Posted September 9, 2021

How to Finance Property Development in 2021


Understandably, the property market has had a fair few ups and downs over the past year. Strict lockdown measures brought property sales and purchases to a halt earlier in 2020, but thanks to lockdown easing and stamp duty holidays, the sector has seen a boost in recent months.

Fast forward to the present day and property prices are buoyant, as demand from buyers remains at a high with a short supply of properties to choose from. This can present a significant opportunity for property developers and investors.

To facilitate a successful project, finding the right property development finance is vital. There are a range of finance options out there to suit your requirements and timescales, so we’ve listed some below:

Refurbishment Bridging Loans

Improvements to existing developments would be best suited to what’s called a Refurbishment Bridging Loan. These types of bridging loans can be used to fund small developments or large-scale refurbishment projects.

This type of loan ranges from covering the cost of a simple refurbishment, such as kitchen or bathroom refits and electrical work (light refurbishment) to developments that require planning permission, such as extensions (heavy refurbishment).

Ground-Up Loans

For larger developments, we can help you find a loan that can cover up to 100% of build costs and, potentially, any additional funding towards the initial purchase. These are called ground-up development loans and are suitable for those who have purchased, or are looking to purchase, a piece of land for development.

This type of loan is usually suitable and sweet spot for those looking to purchase a site with planning for 1-100 units. The amount of loan is usually awarded based on experience, location, and cost of works.

Property Development Finance

In general, all property development finance tends to be a short-term funding solution. This allows developers sufficient time to complete the construction stage of the project and then arrange an exit strategy, whether that’s via a sale or refinance to pay off any development loans in place.

Overcoming Hurdles

What other expenses should you consider?

You also need to be aware of the extra expenses when it comes to financing property development. Your loans are not only subjected to interest rates, but there are also different fees depending on the amount borrowed and the term of the loan.

Depending on which option you choose, you may be expected to pay the loan back in full after the property is sold or pay in small instalments in a pre-agreed timeframe.

How do you apply for development finance?

The easiest and most effective way to apply for development finance is through an experienced specialist broker. At Finance 4 Business, we have extensive in-depth knowledge within the development finance market, as well as strong relationships with a raft of bridging and development finance lenders.

One of our knowledgeable financial advisers will guide you through every step of the process, helping you to avoid many of the financial pitfalls that new developers can often encounter.

We’re ready to support any client, experienced or not, in financing for their next development project. For advice, do not hesitate to get in touch with our development team today by calling us on 0121 309 0444 or emailing us at