What is Residential Property Development Finance?


In this article we give you a basic introduction and overview of residential property development finance and how you might find it useful for funding your development project.

Residential property development finance refers to the funding and financial support provided to real estate developers for the construction or renovation of residential properties. It is a type of financing specifically tailored to meet the unique requirements of property development projects.

Developing residential properties typically involves various stages, such as:

  • land acquisition,
  • construction,
  • infrastructure development,
  • marketing and project promotion.

Each stage requires substantial capital, and property developers often seek external funding to cover these costs.

Residential property development finance can be obtained from different sources, including banks, specialised lenders, private investors, or development finance institutions. The funding options might include loans, lines of credit, mezzanine financing, or joint ventures, depending on the nature and scale of the project.

Lenders providing residential property development finance are typically looking for specific information to evaluate a project’s feasibility, such as market conditions, developer’s experience, and the potential profitability of the venture. The loan terms and conditions, including interest rates, repayment period, and security requirements, are typically structured to align with the development timeline and the expected returns.

The funds obtained through residential property development finance are used to cover the development costs such as land purchase costs, construction materials and any other project-related costs. As the development progresses and sales or leasing activities generate revenue, developers repay the financing facility, often in installments or upon project completion.


Go Commercial Finance Ltd, financial advisors, South Wales, Cardiff, London, residential development, development finance



Who can apply for Residential Property Development Finance?

Residential property development finance is typically designed for experienced property developers or companies with a proven track record in property development. If you aren’t sure if you have the required experience just get in touch and one of our team will be happy to chat through some options.

Lenders offering this type of financing generally have specific eligibility criteria that borrowers must meet. While requirements may vary between lenders, common factors considered during the application process include:

  1. Developer Experience: Lenders often prefer to work with developers who have a successful history of completing similar projects. They assess the developer’s track record, expertise, and knowledge of the local property market.
  2. Project Viability: The lender evaluates the feasibility and profitability of the proposed development project. This includes analysing market demand, location, construction plans, project timelines, and expected returns.
  3. Financial Capability: The developer’s financial strength and capacity to contribute equity are important considerations. Lenders typically expect developers to have some level of financial investment in the project to demonstrate commitment and mitigate risks.
  4. Security and Collateral: Residential property development finance often requires collateral to secure the loan. This can include the development site, existing properties, or other assets owned by the developer.
  5. Repayment Plan: Borrowers must provide a clear and viable repayment plan that outlines how the loan will be repaid. This may involve the sale or leasing of the developed properties upon completion.

It’s worth noting that the specific eligibility requirements and terms for residential property development finance can vary between lenders and regions. We work with a wide range of lenders and some of the main lenders we work with are Castle Trust  and Avamore Capital. Its also worth noting that some lenders may have a minimum loan size requirement, making it more suitable for larger-scale projects.


How can Go Commercial Finance help you with your project?

If you are interested in finding out more information on residential property development finance we are only a phone call away.  We can help answer any questions that you might have and provide detailed information on any specific requirements and guide you through the application process.

We cover the whole of the UK and most European countries including Germany, France, Spain, Portugal, Switzerland and Austria.  We have good working relationship with all the main lenders and regularly arrange deals from £200,000 to £200,000,000. With over 16 years experience in residential finance, bridging loans and all kinds of financial funding for individuals and businesses we are well equipped to help you navigate this form of financial product.

Don’t delay, view our Residential Development Property Finance page or contact one of our experts at the Go Commercial Finance team.

Tel: 01446 506 508

Email: info@gocommercialfinance.com