Bridging and development topics

You get a bridging loan for property development by using it to buy or hold land or property at a pre-planning or acquisition stage, rather than to fund construction. Lenders require property security, acceptable loan-to-value, and a clear exit strategy, usually a refinance onto development finance or a sale once value is added.

Development finance is similar in cost and term to bridging loans but is designed for construction and major refurbishment. It can fund up to 100% of build costs and is assessed against gross development value, making it more suitable for larger projects.

Development finance funds building or conversion works in staged drawdowns against certified costs, sized on the finished value and the total cost. Bridging finance is usually a single advance against a property's current value, used for a purchase, light refurbishment or an exit, rather than a facility drawn in stages against works.

Development finance suits larger or multi-unit schemes built for sale, while a self-build mortgage suits one home to live in. A bridge fills gaps in either, such as securing land before the main finance is approved.

Short-term secured lending, usually between three and twenty-four months, used where timing matters more than cost: buying at auction, breaking a chain, or funding works before a property can be refinanced conventionally. Interest is materially higher than a term mortgage, and lending is granted against a credible exit: the sale or refinance that will repay it. No exit, no loan.