Types of consent
- Full planning permission: detailed approval of the scheme, the usual basis for development finance
- Outline planning permission: approval in principle, with details reserved for later
- Reserved matters approval: approval of the detail following an outline consent; outline plus reserved matters is treated much like full permission
- Prior approval under permitted development: accepted for conversions; see permitted development explained
GOV.UK explains planning permission and the Planning Portal is used to apply.
Conditions and obligations
Lenders review the decision notice and its conditions. Pre-commencement conditions must usually be discharged before work starts, and lenders often want them discharged before the first build release. They also check Section 106 agreements and Community Infrastructure Levy liabilities, which must be in your appraisal.
Planning permission usually expires if development has not begun within a set period, commonly three years. If yours is close to expiry, lenders will want to know how a lawful start will be made in time.
Funding land before planning
Most development lenders will not fund a site without planning. Instead, land is commonly bought with a land bridge or planning gain bridge, with lower loan to value, often around 50% to 60%. The exit is usually a development facility once consent is granted, or a sale with planning. See planning gain and land value.
Refurbishment and smaller works
Not every project needs planning. Many refurbishments, some extensions and certain changes of use fall within permitted development or need no consent at all. Lenders will still want confirmation, sometimes a Lawful Development Certificate, and building regulations approval where structural work is involved.
Planning and your timetable
Planning applications and condition discharges take time, so allow for them in your bridge term and land purchase. Lenders look more favourably on schemes where planning risk has been removed. When your consent is in place, compare development lenders on Instant Quotes.
What lenders review
- The decision notice, including every condition and its trigger point
- The approved drawings, to check they match the scheme being costed
- Any Section 106 agreement, including affordable housing and payments
- The Community Infrastructure Levy liability notice, where CIL applies
- Evidence that pre-commencement conditions have been discharged
- The date by which development must begin
Lenders' solicitors and monitoring surveyors check that what will be built matches what was approved. If they find a mismatch, drawdowns can be held until it is resolved.
Changing the scheme after consent
Small changes can often be approved as a non-material amendment. Larger changes may need a variation of conditions or a fresh application. Either way, the lender will want to approve the change, check it against the appraisal and see the updated consent before funding the altered work. Raise changes early, as they can affect value, cost and programme.
Common questions
Can I get development finance with outline planning?
Rarely for the build. Most lenders need full permission or reserved matters approval, though outline consent can support a land bridge.
Can I get finance to buy land without planning?
Yes, usually through a land or planning gain bridge at lower loan to value, refinanced once consent is granted.
Do conditions need discharging before drawdown?
Pre-commencement conditions usually need discharging before work starts, and lenders often require this before the first build release.
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.
