Residential Development Finance
Senior debt, mezzanine and stretched senior facilities for ground-up housing, flats and small schemes across the UK. Drawdown-based funding, monitored builds, exits modelled from day one.
Funding new-build housing schemes from start to practical completion
Residential development finance is short-term, project-specific lending used to acquire a site and build out new residential units. Doulton arranges senior debt from £250k to £150m, structured as a land tranche on day one followed by staged construction drawdowns drawn against the monitoring surveyor's monthly valuations. Most facilities run for 12 to 24 months and are repaid through unit sales or a refinance onto a buy-to-let or term loan once the development is signed off at practical completion.
Lenders price residential schemes on Loan-to-Gross-Development-Value (LTGDV) and Loan-to-Cost (LTC) caps. Senior debt typically tops out at 65% LTGDV and 80-85% LTC, with the residual gap funded by developer equity or mezzanine. Where a developer wants to recycle equity into the next site, a stretched-senior or mezzanine top-up can lift effective leverage to 90% of total cost without two separate lenders.
Rates from 0.49% per month on the best senior tranches, scaling up with leverage and complexity. Arrangement fees of 1.5-2% on drawn funds and exit fees of 1-2% on the day-one or fully drawn loan amount are standard across the market. We benchmark every quote against the active development panel - Octopus, United Trust Bank, Shawbrook, Hampshire Trust, LendInvest, Atelier, Cohort, Fiduciam and the senior debt funds - so the headline rate is always priced in context.
What makes this work in practice
Senior debt to 65% LTGDV
Whole-of-market access to senior development lenders pricing schemes on gross development value rather than peak debt. Day-one land advance plus monthly drawdowns released against the monitoring surveyor's valuation.
Stretched senior to 90% LTC
Where developer equity is light, a single lender stretched-senior facility lifts leverage to 85-90% of total project cost without bringing in a separate mezzanine provider. Cleaner inter-creditor structure, one set of legals.
Mezzanine and equity top-ups
Behind the senior tranche we arrange institutional mezzanine, family-office equity and JV funding to fill the gap. Useful where the developer wants to spread cash across two or three live sites rather than tie it all up in one scheme.
Monitoring surveyor managed end-to-end
We instruct the monitoring surveyor, agree the initial cost report and run the monthly drawdown cycle with the lender, the QS and the contractor. Drawdowns released in 5-10 working days on a properly packaged scheme.
Exit strategy modelled day one
Sales-led or refinance-led exit modelled into the deal at submission. Doulton arranges the development exit bridge or term refinance through the same brokerage, so the long-term picture is priced in from the start.
First-time and experienced developers
Lender appetite for first-time developers exists where the team has a credible contractor, professional QS and an end product the lender's surveyor will value. We position the case to lenders genuinely comfortable with the experience profile rather than burning quotes on the wrong panel.
How it works
Brief and feasibility
We review purchase price, build costs, GDV appraisal, planning consent and exit. Indicative terms back from up to five lenders within 24-48 hours, with a clear view of leverage, rate and headroom.
Shortlist and credit-backed offer
Best-fit lender selected with you. Heads of terms issued, valuation and monitoring surveyor instructed. Credit-backed offer typically within 10-15 working days.
Legals and completion
Solicitors run title, security and inter-creditor work in parallel with the lender's legal review. Day-one land tranche drawn at completion, with the construction facility ready to release.
Drawdowns and exit
Monthly drawdown cycle managed by the monitoring surveyor. At practical completion we line up the development exit bridge or term refinance so the senior facility settles without breach.
Get residential development finance terms in 24 hours
Send us the appraisal. We will come back with indicative leverage, rate and structure from the senior debt panel, plus a view on where mezzanine or stretched senior makes sense. No fee until completion on most cases.
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.
Development Finance
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