Commercial Development Finance Rates 2026 — Updated October 2026
- Typical commercial development rates
- 9.5%–12%Typical commercial development rates
- Usual leverage
- 60%–65% of GDVUsual leverage
- Can transform terms
- Pre-let or forward saleCan transform terms
- Last updated
- October 2026Last updated
Commercial schemes — industrial units, student accommodation and build-to-rent — are priced on the strength of the exit: a pre-let or forward sale can transform terms. Rates typically run 9.5%–12%, with leverage usually 60%–65% of GDV.
What commercial development finance costs: worked example
- Interest
- about £135,000
£1.8m facility at 10%, about 60% drawn on average over 15 months.
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The figures above are indicative and describe the best case. Send your own scenario and we will come back the same working day with terms from the lenders that actually fit it.
- Enquiry type
- Development Finance
- About
- Commercial Development Finance Rates
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Enough detail to price it is the amount, the security, the purpose and how you plan to repay. The rest we can fill in on a call.
Whole of market · 130+ lenders · FCA 814533 · Same working day response
Rate context and outlook
Senior development finance currently prices from about 8.8% a year for low-leverage ground-up schemes, with most facilities at 9.5%–12%. Bank Rate is 3.75% after the 17 September hold; development lenders price off their own funding costs, so rates have stayed stable through the September swap-rate rise, and some lenders cut margins over the summer.
Lenders now expect tighter information on build costs, drawdowns and exit before committing.
Reviewed by David Doulton, Director, Doulton Bridging Finance — over 20 years in property finance. Last reviewed 1 October 2026. Doulton Money Ltd t/a Doulton Bridging Finance, FCA No. 814533.
Frequently asked questions
Do I need a pre-let for commercial development?
Not always, but a pre-let or forward sale greatly improves terms.
Is build-to-rent funded differently?
Often through institutional lenders with a forward-funding or investment exit.
How are funds released?
In stages as the build progresses, usually in arrears, after a monitoring surveyor confirms the work is done.
Do I need planning permission?
Senior development finance usually requires full planning; sites without it are funded with land bridging first.
How long does it take to arrange?
Usually 4–8 weeks, depending on valuation, the monitoring surveyor and legal work.
What is the difference between LTGDV and LTC?
LTGDV compares the loan with the finished value; LTC compares it with total costs. Lenders apply whichever is lower.
What if the build overruns?
Lenders expect a 5%–10% contingency. Overruns beyond it are usually funded by the developer, or by agreeing an extension.
Where this applies
Get a personalised rate comparison for your case
Independent whole-of-market advice · FCA No. 814533