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Land Bridging Loan

What is a Land Bridging Loan?

If you are looking to purchase or refinance land, we have a range of options, regardless of whether planning consent for development has been granted, or not.

A Land Bridging Loan is a short-term loan secured against a piece of land, which typically will not have any buildings/ structures standing on it. The land could have previously been used for agriculture, storage, garages, equestrian use or it could even be “scrub” land with development potential. Regardless of what the past or current use is/ was, everything has value.

Such loans are typically used by property investors, speculators and property developers to purchase land and either apply for a change of use, or amend the existing planning to enhance it or make it more favourable to then sell the land on, or build it out.

Very often we see developer clients using bridging finance to purchase a plot of land to then apply for planning permission to build a housing scheme or even commercial units. It’s not unusual that such purchases have to complete quickly, so they are perfectly suited to bridging finance.

What is Bridging Finance for Land used for?

A land bridging loan is used to purchase land, or to refinance an existing loan. Some lenders are also happy to release equity if there is sufficient headroom. Land purchases are often from auction, given the very specialist nature of such transactions.

We recently helped a client purchase 8 acres of agricultural land from a farmer. The loan was used to buy the land in quickly, as the deal was agreed on the basis of a fast completion given the farmer needed the money quickly. The loan was to ultimately to be repaid by the sale of other assets, and our client intended to apply for planning permission for residential development.

What are the Key Features of Bridging Loans for Land?

Typically up to 70% Loan to Value.

Rates from 0.75% per month.

Terms up to 36 months.

Minimum loan size £50k, with no maximum loan size.

Loans available throughout the UK, including England, Wales, Scotland and Northern Ireland.

What are the Land Bridging Finance lending criteria?

A First Charge is required.

Second charge loans only in certain circumstances.

Planning consent for development does not have to be in place, but without planning. consent the Loan to Value available might be restricted.

Lending against Open Market Value.

Loans with No PGs available.

Valuation will be required.

A viable Exit Strategy must be identified.

What Information do you need to progress a Land Loan?

Full address of land and title number(s).

Description of the land, including an explanation of current use.

Any existing/ historical Valuation Report, or Sales Particulars.

Borrowers details, including Company Name and Number, if applicable

CV’s/ Biography including any relevant experience.

Details of any existing planning permission

Proposed exit strategy


Does the land need to have Planning Permission?

Bridging Finance can be used to buy land with or without planning permission.

What Loan to Value can I achieve?

Bridging Loans against land without any planning permission (or with outline planning) would usually be at a maximum of 50% loan to value. When detailed planning permission is achieved, this allows a higher Loan to Value, and up to 70%.

How long can I have the loan for?

Land Finance can be for as little as 1 month, or up to 36 months. This is on a case by case basis.

What if it’s an ex-garage or Petrol Station?

Lenders will require ground investigation reports to confirm whether or not there is any potential contamination. If there is potential contamination, a remedial plan needs to be established.

What is “Hope Value”?

Hope Value refers to what the land “might” be worth, “if” planning consent was granted. Bear in mind that the vast majority of lenders DO NOT take Hope Value into consideration. Lenders will lend against the current value of the land, as it stands, at the time of application.

If you own some land that you would like to raise funds against, or are considering buying some land then please contact us now!

If you want a fast, flexible and reliable service, try
Positive Commercial Finance.


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