Residential Development Loans


Residential Development Loans are offered and provided by banks, financiers and specialist lenders that allow for the purchase of land or a property followed by the financing of construction and associated costs to develop and later sell a property for residential use. These kinds of properties are ones that will always be in demand, so seeking out residential development loans can help you maximise scheme development options without using your own capital.


These types of loans can be used on any residential property within the UK but will be solely restricted to the development of these types of properties. This is different to property development loans or property development funding which can be applied and used with both residential and commercial properties. If you are looking purely towards developing and then selling a property, then a residential development loan is the most appropriate option.


Residential development loans are available to property developers with little experience as well as developers who have worked in the industry and have gathered a proven track record and portfolio. To discover your residential development options, get in touch with UK Development Finance today by filling out our online form, sending us an email, or discussing with one of our experienced and dedicated customers service advisors.


Why You Need a Residential Development Loan


A residential development loan allows you to borrow the funds to purchase the land or property without requiring you to dip into your own savings or existing funds to see the project through to completion. Doing this gives you the opportunity to free up your own cash and help fund more projects than if you used your own money.


This method of obtaining funding is even used by experienced property developers who elect to use the loan above their own cash earned from previous successful projects. The idea is that it is merely another cost that would typically be paid towards builders, landscapers and other tradesmen out of their own pocket. Furthermore, it reduces the risk of running out of funds halfway through the project which can have ruinous consequences when it comes to wanting to obtain greater funding in order to complete the project.


Deciding to request and apply for a loan will demonstrate fiscal responsibility to the lender and give them more confidence in your project as it will mitigate issues regarding lack of funds. Those who elect to forego a loan in favour of using their own capital to fund projects run the risk of finding themselves without the appropriate funds and will result in lenders being unwilling to provide them with the necessary loan to complete the project as it demonstrates poor management. While it is not impossible to obtain loans in these circumstances, it greatly reduces the chance of receiving additional funding and so seeking out a residential development loan beforehand is the best course of action.


These loans will help avoid financial difficulties and while you can never fully anticipate unforeseen circumstances that could affect or interfere with the project, you will at least have done your best to avoid problems.


In most cases, lenders will understand that there will be cost overruns due to unexpected problems and in these instances, additional funding can be provided to assist in completion. This is something that needs to be organised beforehand in the original loan agreement.




There are many benefits to taking out a residential development loan which can provide you with the best chances for a successful project and help you with future projects as well. Both you and the lender can feel confident in having the funding being taken care of at the beginning of the project without needing to worry about requesting funds later on. This gives you the best possible start to the project and promotes trust between the two parties.


To make this even more effective, the lender will work with you to agree upon the amount required and arrange for organised drawdowns of specified amounts that can be accessed at key stages of the process to prevent spending too much on certain areas. Typically, these stages include site purchase, roof completion, first second fixes as well as final completion but there are other stages in between that can be considered.


If you find yourself ahead of schedule or proceeding more effectively than anticipated then it might be possible to discuss with your lender to drawdown funds on a different basis as long as you receive and provide a surveyors report of the project. To do this, you must suggest and agree to it with the lender before the project begins.


How To Get Started


After identifying your suitable residential project, you will need to organise an appraisal that will outline the costs that will be required for the development. This is crucial towards demonstrating your professionalism to the lender and allow them to understand your plans. The costs involved can range from land and its purchase, professional fees (builders, landscapers, etc.) as well as building warranties and CIL payments to the local authority.


Upon finalisation of this, UK Development Finance will approach the many lenders that we work with to find a suitable loan for your project. We work with nearly all UK lenders and so have no doubt of being able to find the best deal for you. We will also be able to tell you immediately if you will be accepted for a loan and inform you of expected interest rates to further give you peace of mind.


To ensure the best results, we will also go through your appraisal to identify potential issues and correct them before submitting to the lender which will help provide you with the best rates possible.


What Next?


Following the acceptance of your application for a residential development loan, UK Development Finance will be here to help guide you through the rest of the process. This will include working with the lender or their solicitors on your behalf to ensure that the process is as straightforward and comfortable as possible.


At UK Development Finance, we have over 20 years of experience and are dedicated to providing you with the best service to undertake your residential development projects. If you are either inexperienced or a developer with a proven track record, get in touch with us today by filling out our online form, sending an email or having a chat with one of our customer service advisors to find out your options now.

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Top 10 Finance Ltd Rex House, 4-12 Regent Street, London, SW1Y 4PE
Consumer Credit License Number CCL 657619/1 FCA Regulated
We are registered and comply with the Data Protection Act (1998). Registration No: Z2861884 Company  registered in England number 06261373

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