Development finance funds a ground-up project in stages: an advance against the land on day one, then build costs released in arrears as each phase completes. First-time developers can and do get funded — what lenders underwrite is the scheme and the professional team delivering it, not just the name on the application.
We arrange first-project development finance across 135+ lenders, packaging the case so an underwriter sees realistic costings, a deliverable plan and a viable exit.
Key facts
- What it is: staged, short-term finance for building property from the ground up, repaid by sale or refinance once the scheme completes.
- Day-one advance: typically around 60–65% of land value on day one, with 100% of build costs funded in arrears against a schedule of works — indicative figures; terms depend on the lender and the case.
- The GDV anchor: a valuer estimates the Gross Development Value — what the finished scheme will be worth — and the lender caps the facility against it.
- The team counts: lenders assess the professional team — builder, architect, costings — alongside your own experience, not instead of it.
- Contingency: allow at least 10–15% of total project cost for overruns and price movement.
- Exit: a sale or refinance the lender can see working from the outset, with enough profit to make the scheme viable.
How development finance works for a first project
Ground-up development is more than laying bricks: foundations, infrastructure, utilities and sequencing all sit inside the budget, and a lender expects the borrower to understand what is involved before any money is advanced.
The funding follows the build. An advance against the land buys the site; build costs are drawn down in stages, in arrears, as work is evidenced against the schedule of works. The valuer's GDV figure caps the total facility and frames the exit — the lender needs to see how the finance is repaid, sale or refinance, and that the route is viable.
Lenders assess the professional team, not just your CV
Few first-time developers arrive with no relevant background. Most have worked on construction sites, have family in the trade, or come from architecture or design. Lenders weigh that experience — but they also weigh the team around you: a builder who can produce a detailed schedule of works and credible cost estimates, planning documents in order, and an honest account of who delivers what.
The other half of credibility is scale. A first scheme should be a manageable size that aligns with your experience; overly ambitious projects cost more and are harder to place. Start small, complete well, and lenders become markedly more willing on the next, larger scheme.
Who it's for
Development finance splits into residential and commercial — houses and flats on one side; offices, hotels, warehousing and other non-residential property on the other. The application process is similar, but the lender pool, rates and costs differ. It also matters whether you are starting from a clear site or working with an existing structure to refurbish or demolish — that changes the whole cost profile.
A typical first case: a client with a site at the end of his garden split the titles and built two houses. He had been a builder for most of his working life, his numbers were logical and his business plan was sound; the exit was a refinance, keeping both houses as buy-to-lets. A straightforward project, sized correctly, delivered by a team the lender could believe in.
What it costs
Development finance is priced differently from a term mortgage, and comparing the two headline rates is the wrong test. Annual rates on development facilities sit well above mainstream mortgage pricing by design — the cost is built into your appraisal and profit margin from day one. Rates move with the market — we quote against your actual case.
The discipline that protects the numbers is the contingency: at least 10–15% of total project cost, held against errors and price movement. If the appraisal only works without a contingency, the scheme is not ready to fund.
The process
- Plan and costings. Your builder produces a detailed schedule of works and cost estimates; you set the contingency and confirm the exit.
- Packaging. We assemble the planning permission documents, drawings, architects' images, builder details and costings, alongside a clear narrative of your experience.
- Underwriting. The lender's underwriter will usually speak with you directly. Be straightforward — a story that does not match the file only slows things down.
- Valuation. A valuer attends the site and estimates the GDV, which caps the lending and frames the exit.
- Offer and drawdown. The facility completes, the land advance is released, and build funds follow in arrears as each stage is evidenced.
- Exit. The scheme sells or refinances, and the facility is repaid.
Frequently asked questions
Can I get development finance with no track record?
Usually, yes — provided the scheme is sized sensibly and the professional team is credible. Lenders assess the whole delivery team, so a strong builder, sound costings and relevant adjacent experience (site work, the trades, architecture or design) carry real weight on a first application.
How much can I borrow on day one?
Typically around 60–65% of the land value on day one, with 100% of build costs funded in arrears — indicative figures, with the total facility capped against the GDV. Structure depends on the lender and the strength of the case.
What does a lender need to see?
Planning permission documents, drawings and architects' images, builder details, a schedule of works with cost estimates, and a viable exit. The lender also wants a truthful account of your experience — the underwriting call should confirm the file, not contradict it.
What size project should a first-time developer start with?
One that matches your experience. A manageable first scheme — completed on time and on budget — does more for your access to lenders than an ambitious one that struggles. Track record compounds: each completed project widens the lender pool for the next.
What are the main risks, and how are they managed?
The biggest is overspending mid-project — upgrading specifications halfway through erodes the margin the lender approved. Set a budget and a plan, hold to both, and keep a contingency of at least 10–15% of total project cost. This is an investment project, not your own home.
Listen to the episode
Scott West discusses first-time developer finance in more depth on the Propertyze podcast.
Talk to an adviser
Tell us about the site, the planning position and your build plan, and we'll set out how a lender will see it — and what to strengthen before submission. 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. Most development finance is not regulated by the Financial Conduct Authority.
To put numbers to your own scheme, use our development finance (GDV) calculator.
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