Development finance

Commercial to Residential Conversion Finance

Acquisition and conversion funding for offices, retail units, pubs, warehouses and mixed-use buildings being repurposed into housing or flats. Whether under permitted development or full planning, we structure the facility around the actual scope of works.

The product

Funding the repurposing of commercial property into housing

Commercial-to-residential conversion is the structural play behind much of the UK's residential development pipeline since 2013. The asset is typically tired office stock, surplus retail, redundant pubs or industrial sheds bought on a commercial yield basis and exited on a residential GDV - which is where the developer margin comes from. The conversion itself sits between a heavy refurbishment and a full ground-up build, and the funding has to flex with that scope.

Doulton arranges senior debt from £250k to £100m, sized on Loan-to-Gross-Development-Value (LTGDV) up to 65% and Loan-to-Cost (LTC) up to 80-85%. The day-one tranche covers the purchase and survey costs. Construction drawdowns are released monthly against the monitoring surveyor's valuation. For developers stretching equity across two or three live sites, mezzanine or stretched-senior pushes total leverage to 90% LTC.

Conversion lenders are a different panel from pure ground-up. Octopus, Atelier, LendInvest, Hampshire Trust, Shawbrook, United Trust Bank, Fiduciam and the senior debt funds are active, with terms hinging on prior approval or planning status, asset location, contractor strength and developer track record. Rates from 0.55% per month, arrangement fees 1.5-2%, exit fees 1-2%.

Get a Quote Call 0204 6211776

£250k - £100m

Loan range

65% LTGDV

Senior debt

85% LTC

Standard senior

0.55% pm

Rates from

Why Doulton

What makes this work in practice

PD and full planning routes covered

Whether the consent comes from a Class MA prior approval or a full planning consent, we know which lenders sit comfortably on each route. Misplacing a PD case with a planning-led lender (or vice versa) burns 2-3 weeks of process.

Office-to-resi specialism

Office conversions remain the largest single PD asset class. We have placed dozens of office-to-resi facilities and understand lender quirks on daylight reports, mechanical removal costs and split-floor staging.

Pub, retail and industrial repurposing

Class MA covers most former pubs, retail and light industrial premises within the floor-space cap. We position cases that fall under or over the cap against the right lender from the outset.

Mixed-use schemes

Where the ground floor stays commercial and the upper floors convert, lender appetite tightens. Senior development funds with mixed-use desks - rather than pure resi developers - take these in their stride.

Monitoring surveyor and QS coordination

We instruct the monitoring surveyor and review the initial cost report so the lender's monthly drawdown cycle starts on a clean baseline. Drawdowns released in 5-10 working days on a properly packaged scheme.

Exit funded by the same broker

Most conversions exit through unit sales or refinance onto BTL portfolio or term loans. Doulton arranges the exit alongside the development facility so the full life of the deal is priced from day one.

The process

How it works

Scope and feasibility

We review consent status (PD or planning), scope of works, build cost plan and GDV. Indicative terms back from three to five lenders within 48 hours.

Lender selection

Best-fit lender chosen with you. Heads of terms issued, valuation and monitoring surveyor instructed.

Legals and completion

Solicitors run security, planning and title work in parallel. Day-one tranche drawn at completion. Construction tranche ready to release.

Drawdowns and exit

Monthly drawdowns through to PC. Development exit bridge or BTL refinance arranged by Doulton settles the facility on time.

Get conversion finance terms within 48 hours

Send us the consent status, scope of works and GDV. We will come back with indicative leverage, rate and structure from the right slice of the development panel.

Get a Quote Call 0204 6211776

FAQs

Frequently asked questions

What is development finance?

Development finance funds the construction, conversion or major refurbishment of property. Lenders advance money in stages ('drawdowns') as works progress, verified by a quantity surveyor or monitoring surveyor. Total cost facilities are typical: day-one land advance plus a build facility.

How much can I borrow on a development project?

We arrange development funding from £125k to £300m+. Typical sizing is up to 65-70% of gross development value (GDV) and up to 90% of total project cost, with the balance funded by your equity or mezzanine finance.

Do I need prior development experience?

Experienced developers get the widest lender access and sharpest pricing. First-time developers can still secure funding, usually via specialist lenders, with a capable main contractor and a smaller initial scheme. We have a dedicated route for first-time developers.

What about planning permission?

Most lenders require detailed planning to be in place before drawdown of build funds. Land loans with planning gain exits, outline-only sites and permitted-development conversions can also be funded, but terms and LTVs reflect the higher planning risk.

How is interest charged on development finance?

Interest is almost always rolled up and repaid on exit from sales or refinance, so your project does not need to carry monthly repayments during the build. Lenders size the facility to include a build-in interest reserve.

Related finance

Explore related pages

Other Doulton specialisms and lenders that commonly fit alongside this one. We always compare the full 130+ lender panel before recommending a deal.