London Development Finance Rates 2026 — Updated October 2026
- London development finance
- From 8.8% p.a.London development finance
- Typical range
- 9.5%–12%Typical range
- Included in costs by lenders
- Section 106 and CILIncluded in costs by lenders
- Last updated
- October 2026Last updated
London schemes carry higher land values, build costs and GDVs, so facilities are larger and lender competition is stronger for good sites. Rates follow the national range — from 8.8%, typically 9.5%–12% — while London-specific risks (party walls, rights of light, Section 106 and CIL, leasehold sales) shape leverage and timelines.
What London development finance costs: worked example
- Average drawn
- about 60% over 18 months
- Interest
- roughly £222,300
GDV £4m, facility £2.6m (65% LTGDV) at 9.5%.
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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
- London 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
Are London schemes priced differently?
Rates follow the national range; leverage and timelines reflect London build costs and planning obligations.
Do Section 106 and CIL affect funding?
Yes — lenders include them in costs and may require them to be funded before drawdown.
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