Mortgage guide
Development finance for refurbishment finance
Development finance can support refurbishment involving structural works, extensions or major alterations. Read how it can cover acquisition and build costs for these projects.
- Published
- 4 Aug 2026
- Last reviewed
- 8 Oct 2026
- Reading time
- 2 min
Development finance for refurbishment finance
Development Finance for Refurbishment Projects
For refurbishment projects involving significant structural works, such as extensions, major reconfigurations, or full-scale renovations, development finance is typically the most appropriate funding solution. Unlike standard bridging or refurbishment mortgages, development finance is structured to support complex projects that require both acquisition funding and comprehensive build cost finance.
Funding structure and leverage
Development finance facilities can often fund up to 75% of the purchase price and up to 100% of build or refurbishment costs, subject to overall project viability. Funds for works are released in staged drawdowns, aligned to the build programme and verified by an independent monitoring surveyor, ensuring controlled deployment of capital as the project progresses.
Core underwriting metrics
Lenders assess development finance applications using several key financial measures:
Core underwriting metrics
| Metric | What it means |
|---|---|
| Loan to Gross Development Value (LTGDV) | The loan amount compared to the projected value of the property once works are complete, typically capped at 75%. |
| Loan to Cost (LTC) | The proportion of total project costs being financed, often up to 90%, reducing the developer’s required capital input. |
| Profit on Cost (POC) | The projected profit relative to total development cost. Most lenders require a minimum 15% POC to provide a buffer against cost overruns or market movement. |
Suitability and borrower profile
Development finance is best suited to experienced investors or developers who are undertaking structural or high-value refurbishment projects and require full financial backing. Lenders place weight on track record, professional team involvement, realistic costings, and a clearly defined exit strategy, typically sale or refinance.
Talk it through with an adviser
Speak to a Mortgage Lane adviser about your circumstances and the next steps.