1. Find the site and test the numbers
Before you commit to a site, build a first appraisal: likely GDV from comparable evidence, build costs, professional fees, finance costs, contingency and your target profit. Working back from GDV gives the most you can pay for the land; see residual land value explained. Check the planning position and any constraints that add cost, such as biodiversity net gain or nutrient neutrality; see biodiversity net gain and nutrient neutrality.
2. Secure the site
Negotiate the price and terms. A conditional contract or an option can give you time to secure planning and finance before committing. If you need to buy before planning, a land or planning gain bridge can fund it, refinanced onto development finance later; see land finance and planning gain and land value.
3. Prepare the lender pack
- Full development appraisal and cash flow
- Planning permission, conditions and any section 106 or CIL obligations
- Drawings, specification and a cost plan or contractor's quote
- Build programme and procurement route
- Professional team: architect, quantity surveyor, structural engineer, project manager
- Your CV of previous projects, and those of your contractor and partners
- GDV evidence: comparable sales and agents' opinions
- Exit plan: sales strategy or refinance route
- Company structure, assets and liabilities, and source of your equity
A complete pack is the single biggest factor in how quickly lenders respond. See what development lenders look for.
4. Compare lenders and get indicative terms
Lenders differ on leverage, pricing, experience requirements, scheme size and property type. Start on Instant Quotes to see lenders whose published criteria fit, then apply online. We present your case to the lenders you agree and return indicative terms, which set out the facility, rates, fees and key conditions. Weigh the total cost and your cash requirement, not only the rate; see ROCE and the true cost of development finance.
5. Decision in principle and fees
Once you choose a lender, it carries out an initial review and issues a decision in principle or term sheet, subject to valuation, the cost report, legal due diligence and credit approval. You usually pay for the valuation and the initial monitoring report at this point. See decision in principle explained.
6. Valuation and the cost consultant report
The lender instructs a RICS registered valuer to report on the site value and the GDV, and a monitoring surveyor or quantity surveyor to review the build costs, programme, contract and team. Either report can change the facility. A lower GDV or a higher cost estimate can reduce the loan, so leave headroom in your appraisal.
7. Credit approval and offer
The lender's credit committee reviews the reports and the case. It may approve on the indicative terms, approve with changes, such as a lower facility or extra conditions, or decline. If terms change, compare them again before accepting. The formal facility letter follows approval.
8. Legal work and completion
Your solicitor and the lender's solicitor deal with title, the charge, any debenture and personal guarantees, the building contract, collateral warranties, insurances and conditions precedent. Allow several weeks. Instructing an experienced development solicitor early helps; see personal guarantees explained. At completion, the day-one advance is released.
9. Build and drawdowns
Build money is released in arrears, usually monthly, after the monitoring surveyor confirms the work done. Overruns are normally funded by you before further releases. See how drawdowns work and what a monitoring surveyor does.
10. Practical completion and exit
At practical completion, building control sign-off and warranties are issued and units are sold or the scheme is refinanced. If sales are slower than the remaining term allows, a development exit loan can repay the facility and give more time.
Typical timescales
- Indicative terms: often within days of a complete pack
- Decision in principle: commonly within one to two weeks of choosing a lender
- Valuation and cost report: commonly two to four weeks from instruction
- Credit approval to completion: commonly two to six weeks, depending on legal complexity
These are typical ranges, not promises. Incomplete information, title issues and planning conditions are the usual causes of delay.
Common questions
How long does development finance take?
Many cases complete within around 6 to 12 weeks of a complete application. Larger or more complex schemes, or those with legal or planning issues, take longer.
What happens at credit committee?
The lender reviews the valuation, cost report and case, then approves, approves with changes or declines. Terms can change at this stage.
What if the valuer reports a lower GDV?
The facility may reduce, because lenders size the loan against GDV. You can provide further comparable evidence, put in more equity or restructure the funding.
Can I use the same solicitor as the lender?
Some development lenders allow dual representation on smaller cases, but most require separate solicitors. Ask before instructing.
What happens if units are unsold when the facility expires?
Talk to the lender early. Options include an extension, a development exit loan or a refinance onto investment finance for the unsold units.
This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.
