Senior debt financing remains one of the most effective methods of funding real estate acquisitions, developments, and large-scale refurbishments in the UK. For investors and developers operating in London’s dynamic property market, understanding how senior debt fits into a capital stack is critical to structuring deals efficiently and unlocking value. Fraser Bond offers expert advisory on sourcing and structuring senior debt to support high-value transactions with confidence and compliance.
Senior debt is a secured loan provided by a lender—typically a bank or institutional lender—where repayment is prioritised over all other debt types. It is "senior" in the capital structure, meaning the lender holds the first legal charge on the property and is paid first in the event of default or liquidation.
In London property, senior debt financing is commonly used to:
Acquire development sites or residential blocks
Fund new build or conversion projects
Bridge equity gaps for investors or consortiums
Refinance existing portfolios under improved terms
This form of financing is favoured for its lower cost compared to mezzanine or equity funding and its strong alignment with secure, income-producing property assets.
Senior debt structures are typically bespoke, shaped by the project type, borrower profile, and security available. Core elements include:
Lenders typically offer up to 60–75% LTV, depending on risk appetite and asset class (residential, mixed-use, commercial).
Senior debt is secured by a first charge on the property and any income or sales proceeds, ensuring lender protection.
Rates vary based on project risk and lender type, often ranging from 5%–9% per annum. Terms may extend from 12 months (for bridging) to 5 years (for stabilised assets).
Clear exits are crucial—such as refinance, asset disposal, or letting—ensuring that the debt can be repaid on time without disruption to the borrower’s broader portfolio.
In a high-value, high-demand market like London, senior debt offers critical liquidity without diluting ownership or equity. With rising land and construction costs, leveraging senior finance enables:
Accelerated project launches
Reduced investor capital exposure
Greater deal volume and portfolio growth
At Fraser Bond, we work with private investors, family offices, and development companies to structure senior loans that align with project timelines, planning stages, and market cycles.
Fraser Bond supports clients through every stage of the senior debt process. Our expertise includes:
Loan sourcing through our lender network (banks, specialist funds, private lenders)
Financial modelling to assess affordability, returns, and stress scenarios
Capital structuring, combining senior loans with mezzanine or equity when required
Lender negotiations to secure optimal terms and risk covenants
Compliance and reporting to meet lender and regulatory expectations
With our deep understanding of the London property landscape, we ensure that all senior debt arrangements are compliant, sustainable, and tailored to maximise return on investment.
For investors and developers navigating the complexities of London real estate, senior debt financing is a powerful enabler of growth, acquisition, and value creation. Fraser Bond delivers expert financial advisory, deal structuring, and access to top-tier lenders—all within a framework of full regulatory compliance and local market knowledge.
Visit FraserBond.com to speak with our investment advisory team or request a confidential funding consultation.
