Sheffield Development Finance FAQ

Development finance is a short-term specialist loan that funds the construction, conversion or heavy refurbishment of residential, commercial or mixed-use property. Typically structured as a first-charge facility covering site acquisition and build costs, with interest retained within the facility and drawdowns staged against construction progress. Terms 12–24 months. See our development finance services for the full product breakdown.

Experienced UK property developers delivering residential, commercial or mixed-use schemes. First-time developers with a strong professional team and reasonable equity contribution can also qualify — but terms are better with a track record.

Development finance funds construction and is drawn in tranches against build progress. A commercial mortgage funds the purchase of a completed income-producing property and pays out in full at completion. Exit finance (see below) is the bridge between the two.

Senior development finance in Sheffield typically covers up to 70% of total development cost (LTC) and up to 65% of gross development value (LTGDV), whichever is lower. Stretch senior pushes to 85% LTC, and a senior-plus-mezzanine stack can reach 90% LTC. Use our development loan calculator for an instant estimate.

Not from debt alone. A JV equity partner can fund the equity element of your scheme — effectively creating a 100% funded position — in exchange for a share of the development profit. Typical profit splits range from 50/50 to 70/30 in favour of the developer.

Typically 30% of total project cost as equity for a senior facility (70% LTC). Stretch senior reduces this to 15–20%. With mezzanine, equity can come down to 10–15%. Equity must be genuinely available and not otherwise encumbered.

LTC (loan-to-cost) is the facility as a percentage of total development cost (land + build + fees). LTGDV (loan-to-gross-development-value) is the facility as a percentage of the completed scheme’s gross sale value. Senior development lenders typically cap at 70% LTC and 65% LTGDV — the lower of the two is binding.

Senior 7.5–10% pa. Stretch senior 9–12% pa. Mezzanine 12–18% pa. Exit finance 6–9% pa. Actual pricing depends on leverage, borrower experience, scheme location, and overall risk profile.

Interest is almost always retained within the facility — meaning the developer doesn’t service the debt from cash flow during construction. Accrued interest is repaid alongside the capital upon sale of units or refinancing. Interest is calculated on drawn balance, not the full facility.

Arrangement fee (1–2% of the facility, added to the loan), exit fee (0.5–1% sometimes), monitoring surveyor fees (c.£1–2K per drawdown), legal fees (both sides), valuation fee, and broker fee (typically included in the arrangement fee — confirmed on term sheet).

Indicative terms within 48 hours. Full completion typically 3–6 weeks. We’ve completed facilities in 10 working days on exceptional transactions with experienced borrowers and clean planning. See our 7-step process.

Scheme appraisal or feasibility, planning permission (or application ref), cost plan (ideally QS-signed), developer CV, 12 months’ bank statements, proof of equity, professional-team contact sheet. PBSA and hotel schemes also need operator agreements.

Most lenders require at least outline planning permission. Some specialist lenders will consider pre-planning facilities for experienced developers on well-sited schemes, but pricing is higher and facility size lower.

Senior development finance is a first-charge facility funding site acquisition and construction costs. Up to 70% LTC, typically 7.5–10% pa, 12–24 month terms. The cornerstone of most development capital stacks.

Stretch senior is a single first-charge facility that pushes leverage to 80–85% LTC — simpler and cheaper than layering senior + mezzanine, where the profile suits.

Mezzanine finance is a second-charge loan sitting behind the senior facility, lifting total leverage to 85–90% LTC. Typically 12–18% pa. Used for larger schemes where equity efficiency matters.

JV equity is an equity partnership where a capital partner contributes equity in exchange for a share of the development profit. Profit splits typically 50/50 to 70/30 in favour of the developer.

Development exit finance is a refinancing product that replaces the senior facility at or near practical completion. Reduces interest cost, extends the sales period, and releases equity for the next scheme.

PD finance is specialist funding for commercial-to-residential conversions under Class MA or Class O permitted development rights — without the need for full planning permission. Prior approval from the LPA is still required.

Yes — the full Sheffield metropolitan district plus Rotherham, Doncaster, Barnsley and the wider South Yorkshire footprint. See our Sheffield development zones guide.

Parts of Sheffield City Centre have Article 4 directions removing office-to-residential PD rights (to protect the office stock). Broomhall and Crookes have separate Article 4 restricting HMO conversion (Class C3 to C4). Check with the LPA before assuming PD rights apply.

A mix of UK high-street banks, regional challengers, and Sheffield-HQ’d specialists including Castle Trust Capital, Together Money, Shawbrook Bank, plus Hampshire Trust Bank’s dedicated Sheffield office. Our panel of 100+ includes national and regional lenders across the full spectrum.