How much money do you need for property development?
How much money do you need for property development, what are the deposit requirements, and is it a worthwhile venture?
Property developers are increasingly realising the benefits that bridging finance can offer when financing property development projects. A fast, flexible solution largely used when buying, selling, or refinancing property.
What's in this guide |
Bridging loans are generally available to individuals or companies that need short-term finance to cover a gap between the purchase of a new property and the sale of an existing one. The typical categories of people who take bridging loans include:
While specific eligibility criteria vary between lenders and products, common requirements exist. Below, we’ve broken the eligibility criteria down into three sections, basic requirements, financial requirements, and additional factors that might influence a bridging lender's decision.
Basic eligibility requirements include:
Age | Must be at least 18 years old; some lenders may also impose an upper age limit |
Residency Status | Should be a UK resident or a UK national residing abroad. For unregulated bridging loans, non-UK nationals have limited options |
Employment Status | Can be employed, self-employed, or retired |
Legal Entity | Can apply as an individual, a Limited Company, an LLP, or a partnership |
Experience | Having prior experience with similar projects can strengthen the application, especially if value-added work is involved, though it is not mandatory |
Loan Term | Bridging loans usually have a maximum term of 24 months, with many lenders offering terms of 12 or 18 months. For projects requiring extensive building work that can't be finished within 24 months, development finance may be more suitable |
Financial eligibility criteria include:
Solid Exit Strategy | Lenders need a definitive plan for repaying the loan, whether through selling or refinancing |
Security | Borrowers must provide high-value assets, typically property or land, as collateral |
Minimum Lending Requirement | Most lenders prefer loans of £100,000 or above |
Creditworthiness | Lenders check the borrower’s credit history to assess repayment capability. While less important than with residential mortgages, clean credit can help secure better rates |
Additional factors that might influence a lender’s decision include:
Healthy Deposit | Most lenders offer 70-75% gross LTV, but better rates may start with a 40% deposit |
Proof of Income | While not a primary requirement, proof of income can bolster an application |
Bridging loans are versatile and can be used for various purposes in the property market and beyond:
To secure a bridging loan, follow these key steps:
Ways that this can be done include:
Using a specialist broker can help navigate the market and find the best loan for your circumstances. Brokers using Brickflow’s software can search over 90% of the market in minutes, securing the best deal that fits your criteria.
To streamline the process and access the best bridging deals, register with Brickflow or inform your broker about this powerful tool. Brickflow’s platform allows for efficient comparison of bridging loans from across the market, ensuring you get the best terms for your bridging loan needs.
If you’re in the market for bridging finance and looking for the best deal, try Brickflows' bridging finance comparison tool. If you have questions about how much you can borrow, try our bridging loan calculator.
Brickflow allows you to compare offers from over 100 lenders across the UK, ensuring they find a bridging lender that meets their needs. If you have further questions, you can get in touch with our team, who will be able to advise you on the best loan to suit your project needs.
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