Development finance for properties from Croydon to Mayfair

Fox Davidson are a multi-award-winning property debt advisory based in Knightsbridge, London. We advise global clients on funding options for developing residential and commercial property in London. We secure senior debt, mezzanine and equity solutions and have access to funding lines from £1 million and up to £200 million.

With over 50 years combined experience and knowledge of the London real estate sector, we are well placed to advise and arrange funding from a multitude of funding houses including high street commercial banks, funds and family offices.

Fox Davidson specialise in property development finance in London. We fund residential housing including PBSA and retirement living and all commercial development projects.

This information on this page covers everything from lenders criteria to how to structure deals to allow you to put in the minimum amount of cash on day one.  The information should be useful to both first-time developers and seasoned property developers looking at alternate funding sources.

Why Fox Davidson?

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  • Fox Davidson specialise in property development funding in London, we are a small, experienced team of award-winning property financiers. As well as giving clients sound advice we provide clients with introductions to property professionals including planners, surveyors, architects & building contractors.
  • Fox Davidson partner with lending houses ranging from high street commercial banks through to private funds. We structure debt including senior debt, mezzanine, and equity.
  • We are discreet and place lending with funds that match our clients’ experience, portfolio, and funding requirements and do not blanket canvas opportunities to multiple lenders.
  • We are hands-on and visit sites in person along with yourself and the funder. We are relationship- and results-driven and that is what sets us apart.
  • Fox Davidson are recognised for award-winning advice and structuring of debt. We have a good reputation amongst funders for only putting forward cases that meet lenders criteria, that are well packaged and ensure the proposal only goes to the right person within the right funder for each given scheme.
  • We liaise with all parties that make the development happen, including the builder, architects, and other property professionals. This helps to ensure an efficient process from first drawdown practical completion.
  • We are experienced so we offer guidance where needed and importantly we find solutions when problems arise, there is not much we have not seen and dealt with whilst funding construction projects in London.

Property development finance options

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Property development finance will fall into several categories and they are;

Light Refurbishment

Light refurbishment finance is used to describe non-structural refurbishments that do not require a change of use to the property. Purchasing a London property to replace the bathrooms and kitchens and decorate internally would fall into this category.

Heavy Refurbishment

A heavy refurbishment will include structural changes to a property or a change of use, perhaps from C3 residential use to C4 HMO use. Heavy refurbishments can be completed under permitted development or may need planning permission.


Property development finance for conversions can be completed under permitted development or may need planning. Examples of conversions include changing a single building into multiple units. These schemes require the developer to have completed previous developments.

New Build

New build developments from the ground up may involve the demolition of an existing building or the development of a brown field site into multiple new build houses and/or apartments. As with a conversion we will need the developer to have experience and to be working with a competent professional team including building contractors and an architect.


Application checklist

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  • Development finance appraisal
  • Link to the planning for the site
  • GDV comparables from one or more agents
  • Development CV showcasing previous projects
  • Property assets and liabilities statement

Development finance criteria

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We estimate that there are approximately 100 funders in the UK who will lend development finance either as senior debt, mezzanine, or equity. For the best development finance terms, there are some basic rules, lending up to 60% of gross development value (GDV) and developer cash input of 20% of total costs.

However, pushing the boundaries is sometimes more attractive as it means that you can develop multiple sites or keep cash in reserves. For experienced developers, funding via joint venture is possible to 100% of total costs. Knowing lenders’ appetite and combining funders to reach peak debt levels when needed is where we excel.

We have funded several billion pounds worth of property in London, including open market housing, social housing, purpose-built student accommodation, retirement living, and commercial projects including warehousing and offices.

The typical criteria for London residential property development funding:

  • 90% of total costs (land, build, professional fees) and up to 75% of GDV.
  • Mezzanine finance and equity solutions up to 95%/100% of total costs.
  • Joint venture for experienced developers or house-building contractors only.
  • First-time developers
  • Loans from £1 million and up to £200 million
  • Interest rolled up and repaid on sale or refinance.
  • Rates from 3.5% over Bank of England Base rate/SONIA

Build-to-rent development finance

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Build-to-rent is a specialist area of the private residential property sector. We have seen a marked increase in build to rent schemes in London ranging from small multiple unit developments through to blocks of flats totalling several hundred units.

It’s possible to secure a blended rate of finance using a lender that will fund both the build and the subsequent long-term finance whilst the properties are rented out. The blended rate for build-to-rent development finance is often more competitive than standalone development finance.

With many Londoners being priced out of the property market, the rental sector is key in delivering housing for thousands of people each year. Build-to-rent finance allows a developer to fund the development and investment finance under the umbrella of one company which provides certainty and reduced costs including valuation and legal costs.


100% development finance

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Fox Davidson work with senior debt lenders, mezzanine finance lenders and private equity lenders to secure 100% of all costs and therefore requiring little or no cash equity from the developer. We only work with experienced developers and on schemes with a GDV above £5 million.

It is worth considering other ways to reduce your cash equity requirement. Using mezzanine finance cash equity can be as low as 3%.

Alternative methods include deferred land payments to the landowner and joint venture with landowners. We have structured many deals where the developer and landowner JV and can advise correct structures for obtaining finance including new SPV limited company and also third-party charges on land.


Development finance for high-value single units

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Prime central London real estate funding is a specialist area of finance. The market for multi-million-pound single units is underserved.

We work with several bespoke lending houses that specialise in the funding of high-value single units in London. We can fund single units from £5 million with no upward limit by working with our specialist high-value property lending partners.


Development finance for first-time developers

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Fox Davidson work with first-time developers, we appreciate that all property developers must start somewhere. We offer advice based on experience, we can help you build your contacts including land agents, architects, and builders.

Funding for first-time developers is not an issue provided the rest of the case stacks up. We would need you to be using a well-funded main contractor and probably to employ a project manager.

Your net asset position and cash available to go into the project at the start are equally as important. London property development finance companies will want to see between 10% and 20% of total costs cash input and net property assets to cover up to 20% of the loan amount.

Lenders take security in the form of a debenture over the borrowing company, an unsecured personal guarantee (PG) which will be a % of the loan amount or cover interest and cost overruns. The lender will need a first charge on the development site.

Funding options for first-time developers include refurbishment finance through to ground-up new build development finance.


Personal guarantees

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Most lenders require personal guarantees of some kind. Developers who do not wish to provide them will need to put in more of their own cash to make the lender comfortable.

We would expect gross funding to not be above 50%/55% of GDV. Personal guarantees range from 20% of the loan amount through to interest and cost overruns.



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There are of course various types of planning, outline, detailed, pre-app and permitted development including Class Q.

Lenders require a site to have full detailed planning for you to draw down funds although some will consider sites with outline planning if funding is needed to secure the site.

For sites without full detailed planning, we recommend agreeing a conditional exchange with completion on receipt of full planning. This should be negotiated via your solicitor.

Lenders are happy to lend if permitted development will cover the works.


Property refurbishment finance

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Lenders will price property refurbishment finance by the cost and type of work you intend to carry out.

As a rule, property refurbishment loans require a 25% deposit with the funder providing 75% (gross including rolled-up interest and fees) and 100% of the cost of works, subject to approx. 70% of the GDV.

Property refurbishment finance is useful for permitted development conversions, HMO refurbishments and auction property purchases. Funding can be arranged within a few days.


Development finance for overseas clients

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Funding is available to UK limited companies, but the directors and shareholders do not have to be resident or UK domiciled.

Fox Davidson work with clients across the globe who wish to fund property in the UK.

As with any lending case, we will carry out our own due diligence on the client and the project.


Why rate is not the most important factor

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Development finance is not all about achieving the best rate of interest. While having a competitive rate is ideal as it affects profitability there are many more factors that should be held with equal or more regard.

  • How well funded is your London development finance lender?

During the lockdown of 2019, several lenders stopped lending all together. Peer to Peer lenders that have almost become household names amongst seasoned developers stopped lending overnight. But not only peer to peer lenders, several high street banks such as NatWest and Metro bank all stopped lending. One of the most important factors you should be considering is how well funded is your lender? Where are they securing finance form, am you going to have issues securing drawdowns from them? As a developer, you are relying on a lender to lend you funds for typically 12-24 months. If a lender runs out of funds or their funding line is pulled then you will be left probably having to mothball your site whilst you organise new funding, all of which will eat into profits, possibly making the scheme unprofitable. We have seen this happen.

  • Who are you dealing with?

It’s all very well securing cheap money but who are you dealing with at the bank, how experienced are they in property development, what influence or flexibility can they exercise should you need to change the loan you require or want an extension. How involved are they? Perhaps too involved! Are they smart enough to help you secure the funding or will they close shop if you say the wrong thing?  We work with lenders that insist on monthly QS visits, and we work with lenders that do not do valuations or site visits at all. Selecting the right lender and the right people working at those lenders is key to forming a good relationship between funder and developer.

  • Other factors

If a lender takes two weeks to release a drawdown can you cope with waiting to pay your contractors? How flexible is your lender should you wish to extend or amend the facility? Does your lender accept soft equity through planning gain or deferred land payments to the vendor? Some lenders do not roll up interest but instead, ask you to service the loan monthly. There are many moving parts to development finance and at Fox Davidson, we are experienced enough to understand all of them and to look after our clients’ interests.

Fox Davidson are instructed by clients to secure the best terms for them.

All that we do every day is development finance, we make new relationships with new entrants to market almost daily, we keep up to date with around 100 funders and their changing criteria and appetite, we dismiss lenders that do not do what they promise and do not recommend lenders that have hidden charges or are impossible to deal with.

By outsourcing your finance of projects in London to Fox Davidson we will save you time, money, and stress, leaving you to deliver quality residential and commercial property.


Top 10 tips

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  1. Use a broker: They will save you time, money and a lot of stress.
  2. Put in place a good professional team: A builder, an architect and a solicitor familiar with development finance. Lenders will need you to have an experienced team working with you.
  3. CVs: Make sure your CV of development experience (if any) is up to date and easy to read.
  4. Paperwork: Ensure that you have up to date accounts/tax returns and that bank statements are in order as some lenders will ask for these.
  5. Planning: If the development needs planning ensure you have full planning in place as it will be needed.
  6. Build schedule: We can work with you to put together a well-presented build schedule including costing. The costs need to be accurate as they will be tested against current material and build costs.
  7. Exit: Your exit needs to be sound. If not from the sale of the development then a lender will want proof that you can get exit finance by way of a mortgage e.g. a buy to let mortgage.
  8. Contingency: Any project should have a level of funds for contingency built in, ensure you plan for increased costs or delays.
  9. Time Vvs Rate: Before you decide to take the cheapest rate bare in mind that some of the best rates come from lenders that also arrange commercial and buy to let mortgages but often these lenders take considerably longer than (slightly more expensive) pure property development finance lenders. What is more important to you?
  10. Contact: Keeping in regular contact with the broker (and therefore lender) at all stages during the application process, build process and sales/refinance period will ensure that the lender knows exactly what is going on and can work with you in the event of delays or requests for extra funds.


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What profit does a developer need to make?

Most property development finance lenders in London require the developer to be making at least a 20% profit.

Can I still get property development finance in London if the site does not have planning permission?

A way to get around the issue of planning will be to utilise Bridging finance whilst planning permission is obtained.

Bridging finance is a short-term loan secured on property or land in the UK. The finance will bridge the gap and is replaced by property development finance or may be repaid from the sale of the asset.

How quickly can I secure property development finance?

The lenders we work with are focused on lending funds for property development finance only. This means that fast lending decisions can be made. With a deal presented in the right way by Fox Davidson Commercial we have secured light refurbishment development funding within 5 days. For more in depth funding such as conversions or new builds the timescales will be longer. The speed at which funding can happen is determined by the developers’ ability to get the necessary paperwork in place and for the initial development appraisal surveys and valuations to take place. A solicitor with plenty of experience of securing finance for property developments is also essential.

What paperwork is required for a property development finance loan?

  • Developer CVs showcasing previous developments
  • Development appraisal including build costs and schedule of works
  • Details of your professional design and build team
  • Planning
  • Due diligence – Proof of ID and proof of funds

Further paperwork may be required depending on the lender and/or the proposed scheme.


Fox Davidson are an award-winning development finance broker in London, we have offices in Knightsbridge but many of our consultants now work from home and visit clients and development sites once funding is agreed.

We can help you finance a commercial development in Soho, residential mortgage in Kensington, property refurbishment in Chelsea, first-time development project in Surrey, and more.

For funding on development sites in London and the South East, please call our Knightsbridge office on or 0203 519 5590 or email us at