan, unless the market has moved materially.
It is not a tool for part-built schemes. If a project has stalled short of completion and needs further funding, the right instruments are mezzanine finance or a capital raise against other assets.
Costs and fees
The cost profile is close to a standard bridging loan. The exit lender will almost certainly be a different institution from your development lender, so allow for:
- A new valuation fee. A fresh valuation is required in nearly every case. The rare exception is an exit product from your existing development lender, who may switch the facility without a full revaluation — though even then, expect an inspection to confirm the scheme is finished and meets the expected value.
- New legal fees for the new charge.
- An arrangement fee to the new lender, plus a broker fee — the same fee categories that apply across buy-to-let and residential transactions.
Pricing should sit comfortably below the development loan it replaces — that saving is the point of the product. Monthly rates start from around 0.5% for stronger cases and rise with leverage: the scheme's use, location, value and the loan to value you need all move the price, particularly where cost overruns have pushed borrowing higher against the end value. Rates move with the market, so we quote against your actual case.
Maximum borrowing is driven by loan to value, not rental income. If the plan is to retain the units, we run buy-to-let rental calculations alongside the exit facility, so you can see that the onward mortgage covers the bridge before you commit.
The process
- Timeline review. Early in the build, we map your completion date and intended exit — sale, refinance or a mix.
- Indicative terms. We obtain outline terms in advance, so you know the shape of the facility before you need it.
- Formalise. Around three to four months from completion, we firm up terms and open the application.
- Valuation and legals. The lender values the finished scheme; legal work runs in parallel.
- Completion. The exit facility repays the development loan, and you sell or refinance on your own timetable.
The information requirement is the standard package — identification, proof of address, bank statements and a credit report — plus the valuation on the property itself.
Frequently asked questions
How much can I borrow with development exit finance?
Usually around 70% loan to value, with some flexibility. A sale exit can support 75% or slightly more, because the lender is not constrained by what an onward buy-to-let mortgage will refinance. A refinance exit is generally held to 65%–70% so the buy-to-let loan can cover the bridge.
Do I have to make monthly payments?
Almost never. Interest is retained or rolled up, depending on the lender's preference. A small number of lenders allow serviced interest where affordability is demonstrated, but it adds complexity most borrowers avoid.
What happens if I repay the loan early?
Most development exit products are bridging loans without early repayment penalties. Lenders retain six or twelve months' interest upfront depending on the term, and you pay only for what you use — repay early and the unused interest is refunded.
What if my development isn't finished?
Development exit finance is for completed schemes only. If you need to borrow against a part-complete project, the conversation moves to mezzanine finance or capital raising on other assets instead.
Should I use a broker or go directly to a lender?
Some lenders accept direct applications. For anything beyond a standard high-street mortgage, though, a broker sees the whole market — terms, lender appetite and the scope to negotiate — and shapes the facility around your exit rather than one lender's product sheet.
Listen to the episode
Scott West discusses development exit finance in more depth on the Propertyze podcast.
Talk to an adviser
Tell us your completion date, the scheme and your intended exit, and we'll set out the right way to fund the final stretch. Call 020 7126 8574 or request a call back — we aim to reply within one working day.
Your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it. Development exit finance on investment property is generally not regulated by the Financial Conduct Authority.
Propertyze is a trading style of City Finance Brokers Ltd, authorised and regulated by the Financial Conduct Authority, FCA No. 766295.
To put numbers to your own exit, use our bridging loan calculator — it estimates interest, fees, net advance and LTV.
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