Permitted Development Finance
Funding for permitted development conversions under Class MA, Class O and the wider PD regime. We structure the facility around prior approval status, lender appetite for the asset class, and a clean exit through sales or BTL refinance.
Specialist funding for office, retail and commercial-to-residential PD conversions
Permitted development rights let owners convert commercial buildings into residential use without a full planning application. Class MA (commercial, business and service uses to residential) is the dominant route since March 2021, replacing the older Class O office-to-resi consent. Prior approval still has to be granted and the scheme must comply with the prescribed conditions on light, space, transport and flooding.
PD conversion finance sits between bridging and full development finance. Light-touch conversions where the shell is sound run on heavy refurbishment bridging at 70-75% LTV with a single drawdown cycle. Heavier conversions involving structural work, extensions or upper-floor additions sit on a true development facility with senior debt to 65% LTGDV and a monitored drawdown schedule. Doulton structures the deal on whichever side of the line your scheme actually falls.
Loans run from £150k to £25m, term 12-18 months, rates from 0.65% per month for clean PD cases on standard asset classes. Lenders with genuine PD appetite include Octopus, Hampshire Trust, Shawbrook, LendInvest, Atelier, MT Finance and a small number of specialist PD funds. Lender selection turns heavily on prior approval status, asset location and the experience of the developer with previous PD conversions.
What makes this work in practice
Pre and post prior approval lenders
Most lenders need prior approval already granted. A small panel will fund pre-prior approval where the case is clearly within the PD parameters - useful when the seller wants completion before the 56-day determination period ends.
Light vs heavy conversion structuring
Cosmetic resi conversion runs on refurbishment bridging with one or two drawdowns. Heavy conversions with structural changes and additional storeys need a monitored development facility. We size the wrapper to the actual scope.
Class MA and Class O experience
Doulton has placed Class O office conversions since the PD regime opened in 2013 and the current Class MA scheme since March 2021. Lender preferences on light obligations, daylight and flooding evidence are baked into how we package the case.
Title and planning diligence built in
We coordinate with planning solicitors on Article 4 directions, restrictive covenants and listed-building consents that override PD rights. Surfacing these issues at submission stops them collapsing the deal at legals.
Sales and BTL exit modelled
Most PD conversions exit through unit sales or BTL refinance once the new dwellings are signed off at PC. We line up the development exit bridge or BTL facility through the same brokerage so the entire path is priced in upfront.
Upper-floor extensions and Class AA
Class AA upward extensions to existing blocks of flats and Class ZA demolition-and-rebuild schemes are funded by a narrower lender set. We map appetite before applying so the scheme lands with a lender that has actually completed similar cases.
How it works
PD status and feasibility
We review prior approval status, scheme drawings, build cost estimate and GDV. Indicative terms back from two to four lenders within 48 hours.
Lender selection
Best-fit lender chosen on PD experience, leverage and rate. Heads of terms issued and valuation instructed. Monitoring surveyor appointed where the scheme is on a monitored facility.
Legals and drawdowns
Solicitors run security and prior approval review in parallel. Day-one purchase tranche released at completion, construction drawdowns thereafter.
Practical completion and exit
On PC certificate and Building Regs sign-off, the development bridge or BTL refinance settles the facility. Doulton arranges the exit through the same case file.
Talk to a PD specialist about your conversion
Send us the prior approval decision notice, the build cost plan and the resi GDV. Indicative terms back within 48 hours, structured around the right lender for the scope and asset class.
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.
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.
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Ground-up and refurbishment development funding from £125k to £300m.
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