Residential Development Finance Rates 2026 — Updated October 2026
- Houses, 1–10 units
- From 8.8%–9.5%Houses, 1–10 units
- Flats, 1–20 units
- c.9.5%–11%Flats, 1–20 units
- Typical leverage
- 60%–65% LTGDVTypical leverage
- Last updated
- October 2026Last updated
Ground-up residential schemes are the core of the development market. Houses sell individually, so lenders like the exit and price them at the sharper end of the range. Flats need the whole block finished before anything sells, carry building-safety and warranty requirements, and are often priced slightly higher or at lower leverage.
Residential Development Finance Rates — October 2026
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| Scheme type | Indicative rate | Typical leverage |
|---|---|---|
| Houses, 1–10 units | from 8.8%–9.5% | to 65% LTGDV |
| Flats, 1–20 units | c.9.5%–11% | 60%–65% LTGDV |
| Larger mixed schemes | case by case | 60%–65% LTGDV |
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- Residential 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 flats need a building warranty?
Yes — lenders and future buyers' mortgage lenders require a recognised new-home warranty.
Can I sell houses as each completes?
Yes, and sales proceeds usually repay the loan in stages.
What unit mix do lenders prefer?
Mainstream house and flat types that suit local buyers and mortgage lenders.
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.
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Independent whole-of-market advice · FCA No. 814533