What Is Short-Term Development Finance?
Short-term development finance is a property funding solution designed to support acquisitions, refurbishments, or construction projects over a limited period — usually between 6 and 24 months. Unlike traditional long-term mortgages, this finance provides immediate capital for developers and investors, repaid upon project completion through property sales or refinancing.
In London and across the UK, short-term development finance is widely used by developers to secure sites, fund works, and deliver projects within strict timelines.
When to Use Short-Term Development Finance
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Site Acquisition – Purchasing land or buildings before full development loans are approved.
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Refurbishment Projects – Carrying out upgrades or conversions to make a property mortgageable.
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Planning Gain – Holding a site while securing planning permission to increase value.
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Construction Finance – Funding ground-up developments or heavy renovations.
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Exit Finance – Covering costs after project completion while awaiting sales.
Fraser Bond advises clients that short-term development loans are best used as a bridge between opportunity and long-term finance.
Features of UK Short-Term Development Finance
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Loan Term – Typically 6 to 24 months.
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Rates – Interest charged monthly, usually 0.6% to 1.5% per month.
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Loan-to-Value (LTV) – Up to 70% on purchase, with staged drawdowns for construction.
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Repayment – Via sale of completed units or refinance into longer-term debt.
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Flexibility – Can be used for residential, commercial, or mixed-use projects.
Benefits and Risks
Benefits
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Speed – Quick access to funding compared with traditional bank loans.
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Versatility – Suitable for refurbishments, conversions, and new builds.
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Opportunity Capture – Allows developers to secure sites in London before competitors.
Risks
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Higher Costs – More expensive than long-term finance.
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Exit Risk – Repayment depends on sales or refinancing.
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Short-Term Only – Not a replacement for full development finance.
Fraser Bond – Advisory on Development Finance UK
Fraser Bond works with developers, landlords, and investors to secure and structure short-term development finance:
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Independent Advice – Assessing whether short-term funding is suitable for your project.
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Trusted Lender Access – Introducing clients to established UK development lenders.
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Application Packaging – Preparing proposals to secure approvals quickly.
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Exit Strategy Planning – Ensuring repayment through sales or long-term finance.
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Investor Support – Aligning development finance with portfolio strategy and compliance.
To explore short-term development finance tailored to your London or UK project, visit FraserBond.com.
