Development Finance Interest Rates
A comprehensive guide to current development finance rates in the UK. Understand what drives pricing and how to secure the best terms for your project.
Current development finance rates
Development finance interest rates in the UK typically range from 0.45% to 1.25% per month, depending on the project, borrower, and lender. Unlike standard mortgages, development finance is priced individually based on the risk profile of each scheme.
As a specialist broker with access to 130+ lenders, Doulton Bridging Finance negotiates competitive rates by presenting your project to the lenders most likely to offer favourable terms. The right broker can make a material difference to your borrowing costs.
Indicative rate comparison
The table below gives a general guide to current market rates. Your actual rate will depend on the specific details of your project.
| Scenario | Typical Rate | Max LTV |
|---|---|---|
| Experienced Developer, Low LTV | 0.45% - 0.65% pm | Up to 65% GDV |
| Standard Development Project | 0.65% - 0.85% pm | Up to 70% GDV |
| Higher LTV / Complex Scheme | 0.85% - 1.10% pm | Up to 75% GDV |
| First-Time Developer | 0.75% - 1.25% pm | Up to 65% GDV |
Rates shown are indicative and subject to change. Contact us for a quote specific to your project.
Key factors that influence pricing
Developer Experience
Lenders offer their best rates to experienced developers with a proven track record. First-time developers will typically pay a premium, though competitive rates are still available with the right structure.
Loan-to-Value (LTV)
The lower the LTV, the lower the risk for the lender, and the better the rate you can achieve. Most development lenders offer up to 70% of land cost and up to 100% of build costs.
Loan-to-GDV
Lenders look at the total facility as a percentage of the gross development value. Staying below 65% of GDV typically unlocks the most competitive pricing.
Location and Property Type
Prime locations in high-demand areas attract better rates. Unusual property types or locations with weaker resale markets may carry a premium.
Planning Status
Sites with full planning permission are more attractive to lenders than those with outline or pending planning. Securing planning before applying for finance can significantly reduce your rate.
Project Size and Duration
Larger projects often attract more competitive rates as lenders compete for bigger deals. Shorter build programmes are also favoured, as they reduce the lender's exposure period.
How Doulton finds you the best rate
Development finance is a specialist market where rates vary significantly between lenders. A project that one lender prices at 0.95% per month may be offered at 0.65% by another, simply because it fits their lending criteria more closely.
Our team presents your project to the lenders most likely to compete for your business. We know which lenders favour certain locations, project types, and borrower profiles, and we use that knowledge to drive competitive tension and secure the best possible terms.
Find out what rate you qualify for
Share your project details and we will come back to you with indicative terms from the most suitable lenders on our panel.
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.
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