Land Bridging Loan

Funding for land with or without planning — how lenders assess it, what it costs, and how it differs from development finance.

Bridging finance is one of the few reliable ways to buy land at the speed a good site demands — with or without planning permission. Planning status sets the terms: lenders will typically advance up to 65% loan-to-value where consent is in place, and around 50% where it is not.

Land bridging at a glance

Land with planning: most lenders will go to 60% loan-to-value, with 65% possible on stronger cases.
Land without planning: expect a cap of around 50% loan-to-value. The lender pool is smaller, but the market is well established.
Loan size: no practical ceiling. We have seen consented sites bought at £30 million with bridging at 60% loan-to-value — the constraint is the loan-to-value, not the figure.
Speed: completion in as little as two weeks, with four weeks comfortably achievable.
Interest: usually rolled up into the loan, so there is nothing to service monthly during the term.

How a land bridging loan works

The mechanics mirror any other bridge: a short-term, interest-rolled loan secured against the asset, repaid through a defined exit. What changes with land is the lending appetite. Fewer lenders operate in this space, valuations are more conservative, and loan-to-values sit a step below those available on built property.

Lenders divide land into two categories. Land with planning carries permission to develop, and its value — and the lending against it — reflects that consent. Land without planning is priced on what it is today, with the upside treated as speculation; that is why the loan-to-value is capped at around 50% with virtually every lender.

The long-term plan drives the structure from day one. If the site already has consent, it will become a development at some point. If it does not, the likely path is securing permission and either selling on or building out. Understanding which of these applies is central to choosing the right lender.

Land bridging or development finance?

The two are often conflated, and the distinction matters. A land bridge funds the purchase of the site. Development finance funds the build, drawn in stages against works as they complete. A bridge gets you the land quickly; once planning is granted and you are ready to break ground, the bridge is refinanced onto a development facility.

Where a build is the end goal, we will often place the bridge with a lender that operates both a bridging and a development arm, so the loan can move across at the appropriate stage without a change of lender.

Who uses a land bridge

Three borrower profiles come up most often. Investors buying unconsented land to pursue planning gain — securing permission to increase the value, then selling on or building out. Developers moving on a consented site that will not wait for a development facility to be arranged. And buyers acquiring plots at auction, where the completion deadline rules out slower funding routes.

In every case, speed is usually the deciding factor: the bridge secures the site while the longer-term plan catches up.

What it costs

Rates move with the market and price to the individual deal — we quote against your actual case rather than a headline figure. The structural costs, though, are consistent:

Arrangement fee: typically around 2% of the loan balance.
Valuation: scales with the size of the site. On land without planning, budget a couple of thousand pounds.
Legals: light by bridging standards — around £1,000 for your own representation plus £1,000 for the lender's is a sensible budget.
Interest: normally rolled up into the loan rather than serviced monthly, so it is settled at exit.

The process

Underwriting follows the same shape as any bridging application; what changes is the lender selection, which turns on where the land is, what it is worth and what you intend to do with it. We assess the deal with you, gather the supporting information, package the case for the right lender and manage it through to completion.

Two weeks is achievable where the case demands it, though we would ordinarily ask for four. Genuinely urgent timescales can be met, but some lenders charge more for them — a cost worth weighing against what the speed actually buys you.

Frequently asked questions

Can I get a bridging loan on land without planning permission?

Yes — though many assume otherwise. The lender pool is smaller and the loan-to-value caps at around 50%, but it is a well-trodden route for buyers pursuing planning gain. The lender will want to understand the plan for the site, because the plan is the exit.

How much can I borrow against land?

There is no real monetary cap — only the loan-to-value. On land without planning that means around 50% of value; with planning, 60% and possibly 65%. With a large enough site, very large loans are entirely workable.

What exit strategy will a lender accept?

Two exits dominate: sale of the site once planning is secured, or refinance onto development finance to build it out yourself. If you intend to develop, the structure can accommodate selling the completed units, retaining some, or retaining the lot — the exit is built around your objectives, and we help you structure both the bridge and what follows it.

Am I eligible for a land bridging loan?

If you have a UK credit footprint and a credible plan for the land, you are probably eligible. The underwriting mindset is the same as any bridge — the lender is lending against the asset and the exit, not a payslip.

What should I have in place before buying land speculatively?

Understand the costs before you commit — pursuing planning can be expensive. Engage an architect and builders early, and speak to the local planning office to form a realistic view of the permission you are likely to get. If the land already has consent, the same discipline applies to build costs, timescales and your long-term intentions: deciding mid-build to live in the property, or to sell it, can change the structure of the loans. Being well researched before you start makes a measurable difference.

Listen to the episode

Your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it. Most bridging loans on investment property are not regulated by the Financial Conduct Authority.

To put numbers to your own scenario, use our bridging loan calculator — it estimates interest, fees, net advance and LTV.

Bridging loans · Development finance · Case study: smart land finance

Full transcript — “Land Bridging Loan”

Recorded June 2024. A conversation with Scott West of Propertyze, transcribed in full. 7 minutes · approximately 1,473 words.

Read the transcript

Hello, and on this episode of the Bridging Finance podcast, we have Scott West joining us from Propertyze to talk all about bridging loans for land purchases. It's great to chat with you again, Scott. How's it all going? Yeah, great. Thank you. Looking forward to this one. We do get quite a few inquiries on this. Okay. Well, let's get straight into the questions we've got, Ben. So first of all, can you get a bridging loan for land? How does it work? Yes, you can. It's the short answer. A lot of people think you can't. You absolutely can. The difference is the lender values and the lender choice. There's a lot fewer lenders that will lend to you on land. And the loan to values are quite a bit lower

than you'd expect versus your properties. So with land, this lumps into two categories, land with planning and land without planning. As you guess, one with planning is you already have planning permission to develop something on it. Those are the short ones. We can typically get 60 or even 65% loan to value on those. If a land has no planning and it's just a plot of land, it's going to be capped at 50% loan to value with virtually every lender I can think of, but we still can lend against it. Okay. So that's a good news there and interesting as well. You talked a little bit there about how it works, but how do I know if I'm eligible for one? How do I know if I can get one of these? Speak to us is the quickest answer, but how they work really is virtually the same

process and underwriting kind of mindset as you have with any standard bridging. Obviously the lender choice changes. So we do need to be mindful of what the long-term plans are. If it has planning already, clearly it's going to be to switch to a development land at some point. If it's land without planning, most likely to obtain planning. So once the planning is granted, then to switch to a development land. But understanding what the plans are for that land is vital. And to know you're eligible really, as long as you've got a credit port, a credit footprint in the UK and a plan, you're probably eligible for it. Okay. There we go. Now, why use bridging finance for land purchases? It might be a

little bit obvious. You've already explained it a little bit, but are there different reasons? There are. I mean, it's fairly obvious based on the last answer really. If you're buying the land with the bridging land, it's probably you're buying it without planning and you're speculating on obtaining planning. So to increase the value with the planning permission granted, which can then mean one of two things. Either you would intend to sell that land and just make the profit or you've obtained the planning and now you want to switch to a development land because you want to develop that property yourself. That's the first option. If the land already has planning, you're probably buying it with

the bridging land to secure that quickly. In which case we would use a lender that has both a development and a bridging arm so we could move the bridge into development at a later stage for you anyway. But speed is most likely the key reason people would use the bridge. Right. Okay. Now moving on, we get the borrowing question, of course, on every episode, Scott, but how much can you borrow for a bridging loan on land or for land? So yeah, if it's land without planning, it's 50% land to value. If it's land with planning, 60% at a push, 65%. In terms of monetary value, there isn't bringing up a limit. I have seen the land for as much as 25 or even 30 million pounds land with planning have bridging loans against it for 60%.

It can do very large loans if you have a big enough plot of land. There's no real cap on the amount of borrowing, just the loan's values. Okay. Brilliant. Now what other costs are involved with a land bridging loan then? As you'd expect, there will be a valuation fee depending on the size of the land, depending on what. If it does not have planning yet, the valuation fee probably costs you a couple of thousand pounds. Legal costs, they'll be very little to do with the legal, but again, probably budget for around a thousand pounds for yourself and a thousand pounds for the lender. So a couple of grand there. And the lender's fees, obviously their interest is rolled up and the lender will probably charge around 2%

arrangement fee on their loan balance. But otherwise, not a lot more to do. Other than that. Okay, which is good news, but some costs to consider there. Now, how difficult is it to get a bridging loan for land? How do I get one? And I'm guessing, Scott, this is where a broker like Propertyze can come in and help. It's exactly where we come in. Very easy to get if you know where to go, which is obviously, we'll help you with that part. Knowing where to lend is the go-to. Depending on where the land is, depending on what the plans are for it, depending on this value, it will make a difference to who we go to, but it's straightforward. It's very straightforward for us. We've packaged the deal for you.

We'll gather all the information we need, package it for the lender, and ensure that we get a smooth process through. Okay, there we go. Now, how long does this take and how quickly can I complete people would like to know? Very similar again to the standard kind of bridging routes. We can do them as quickly as two weeks. Typically, I'd say give us four weeks at a bad minimum. But anyway, between four or five weeks, it is easily achievable. Obviously, if you need it faster, we can achieve it faster. But if timescales are really urgent, then some lenders will charge more for those timescales. But as quickly as you need it to be done, I guess, is the short answer. Okay, so that's useful to know there.

This is interesting as well and important. So what exit strategy should I use? It is really unique to the client's circumstances and their objectives. If they are solely planning to obtain planning and sell it, in the case of land without planning at the purchase point, then sale of the property is your extra strategy. If you're planning to develop that land out, then we'll help you with that. So it might be that you develop the properties up and sell them, or you want to retain a couple off the back, or you want to retain the entire lot. Depending on what your scenario is, we'll help you structure the development loan and the development exit at the back end as well. It really does depend on what the objectives

are long-term goals for the client. But we can facilitate any combination of the need. Okay, well, hopefully that's reassuring to hear there. It all depends on the individual and their circumstances. Now, you've demonstrated there how a broker can help. Is there anything else we need to know here? I think just being mindful, if you are buying land and speculating on obtaining planning, really understanding upfront what costs are involved with that process, because it can be costly, make sure you've engaged an architect and to build us upfront, and have some conversations with your local planning office as well. It makes, you know, have a good understanding of what likelihood there is of getting the planning that you want.

If you already have land with planning, looking to buy land with planning, those same conversations again, make sure you really understand the build costs, the time to build, and have a real solid understanding of what you want to achieve long-term. Because I see a lot of clients halfway through a build decide they want to live in it, or halfway through a build decide they want to sell it. And that can change the structure of the loans. So being well-informed and well-researched before you start will make a big difference to the process. Okay, well, some top tips there. Definitely some things to consider and take away from the episode. So thank you for that, Scott. Hopefully we've helped a few people out on the episode

and I'm sure we'll speak to you again soon. Fantastic. Look forward to it. Thank you very much.

This is a transcript of a spoken conversation recorded in June 2024, published as recorded and lightly corrected for names and technical terms only. It is general information about how this type of lending works, not advice on your circumstances. This recording is more than eighteen months old. Any rates, fees, loan-to-values or criteria mentioned reflect the market as it stood when this was recorded and are not current pricing and not an offer of finance — for today’s figures, speak to an adviser.

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