Do I need planning permission before applying?

Not always — some lenders will provide funding conditional on planning permission being obtained. However, having full planning permission significantly strengthens your application and increases the loan amount available (lenders lend on a higher GDV with certainty of consent). Conditional PP (outline permission) is accepted by many specialist lenders.

What experience do I need as a developer?

Many specialist lenders require at least 1–2 completed development schemes for adverse credit applications. First-time developers can still access funding with a strong scheme, a credible professional team (experienced architect, project manager, main contractor), and a larger equity contribution — typically requiring LTGDV of 55–60% or less.

How long does development finance take to arrange?

Typically 4–8 weeks from application to first drawdown, depending on legal work, valuation, and monitoring surveyor appointment. Complex or higher-value schemes may take longer. A bridging loan can be used to acquire the site while development finance is arranged.

What is a monitoring surveyor and what do they cost?

A monitoring surveyor is appointed by the lender to inspect the build at each drawdown stage and confirm works have been completed to the required standard before funds are released. The borrower pays their fee — typically £1,000–£3,000 per residential unit, depending on scheme complexity. This cost must be included in your development appraisal.

Can I get development finance for a single house?

Yes — some specialist lenders fund single dwelling ground-up builds from £150,000. For smaller schemes, the minimum viable size is typically one or two units. Schemes of this size may be better structured as heavy refurbishment bridging if works fall short of a full ground-up build.

Development Finance with Adverse Credit

What is development finance?

Development finance is a specialist short-term loan for property developers funding the construction or conversion of residential or commercial property. Unlike a bridging loan (which funds a single lump sum), development finance is drawn down in stages as the build progresses — reducing overall interest costs since you only pay interest on funds drawn.

Can I get development finance with adverse credit?

Yes. Specialist development lenders focus primarily on the scheme viability, the developer's experience, and the Gross Development Value (GDV) — not just the borrower's credit history. Adverse credit is one factor assessed alongside the full strength of the case.

First-time developers with adverse credit face the highest barriers — lenders want confidence in both the scheme and the person running it. Experienced developers with a track record of completed schemes have significantly more options even with CCJs or defaults on record.

What drives development finance terms?

Development finance pricing varies significantly by case. The main factors are:

Developer experience

An established developer with 2+ completed schemes has the widest lender choice and best terms, even with adverse credit. First-time developers face more limited options.

Scheme viability and profit margin

Lenders expect a minimum 20–25% profit on GDV. A well-structured scheme with strong margins offsets borrower adverse credit concerns significantly.

LTGDV and equity contribution

Lower LTGDV (more equity in the scheme) opens more lender options. Adverse credit applicants typically need to contribute more equity to access specialist lenders.

Director credit profile

Assessed holistically alongside scheme quality. A strong scheme with an experienced developer team can succeed even with CCJs or defaults on record.

LTGDV vs LTV — what's the difference?

Development lenders lend on a Loan-to-Gross Development Value (LTGDV) basis — the total loan as a percentage of the completed scheme's value. Most specialist lenders advance up to 60–70% LTGDV for adverse credit cases. LTV refers specifically to the day-one land or site advance (typically up to 60% of site/purchase value). The GDV assessment requires a development appraisal and RICS valuation.

Lenders expect a minimum profit margin of 20–25% on GDV. A scheme showing less than 20% profit margin will struggle to attract funding regardless of credit history. Build costs, site acquisition, finance costs, and professional fees must all be accounted for in the appraisal.

How development finance works

Funds are released in tranches as the build reaches agreed milestones, verified by a monitoring surveyor appointed by the lender. The initial advance covers the land or site purchase. Subsequent drawdowns are released as foundations, frame, roof, fit-out and final completion stages are reached. Interest is typically rolled up during the build — no monthly payments required.

Permitted development and conversions

Office-to-residential and commercial-to-residential conversions under permitted development rights are increasingly popular schemes. Specialist lenders on our panel have specific products for these conversion types — including for developers with adverse credit. These often sit between refurbishment finance and full development finance in terms of structure.

Development Finance for Adverse Credit

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