Development finance is aimed at property developers and landowners looking to obtain funding for new build properties or the redevelopment of an existing property, such as conversions and structural renovation projects.
This type of development is completed on a commercial basis and the completed property is generally not for owner occupation. Loans can be obtained for both the purchase of the land, and also for the cost of the build or renovation work itself.
Funding is typically provided on a drawdown basis, with additional monies released following completion of each stage of the building process. Valuations may need to be done prior to each drawdown to check on the progress of the build and to ensure the lender has adequate security for the loan.
Development finance is designed to be a short-term lending option while the build is being completed. Due to this, development loans tend to be offered on an interest-only basis and do not require monthly repayments to be made unless you want to. Once the build is finished you will then be able to take out a standard commercial mortgage if needed, to pay off the development loan.