Use Development Finance to Refurbish a Property

Development finance is a type of short-term lending that a property developer or company will use to pay for the renovation or refurbishment of a property.

  • Borrow £25,000 to £25 million
  • Loan term of 3 to 24 months
  • 100% of build costs
  • 50% of purchase price
  • Bad credit considered
  • Available in UK, Scotland and Wales

Get a Personal Quote

  • By submitting this form I agree to being contacted by SPF Short Term Finance and I have read and accept the Terms and Conditions.

Apply For Property Development Finance with Octagon Capital

Octagon Capital are a regulated broker and work with a number of leading development finance lenders such as Magnet Capital and providers to help find the right finance and terms for you. Simply call us on the number provided or enter your details below and your enquiry will be sent to our dedicated development finance team who will get in touch immediately.

Once you have spoken to our advisors and we have a better idea of your plans for development, we are able to give an approval in principle in as little as 24 hours. We are able to facilitate funding for the following types of development:

  • New builds
  • Renovations
  • Extensions and conversions
  • Part builds
  • Residential property (see below)
  • Commercial property (see below)

Our Development Finance Lenders


united trust bank
west one
octopus property

Try Our Development Finance Calculator

By submitting this form I agree to being contacted by SPF Short Term Finance and I have read and accept the Terms and Conditions.

  • Please give us a call if you require more than £25,000,000

Development Finance Example

A developer has planning permission to build three houses with the gross development value estimated at £5 million. The total costs involved are £3 million, made up of £1.5 million for purchasing the land and £1.5 million in build costs. A lender might agree to development finance of £3.75 million (limited to 75% of costs) structured as £400,000 initial advance followed by the balance in stages throughout the build.

Residential Property Development Finance


From single residential builds to large-scale multi-unit development complexes, we can help you renovate, refurbish or buy properties for residential purposes. Whether it is a single flat, house, mansion or block of flats, Octagon Capital can help you finance the construction costs and purchase the property on flexible terms. Once complete, you as the developer will have the choice to sell the new and improved flats or homes at a higher price or rent them out to the public and generate some rental income.

Commercial Property Development Finance

Commercial development finance

If you are looking to finance commercial properties including offices, shops, farms or vacant land, get in touch with one of our advisors today. We can help you finance all the fittings and fixtures such as lighting, plumbing and the aesthetics of the store front. We work with a range of lenders who are experienced in working with commercial property so you can be rest assured that you are in good hands.

New Build Finance

new build finance

Whether you are building a new estate from a plot of land or knocking down a property and starting from fresh, we can help find the new build finance for you. There are several new build schemes provided by local councils and banks to help those with new builds, including those with deposits of just 5% (help to buy), equity loans where you can get five years interest free if you have a 20% deposit and also guarantor mortgages. (Source: MoneyAdviceService)

How Much Can You Borrow With Property Development Finance?

  • The loan amount is based on a percentage of gross development value and final worth
  • Some lenders offer a maximum of 60% loan to GDV with a maximum of 75% of total costs
  • Typically lenders cover full build costs and a percentage of land costs

Whilst it varies from lender to lender featured on Octagon Capital, the loan amount is based on a percentage of gross development value (GDV) and what the property will be worth at the end of the work you have done as it were sold to a purchaser on the open market. Some of the lenders we feature offer a maximum of 60% loan to GDV, with a maximum of 75% of total costs. Typically, the development finance lender can provide all of the build costs and just a percentage of the land costs. The money is usually sent to the developer in stages according to the certifications from the architect and quantity surveyor and therefore funds are not usually sent in one lump sum for this kind of finance.

What Are The Costs Associated with Development Finance?

  • There is typically a commitment fee of 2% and a potential 2% broker fee
  • Your surveyor or solicitor could charge a valuation or administrative fee
  • Interest rates vary but typically are from 6%

You are not required to pay anything until a formal offer letter is issued. Upon accepting the offer, there is a ‘commitment fee’ of around 2% of the total amount borrowed and there could be a broker fee of 2% applicable too. There also fees charged by your own surveyor and solicitor in order to value the properties in question and handle any contractual and legal administration.

In terms of interest charged, lenders start at 6.0% per annum which can vary depending on the company, GDV, security and more. When it comes to repaying your loan and interest, you can choose to do this on a monthly basis or ‘roll up’ the interest so that you can delay full repayment once the project is completed and sold. This will mean that the interest is compounded so will be slightly more expensive compared to paying each month.

What Can I Use Development Finance For?

Light Refurbishment

The main changes to the property are aesthetic rather than structural, and involve internal work on floors, ceilings and walls. This is generally the most straightforward type of development.

Heavy Refurbishment or Renovation

As well as aesthetic changes, this could require moving internal walls, plumbing, or electrics, adding rooms and external walls, or even partial demolition and rebuilding.

Ground-Up Development

Starting from an empty piece of land and building it up. The heaviest type of property project, starting with an empty plot of land (or just stonework), or a very heavy refurbishment/conversion and turning it into fully functioning homes or block of flats with the aim to rent it out to the public or sell on the open market.

The 5-Step Process for Development Finance

Step 1 – Initial Meeting – We arrange a face-to-face or virtual meeting to discuss your project needs in greater detail. This meet and great allows clear communication from the onset so that all parties understand the terms of the agreement and project.

Step 2 – Get a Decision in Principle – We offer an initial quote and formal Decision in Principle within just a few hours of enquiring – and we will undergo further checks to uphold these quotes and start processing your loan application.

Step 3 – Instruct Solicitors – both parties organise the administrative side of the process by instructing their respective solicitors. This allows the application to come together and prepare for funding.

Step 4 – Property Valuation – Octagon Capital can organise a survey within 24 hours who can offer an up-to-date, reliable property valuation.

Step 5 – Funding – One the application is reviewed, funding can be approved. This process will take an average of 6 weeks and involves corresponding with solicitors and other relevant third parties.

Development Finance FAQs

Development finance is a source of short term finance and is commonly used for construction and development purposes, including new builds, refurbishments and renovations.

It is often used by investors and property developers to rebuild a property, turn a house into flats or develop a commercial property and rent it out or sell it for a higher profit.

You can borrow for up to 24 months and funds are available through non-bank institutions and specialist finance lenders – and this can usually give you access to faster funding when you need it.

Octagon Capital works across the whole of the UK, Wales and Scotland. We may be able to facilitate funding in Ireland or overseas if the customer can provide more information.

You can apply to borrow up to £25 million towards your development finance project and this is based on around 100% of build costs and 50% to 70% of the land costs.

Funds can usually be transferred within 2 weeks and you may decide to receive this all in one lump sum or in stages, to help manage the cash flow of your ongoing project.

Depending on the complexity of the project, funding may take a little longer or even faster.

Octagon Capital can usually provide a decision in principle within 1 day or sometimes within the few hours. We will require some key information including construction costs, site cost and gross development value in order to provide a decision as quickly as possible.

  • You must be based in UK, Scotland or Wales
  • You must have information including GDV, construction and site costs
  • All credit histories considered
  • Must be a limited company

A bridging loan product is focused more on borrowing money to close out a deal with a strict deadline. This includes buying a property from an auction and having up to 28 days to come up with the funds or your risk losing your deposit and the deal (see auction finance).

Property development finance is best used for refurbishments and renovations and is not necessary as time sensitive, despite both loans having a maximum term of 24 months. Another key differentiation is basing the project on how ‘heavy’ it is, with different categories available with property development and not bridging.

  • 2% commitment fee when accepting the offer
  • 2% broker fee (this could sometimes be lower)
  • Survey and valuation fees (usually up to £1,000)
  • Any personal legal and solicitor fees

Simply enter your details into the form provided by Octagon Capital above and one of our advisors will come back to you with more information within 24 hours. The more information you can provide about your property, the more feedback we can provide and we can usually provide indicative quotes on the same day of applying.

Octagon Capital is a regulated broker covering the whole of the UK, Wales and Scotland. We work with over 40 specialist lenders and can provide a range of quotes and funding options for your particular project.

Every customer receives a personalised quotation and we also offer guidance from our team of experts who have years of specialising in development finance. We always try to do what is best for the customer, helping you get the most competitive rates, fastest and most effective source of funding possible.