The Best Legal Advice in Development Finance

Quick but accurate and robust legal advice. Development not going to plan?

Development Finance

Successful development finance transactions rely on speed and can often seem stressful, especially if you are new to this type of finance product. Working with a vast range of lenders, our property lawyers have a reputation for getting the deal done in the time required. As secured lending experts, with a large network of brokers and lenders, we can quickly adapt or determine alternative solutions should they be required.

Our team advises both borrowers and lenders on schemes with Gross Development Value (GDV) of up to £20 million.

What is development finance?

Development finance is used to enable the construction or redevelopment of property or land. It can also be used for refinancing an ongoing development scheme which requires an injection of cash flow, or an alternative lending product with an extended term of repayment.

Whilst Development finance can be applied to all asset classes, many of our cases are residential and commercial – across new build, renovation and conversions. Development finance often has complex lending requirements and needs enhanced due diligence; therefore it is crucial that you have the right team to assist you understanding all legal elements to the deal.

The main difference for this product is that lenders will take the GDV of the property into account when agreeing the loan. Once the development is complete, the loan. Once the development is complete, the loan is usually repaid through the sale of the property or refinance onto a more long-term lending product.

When I benefit from Development Finance?

Development finance can be used for stand-alone projects like single homes. It is also used for ground-up and larger real estate transactions, where there are multiple units being sold once the development is build complete. You may choose to obtain development finance where you are

  • Kick starting a new build development
  • Converting residential, commercial or mixed use properties involving change of use
  • Progressing an ongoing development scheme which requires additional or alternative funding
  • Renovating a buy-to-let property in preparation for the rental market or to sell on to secure a profit

Our team is well connected with a large number of lenders – traditional banks as well as private lenders, which means we understand the different lending requirements and the due diligence needed. This ensures a smooth transaction as we are prepared to handle whatever the client and lender require to see the deal through to completion.

How does Development Finance work?

A development finance loan is a short-term funding option and can range from 6-24 months. A lender will expect to see a clear business plan that details goals and exit strategies.  

Whilst many lenders operate in different ways, a development funding package may involve two aspects.  

  • to support the purchase or refinance of the site for development. This could be to acquire land for a new build development or an existing property for conversion or renovation. If you already own the property, you may need to repay an existing lender who is not willing to fund or continue to fund the development through to completion, in place of the new lender who is willing. This is often referred to as the “Day 1 Loan” as the funds are put in place on the day of completion of the load.
  • to pay for the costs of the development works associated with the project following completion of the Day 1 Loan. This part of the loan is usually drawn down in stages (or tranches) once various development phases are complete. The loan funds must have a clear use; therefore it is likely that each tranche payment will require sign off from the monitoring surveyor before funds can be released to progress with the development works. This part of the loan may also include a smaller fund for contingencies, in the event that the development does not go to plan.

As with all other lending products, we will be provided with the lending documentation from the chosen lender, at which point we will need to review the development facility. We must convey good and marketable title to the chosen lender before funding can be secured.  

For larger scale developments, the lender may require that you and the build team enter into the appropriate construction documentation such as a JCT build contract, professional appointments and collateral warranties. We can assist in drafting this documentation for you and the lender or amending existing construction documentation in line with the lender’s requirements.

You will need to be fully advised on the development facility, security documentation and any construction documentation before the matter proceeds. Any elements of risk to both you and the lender must be considered and mitigated in advance. Development finance is much more high risk than a standard loan, therefore it crucial that the deal is fully understood by all parties involved before funds are released.

If you have any questions about Development Finance or would like more information, please contact us.

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Thank you PLS for an outstanding experience, for the help and support from the beginning of the process. An excellent team!


We have a dedicated team of over 150 staff based in our Liverpool, Manchester and London offices. We are well-connected with a large number of lenders and are able to advise both borrowers and lenders on schemes with a GDV of up to £20m.

Let us help you to secure the development finance for your project. By working closely with a vast range of brokers and lenders, we can help you to enable the construction or redevelopment of your property, or to re-finance your ongoing development.